FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION

                              WASHINGTON, DC 20549

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE
ACT OF 1934

For the quarterly period ended   September 30, 2004
                                 ------------------

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934

For the transition period from ___________to____________

                          Commission file number 1-3247
                                                 ------


                              CORNING INCORPORATED
                              --------------------
                                  (Registrant)


                New York                                 16-0393470
- ----------------------------------------    ------------------------------------
        (State of incorporation)            (I.R.S. Employer Identification No.)


One Riverfront Plaza, Corning, New York                     14831
- ----------------------------------------    ------------------------------------
(Address of principal executive offices)                 (Zip Code)


Registrant's telephone number, including area code: 607-974-9000
                                                    ------------

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months and (2) has been subject to the filing  requirements for
the past 90 days.

                       Yes   X                No ____

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).

                       Yes   X                No ____


Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date:

1,402,238,744   shares  of  Corning's  Common  Stock,   $0.50  Par  Value,  were
outstanding as of October 15, 2004.







                                      INDEX
                                      -----

PART I - FINANCIAL INFORMATION
- ------------------------------

ITEM 1. Financial Statements

                                                                          Page
                                                                          ----

    Consolidated Statements of Operations (Unaudited) for
       the three and nine months ended September 30, 2004 and 2003          3

    Consolidated Balance Sheets at September 30, 2004 (Unaudited)
       and December 31, 2003                                                4

    Consolidated Statements of Cash Flows (Unaudited) for the nine
       months ended September 30, 2004 and 2003                             5

    Notes to Consolidated Financial Statements (Unaudited)                  6

Item 2. Management's Discussion and Analysis of Financial Condition
           and Results of Operations                                       24

Item 3. Quantitative and Qualitative Disclosures About Market Risk         47

Item 4. Controls and Procedures                                            47


PART II - OTHER INFORMATION
- ---------------------------

Item 1. Legal Proceedings                                                  48

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds        53

Item 6. Exhibits                                                           54

Signatures                                                                 55

Exhibit Index                                                              56

Certifications                                                             66








                  CORNING INCORPORATED AND SUBSIDIARY COMPANIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
               (Unaudited; in millions, except per share amounts)





                                                                  For the three months            For the nine months
                                                                   ended September 30,            ended September 30,
                                                                -------------------------      --------------------------
                                                                   2004           2003           2004            2003
                                                                ----------      ---------      ---------      -----------
                                                                                                  
Net sales                                                       $   1,006       $    772       $   2,821      $   2,270
Cost of sales                                                         602            546           1,771          1,663
                                                                ---------       --------       ---------      ---------

Gross margin                                                          404            226           1,050            607

Operating expenses:
   Selling, general and administrative expenses                       153            147             479            447
   Research, development and engineering expenses                      88             80             257            258
   Amortization of purchased intangibles                                9             10              28             28
   Restructuring, impairment and other charges and
     (credits) (Notes 4 and 8)                                      1,794            (10)          1,794             90
   Asbestos settlement (Note 5)                                       (50)            51              16            388
                                                                ---------       --------       ---------      ---------

Operating (loss) income                                            (1,590)           (52)         (1,524)          (604)

Interest income                                                         6              7              16             24
Interest expense                                                      (36)           (36)           (109)          (118)
(Loss) gain on repurchases and retirement
  of debt, net (Note 11)                                               (4)             2             (36)            19
Other income, net                                                       5              5               6             11
                                                                ---------       --------       ---------      ---------

(Loss) before income taxes                                         (1,619)           (74)         (1,647)          (668)
(Provision) benefit for income taxes (Note 9)                        (985)            30            (997)           208
                                                                ---------       --------       ---------      ---------

(Loss) before minority interests and
  equity earnings                                                  (2,604)           (44)         (2,644)          (460)
Minority interests                                                     (3)             2             (14)            72
Equity in earnings of associated companies, net of
  impairments (Note 7)                                                 96             75             310            194
                                                                ---------       --------       ---------      ---------

(Loss) income from continuing operations                           (2,511)            33          (2,348)          (194)
Income from discontinued operation (Note 3)                            20                             20
                                                                ---------       --------       ---------      ---------
Net (loss) income                                               $  (2,491)      $     33       $  (2,328)     $    (194)
                                                                =========       ========       =========      =========

Basic (loss) earnings per common share from:
   Continuing operations                                        $   (1.79)      $   0.03       $   (1.70)     $   (0.15)
   Discontinued operation                                            0.01                           0.01
                                                                ---------       --------       ---------      ---------
Basic (loss) earnings per common share                          $   (1.78)      $   0.03       $   (1.69)     $   (0.15)
                                                                =========       ========       =========      =========

Diluted (loss) earnings per common share from:
   Continuing operations                                        $   (1.79)      $   0.02       $   (1.70)     $   (0.15)
   Discontinued operation                                            0.01                           0.01
                                                                ---------       --------       ---------      ---------
Diluted (loss) earnings per common share                        $   (1.78)      $   0.02       $   (1.69)     $   (0.15)
                                                                =========       ========       =========      =========


The accompanying notes are an integral part of these statements.






                  CORNING INCORPORATED AND SUBSIDIARY COMPANIES
                           CONSOLIDATED BALANCE SHEETS
               (Unaudited; in millions, except per share amounts)




                                                                                         September 30,       December 31,
                                                                                             2004                2003
                                                                                         -------------       ------------
                                                                                                        
Assets

Current assets:
   Cash and cash equivalents                                                              $   1,147           $     833
   Short-term investments, at fair value                                                        592                 433
                                                                                          ---------           ---------
     Total cash, cash equivalents and short-term investments                                  1,739               1,266
   Trade accounts receivable, net of doubtful accounts and allowances - $36 and $38             538                 525
   Inventories (Note 6)                                                                         498                 467
   Deferred income taxes (Note 9)                                                                81                 242
   Other current assets                                                                         214                 194
                                                                                          ---------           ---------
       Total current assets                                                                   3,070               2,694

Investments (Note 7)                                                                          1,233               1,045
Property, net of accumulated depreciation - $3,408 and $3,415 (Note 4)                        3,505               3,620
Goodwill (Note 8)                                                                               276               1,735
Other intangible assets, net (Note 8)                                                           132                 166
Deferred income taxes (Note 9)                                                                  450               1,225
Other assets                                                                                    203                 267
                                                                                          ---------           ---------

Total Assets                                                                              $   8,869           $  10,752
                                                                                          =========           =========
Liabilities and Shareholders' Equity

Current liabilities:
   Loans payable                                                                          $     214           $     146
   Accounts payable                                                                             489                 333
   Other accrued liabilities (Notes 5 and 10)                                                 1,027               1,074
                                                                                          ---------           ---------
       Total current liabilities                                                              1,730               1,553

Long-term debt (Note 11)                                                                      2,438               2,668
Postretirement benefits other than pensions (Notes 1 and 2)                                     605                 619
Other liabilities (Note 5)                                                                      498                 412
Commitments and contingencies (Note 12)
Minority interests                                                                               30                  36
Shareholders' equity:
   Preferred stock - Par value $100.00 per share; Shares authorized: 10 million
     Series C mandatory convertible preferred stock - Shares issued: 5.75 million;
     Shares outstanding: 637 thousand and 854 thousand                                           64                  85
   Common stock - Par value $0.50 per share; Shares authorized: 3.8 billion;
     Shares issued: 1,418 million and 1,401 million                                             709                 701
   Additional paid-in capital                                                                10,342              10,298
   Accumulated deficit                                                                       (7,472)             (5,144)
   Treasury stock, at cost; Shares held: 17 million and 58 million                             (166)               (574)
   Accumulated other comprehensive income                                                        91                  98
                                                                                          ---------           ---------
       Total shareholders' equity                                                             3,568               5,464
                                                                                          ---------           ---------

Total Liabilities and Shareholders' Equity                                                $   8,869           $  10,752
                                                                                          =========           =========


The accompanying notes are an integral part of these statements.






                  CORNING INCORPORATED AND SUBSIDIARY COMPANIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                            (Unaudited; in millions)




                                                                                         For the nine months ended
                                                                                               September 30,
                                                                                         -------------------------
                                                                                             2004         2003
                                                                                          ---------     --------
                                                                                                  
Cash flows from operating activities:
   (Loss) income from continuing operations                                               $ (2,348)     $  (194)
   Adjustments to reconcile net (loss) income from continuing
    operations to net cash provided by operating activities:
     Amortization of purchased intangibles                                                      28           28
     Depreciation                                                                              359          363
     Restructuring, impairment and other charges and (credits)                               1,794           90
     Asbestos settlement                                                                        16          388
     Loss (gain) on repurchases and retirement of debt, net                                     36          (19)
     Undistributed earnings of associated companies                                           (199)         (84)
     Minority interests, net of dividends paid                                                  14          (76)
     Deferred taxes                                                                            939         (259)
     Interest expense on convertible debentures                                                  4           15
     Restructuring payments                                                                    (75)        (201)
     Income tax refund                                                                                      191
     Customer deposits                                                                         100
     Changes in certain working capital items:
        Trade accounts receivable                                                              (29)           5
        Inventories                                                                            (52)          73
        Other current assets                                                                   (25)          34
        Accounts payable and other current liabilities, net of restructuring payments           29         (228)
     Other, net                                                                                 52          (60)
                                                                                          --------      -------
Net cash provided by operating activities                                                      643           66
                                                                                          --------      -------

Cash flows from investing activities:
   Capital expenditures                                                                       (556)        (204)
   Net proceeds from sale of businesses                                                        100            9
   Net proceeds from sale or disposal of assets                                                 46           39
   Net increase in long-term investments and other long-term assets                                          (4)
   Short-term investments - acquisitions                                                      (969)      (1,426)
   Short-term investments - liquidations                                                       810        1,481
   Restricted investments - liquidations                                                         6           16
                                                                                          --------      -------
Net cash used in investing activities                                                         (563)         (89)
                                                                                          --------      -------

Cash flows from financing activities:
   Net repayments of loans payable                                                            (111)        (160)
   Proceeds from issuance of long-term debt, net                                               442
   Repayments of long-term debt                                                               (154)      (1,100)
   Proceeds from issuance of common stock, net                                                  33          651
   Cash dividends to preferred shareholders                                                     (6)         (15)
   Proceeds from the exercise of stock options                                                  34
                                                                                          --------      -------
Net cash provided by (used in) financing activities                                            238         (624)
                                                                                          --------      -------
Effect of exchange rates on cash                                                                (4)          30
                                                                                          --------      -------
Net increase (decrease) in cash and cash equivalents                                           314         (617)
Cash and cash equivalents at beginning of period                                               833        1,426
                                                                                          --------      -------

Cash and cash equivalents at end of period                                                $  1,147      $   809
                                                                                          ========      =======


The accompanying notes are an integral part of these statements.






                  CORNING INCORPORATED AND SUBSIDIARY COMPANIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)


1.   Basis of Presentation

General

Corning Incorporated and its consolidated  subsidiaries is hereinafter sometimes
referred to as "the Company," "Registrant," "Corning," "we," "our" or "us."

Corning 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, life sciences and semiconductor industries.

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.  The
consolidated  financial  statements have been prepared pursuant to the rules and
regulations  of the Securities  and Exchange  Commission and in accordance  with
accounting  principles generally accepted in the United States of America (GAAP)
for interim financial information.

The  preparation  of  financial  statements  in  conformity  with GAAP  requires
management  to make  estimates  and  assumptions  that affect  amounts  reported
therein.  Significant estimates and assumptions in these consolidated  financial
statements include  restructuring and other charges and credits,  allowances for
doubtful accounts  receivable,  estimates of fair value associated with goodwill
and long-lived  asset  impairment  tests,  estimates of the fair value of assets
held for disposal,  environmental and legal liabilities,  income taxes including
deferred tax valuation  allowances,  and the determination of discount and other
rate assumptions for pension and postretirement  employee benefit expenses.  Due
to the  inherent  uncertainty  involved  in  making  estimates,  actual  results
reported in future periods may be different from these estimates.

The results for interim periods are not  necessarily  indicative of results that
may be expected for any other interim period or for the full year. These interim
consolidated  financial  statements should be read in conjunction with Corning's
Annual Report on Form 10-K for the year ended December 31, 2003.

Certain amounts for 2003 were reclassified to conform to 2004 classifications.

Stock-Based Compensation

We apply Accounting Principles Board Opinion (APB) No. 25, "Accounting for Stock
Issued to Employees" (APB No. 25), for our stock-based  compensation  plans. The
following table  illustrates the effect on (loss) income and (loss) earnings per
share if we had  applied  the fair value  recognition  provisions  of  Financial
Accounting  Standards Board (FASB) Statement of Financial  Accounting  Standards
(SFAS) No.  123,  "Accounting  for  Stock-Based  Compensation"  (SFAS  123),  to
stock-based employee compensation.








(In millions, except per share amounts)
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                             Three months                       Nine months
                                                                          ended September 30,               ended September 30,
                                                                       -------------------------        -------------------------
                                                                          2004            2003             2004            2003
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                                             
Loss from continuing operations - as reported                          $  (2,511)     $      33         $ (2,348)        $  (194)
Add:  Stock-based employee compensation expense
  determined under APB No. 25, included in reported
  net (loss) income, net of tax                                                                                3               1
Less:  Stock-based employee compensation expense
  determined under fair value based method, net of tax                       (20)           (38)             (77)           (106)
- ------------------------------------------------------------------------------------------------------------------------------------
Loss from continuing operations - pro forma                            $  (2,531)     $      (5)        $ (2,422)        $  (299)

(Loss) earnings per common share:
    Basic - as reported                                                $   (1.79)     $    0.03         $  (1.70)        $ (0.15)
    Basic - pro forma                                                  $   (1.81)          0.00         $  (1.76)        $ (0.24)

    Diluted - as reported                                              $   (1.79)     $    0.02         $  (1.70)        $ (0.15)
    Diluted - pro forma                                                $   (1.81)          0.00         $  (1.76)        $ (0.24)
- ------------------------------------------------------------------------------------------------------------------------------------




For purposes of SFAS 123 fair value disclosures,  each option grant's fair value is estimated on the grant date using the
Black-Scholes option pricing model. The following  are  weighted-average  assumptions  used for  grants  under our stock plans:

- ------------------------------------------------------------------------------------------------------------------------------------
                                                                             Three months                       Nine months
                                                                          ended September 30,               ended September 30,
                                                                         ---------------------            ----------------------
                                                                          2004            2003             2004            2003
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                                              
Expected life in years                                                       4               5                4               5
Risk free interest rate                                                  3.62%           3.59%            3.34%           3.02%
Expected volatility                                                        50%           80.4%              50%           78.7%
- ------------------------------------------------------------------------------------------------------------------------------------


During the first quarter of 2004, Corning updated its analysis of the historical
stock option exercise  behavior of its employees,  among other relevant factors,
and  determined  that the best  estimate  of the stock  options'  expected  term
granted in the first quarter was 4 years, compared to our previous expected term
estimate  of 5  years.  Additionally,  Corning  used a  10-year  mean  reversion
analysis,  as allowed by SFAS 123, to determine the volatility  assumption  also
used to estimate the fair value of options  granted in the first quarter.  Prior
to 2004, Corning used historical  trailing  volatility for a period equal to the
expected term of our stock options.  Corning believes a mean reversion  analysis
provides a better estimate of future volatility expectations.

Changes in the status of outstanding options follow:

- --------------------------------------------------------------------------------
                                         Number of Shares     Weighted-Average
                                          (in thousands)       Exercise Price
- --------------------------------------------------------------------------------
Options outstanding December 31, 2003         135,352             $ 20.58
Options granted under plans                     9,461             $ 11.66
Options exercised                              (5,900)            $  5.93
Options terminated                             (1,115)            $ 28.24
                                              -------
Options outstanding September 30, 2004        137,798             $ 20.43
                                              =======
Options exercisable September 30, 2004        100,468             $ 24.04
- --------------------------------------------------------------------------------







New Accounting Standard

In May 2004, the FASB issued Staff Position (FSP) No. FAS 106-2, "Accounting and
Disclosure  Requirements Related to the Medicare Prescription Drug,  Improvement
and Modernization  Act of 2003" (FSP No. 106-2),  which provides guidance on how
companies  should  account  for the impact of the  Medicare  Prescription  Drug,
Improvement  and  Modernization  Act of 2003 (the  "Act") on its  postretirement
health care plans.  To encourage  employers to retain or provide  postretirement
drug benefits, beginning in 2006 the federal government will provide non-taxable
subsidy  payments  to  employers  that  sponsor  prescription  drug  benefits to
retirees that are "actuarially  equivalent" to the Medicare benefit. Corning has
determined that its postretirement health care plans' prescription drug benefits
are actuarially  equivalent to Medicare Part D benefits to be provided under the
Act.  Effective  July 1, 2004,  Corning  prospectively  adopted  the  accounting
guidance of FSP No. 106-2, which reduced our postretirement health care and life
insurance plans'  accumulated  postretirement  benefit obligation by $73 million
and will reduce the related annual expense by $10 million.  For the three months
ended  September  30, 2004,  our  postretirement  benefit  expense  decreased $3
million reflecting the adoption of this accounting guidance.

2.   Employee Retirement Plans



The following table summarizes the components of net periodic benefit cost for Corning's defined benefit pension and postretirement
health care and life insurance plans (in millions):
- ------------------------------------------------------------------------------------------------------------------------------------
                                                     Pension benefits                              Postretirement benefits
- ------------------------------------------------------------------------------------------------------------------------------------
                                             Three months           Nine months              Three months           Nine months
                                            ended Sept. 30,       ended Sept. 30,           ended Sept. 30,       ended Sept. 30,
                                         --------------------   -------------------      --------------------    ------------------
                                          2004          2003    2004          2003         2004         2003     2004         2003
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                                     
Service cost                             $   10       $    8    $   30      $   27       $    2      $    2    $     7       $   7
Interest cost                                33           28        99         101           11          12         36          36
Expected return on plan assets              (37)         (33)     (111)       (120)
Amortization of net loss                      5            3        16           5            1           1          5           3
Amortization of prior service cost            2            2         6           8           (1)         (1)        (5)         (4)
                                         ------------------------------------------------------------------------------------------
Net periodic benefit expense                 13            8        40          21           13          14         43          42

Curtailment loss (gain)                                                          8                                              (5)
Special termination benefits                                                    14                                              10
                                         ------------------------------------------------------------------------------------------
Total expense                            $   13       $    8    $   40      $   43       $   13      $   14    $    43       $  47
- ------------------------------------------------------------------------------------------------------------------------------------


For the nine months ended  September 30, 2004, we contributed $44 million to our
domestic and international pension plans.

3.   Discontinued Operation

On December 13, 2002, we completed the sale of our precision lens business to 3M
Company  ("3M") for cash proceeds up to $850  million,  of which $50 million was
deposited  in an escrow  account.  3M notified  Corning  that 3M believed it had
certain claims arising out of the representations and warranties made by Corning
in connection  with the sale of the precision  lens business to 3M. In the third
quarter of 2004,  Corning and 3M reached a final  settlement  agreement  for the
funds held in escrow.  Accordingly,  we  recognized  a gain of $20 million  upon
receipt  of $20  million  of  proceeds.  This gain is  included  in income  from
discontinued operation in the consolidated statements of operations.







4. Restructuring, Impairment and Other Charges and (Credits)

2004 Restructuring Actions

Third Quarter
- -------------
In the third quarter of 2004, we recorded  restructuring,  impairment  and other
charges and  (credits) of $1,794  million.  A summary of the charges and credits
follows:

..    We recorded a charge of $1,420  million to impair a significant  portion of
     our  Telecommunications  segment  goodwill  balance.  Refer  to  Note 8 for
     additional information on this charge.
..    We recorded a $350  million  charge to impair  certain  fixed assets of our
     Telecommunications segment in accordance with SFAS No. 144, "Accounting for
     the  Impairment or Disposal of Long-Lived  Assets" (SFAS 144).  This charge
     primarily  relates to our third  quarter  decision to  permanently  abandon
     approximately $332 million of construction in progress at our optical fiber
     manufacturing  facility in Concord, North Carolina that had been stopped in
     2002. As a result of our lowered  outlook,  we have  permanently  abandoned
     this  construction  in  progress  as we no longer  believe  the  demand for
     optical  fiber will  warrant the  investment  necessary  to  complete  this
     facility.
..    We  recorded  an asset  held for use  impairment  charge of $24  million to
     impair  certain fixed assets and  intangible  assets other than goodwill in
     accordance  with SFAS  144.  Due to our  decision  to  permanently  abandon
     certain   fixed   assets   and  lower  our   long-term   outlook   for  the
     Telecommunications  segment, we determined that an event of impairment,  as
     defined by SFAS 144, had occurred in our  Telecommunications  segment which
     required us to test the segment's long-lived assets other than goodwill for
     impairment.  We assess  recoverability  of the carrying value of long-lived
     assets at the lowest level for which  indentifiable  cash flows are largely
     independent of the cash flows of other assets and liabilities. We estimated
     the fair value of the  long-lived  assets  using the  discounted  cash flow
     approach  as a  measure  of  fair  value.  As a  result  of our  impairment
     evaluation,  we recorded an impairment charge to write-down  certain assets
     to their estimated fair values.
..    We  recorded a gain of $8 million  related to proceeds in excess of assumed
     salvage  values for assets of Corning  Asahi Video  Products  Company (CAV)
     that were  previously  impaired  but later sold to a Henan Anyang CPT Glass
     Bulb Group,  Electronic  Glass Co., Ltd. (Henan Anyang),  located in China.
     CAV was our 51% owned affiliate that manufactured  glass panels and funnels
     for use in  conventional  televisions  that  was shut  down in  2003.  This
     represents the substantial completion of the sale of CAV's assets.
..    We  recorded a loss of $14  million on the sale of our  frequency  controls
     business  for net cash  proceeds of $80  million.  The  frequency  controls
     business,  which was part of our  Telecommunications  segment,  had  annual
     sales of $76 million.
..    We recorded  net credits of $6 million  comprised of  adjustments  to prior
     years' restructuring and impairment charges.

Second Quarter
- --------------
In the second  quarter of 2004, we recorded  credits of $34 million  included in
restructuring,  impairment and other charges and  (credits).  A summary of these
credits follows:

..    We  recorded a $25  million  gain  related to proceeds in excess of assumed
     salvage  values for assets of CAV that were  previously  impaired but later
     sold to Henan Anyang.
..    We recorded a $9 million credit  comprised of reversals of reserves related
     to prior years' restructuring charges.

First Quarter
- -------------
In the first quarter of 2004, we recorded net charges of $34 million included in
restructuring,  impairment and other charges and  (credits).  A summary of these
charges and credits follow:

..    We recorded $39 million of accelerated  depreciation and $1 million of exit
     costs  relating  to  the  final  shutdown  of our  semiconductor  materials
     manufacturing facility in Charleston, South Carolina, which we announced in
     the fourth quarter of 2003.
..    We recorded credits of $6 million,  primarily related to proceeds in excess
     of assumed salvage values for assets that were previously impaired.





The following table details the charges, credits and balances of the restructuring liabilities as of and for the nine months ended
September 30, 2004 (in millions):
- ------------------------------------------------------------------------------------------------------------------------------------
                                                             Nine months                                                 Remaining
                                                             ended Sept.       Revisions        Net          Cash       reserve at
                                                January 1,    30, 2004        to existing    charges/      payments      Sept. 30,
                                                   2004        charge            plans      (reversals)     in 2004        2004
- ------------------------------------------------------------------------------------------------------------------------------------

                                                                                                     
Restructuring charges:
  Employee related costs                         $      78                   $       4       $      4      $    (55)   $      27
  Other charges                                        108    $       2             (4)            (2)          (20)          86
                                                 --------------------------------------------------------------------------------
     Total restructuring charges                 $     186    $       2      $       0       $      2      $    (75)   $     113
                                                 --------------------------------------------------------------------------------

Impairment of long-lived assets:
  Goodwill                                                    $   1,420                      $  1,420
  Assets to be disposed of by sale
    or abandonment                                                  350      $     (55)           295
  Assets to be held and used                                  $      24                      $     24
                                                              ---------------------------------------

Other:
  Accelerated depreciation                                    $      39                      $     39
  Loss on sale of frequency controls business                 $      14                      $     14
                                                              ---------------------------------------

Total restructuring, impairment and other
  charges and (credits)                                       $   1,849      $     (55)      $  1,794
- ------------------------------------------------------------------------------------------------------------------------------------


Cash payments for employee related costs will be  substantially  complete by the
end of 2005, while payments for exit activities will be  substantially  complete
by the end of 2007. As of September 30, 2004,  all of the 1,975  employees  from
the 2003 restructuring plans have been separated.

2003 Restructuring Actions

Third Quarter
- -------------
In the third quarter of 2003, we recorded net credits of $10 million included in
restructuring, impairments and other charges (credits). A summary of the charges
and credits follows:

..    We recorded a loss of $13 million for the completion of the sale of certain
     photonic  technologies assets of our  Telecommunications  segment to Avanex
     Corporation (Avanex).
..    We  recorded  a charge of $3 million  related  to the exit of the  photonic
     technologies business for employee separation costs.
..    We  recorded  credits of $20  million  for the  reversal  of  restructuring
     reserves related to prior years'  restructuring  charges,  primarily in the
     Telecommunications segment.
..    We  recorded a gain of $5 million  related to proceeds in excess of assumed
     salvage  values for assets of CAV that were  previously  impaired but later
     sold to a Henan Anyang.
..    We recorded a gain of $1 million on the sale of  previously  impaired  cost
     investments  in the  Telecommunications  segment  that were later sold to a
     third party.



Second Quarter
- --------------
In the second  quarter of 2003, we recorded net charges of $49 million  included
in restructuring, impairment and other charges and (credits). A summary of these
charges and credits follows:

..    We recorded a charge of $54 million related to the shut down of CAV.
..    We  recorded a charge of $33  million  related to the exit of the  photonic
     technologies business.
..    We recorded a charge of $38 million related to restructuring and impairment
     actions in the Telecommunications segment and administrative staffs.
..    We recorded a credit of $76 million  related to prior years'  restructuring
     and impairment charges, primarily in the Telecommunications segment.

First Quarter
- -------------
In the first quarter of 2003 we recorded net charges of $51 million  included in
restructuring,  impairment and other charges and  (credits).  A summary of these
charges and credits follows:

..    We recorded a $17 million  charge  associated  with the  discontinuance  of
     optical switching, which was part of our Telecommunications segment.
..    We  recorded a $5  million  charge for other  than  temporary  declines  in
     certain cost investments in the Telecommunications segment.
..    We  recorded a $33  million  reversal of prior  years'  charges  related to
     revised cost estimates of existing restructuring plans.
..    We recorded a $62 million asset impairment charge related to CAV.



The following table details the charges, credits and balances of the restructuring reserves as of September 30, 2003 (in millions):
- ------------------------------------------------------------------------------------------------------------------------------------
                                                  Nine months                            Nine months ended               Remaining
                                                  ended Sept.     Reversals       Net     Sept. 30, 2003      Cash      reserve at
                                     January 1,    30, 2003      to existing   charges/      Non-cash       payments     Sept. 30,
                                        2003        charge          plans     (reversals)     charges        in 2003       2003
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                                   
Restructuring charges:
  Employee related costs               $  273       $    84       $   (59)      $   25        $ (27)        $  (170)    $   101
  Other charges                           132            33           (21)          12                          (31)        113
                                       -----------------------------------------------------------------------------------------
     Total restructuring charges       $  405       $   117       $   (80)      $   37        $ (27)        $  (201)    $   214
                                       -----------------------------------------------------------------------------------------

Impairment of long-lived assets:
  Assets to be held and used                        $    62                     $   62
  Assets to be disposed of by sale
    or abandonment                                       28       $   (54)         (26)
  Cost investments                                        5            (1)           4
                                                    -----------------------------------
     Total impairment charges                       $    95       $   (55)      $   40
                                                    -----------------------------------

Other charges:
Loss on Avanex transaction                          $    13                     $   13

Total restructuring, impairment and other
  charges and (credits)                             $   225       $  (135)      $   90
- ------------------------------------------------------------------------------------------------------------------------------------




5.   Asbestos Settlement

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   non-premises   asbestos  claims  against  us  and  Pittsburgh   Corning
Corporation (PCC), which might arise from PCC products or operations.

The agreement is expected to be incorporated into a settlement fund as part of a
reorganization  plan for PCC. The plan was  submitted to the federal  bankruptcy
court at the end of 2003, received a favorable vote from creditor classes in the
first quarter of 2004,  but remains  subject to a number of  contingencies.  The
Bankruptcy  Court has set a schedule for briefing  leading to final arguments in
November 2004. We will make our  contributions to the settlement trust under the
agreement after the plan is approved, becomes effective and is no longer subject
to appeal.

When the plan becomes effective, our settlement will require the contribution of
our equity interest in PCC, our one-half  equity interest in Pittsburgh  Corning
Europe N.V. (PCE),  and 25 million shares of our common stock.  The common stock
will be  marked-to-market  each quarter until the  settlement  plan is approved,
thus  resulting  in  adjustments  to  income  and the  settlement  liability  as
appropriate.  The agreement also includes the contribution of cash payments with
a current value of $142 million over six years beginning one year after the plan
becomes  effective.  In addition,  we will assign insurance policy proceeds from
our  primary  insurance  and a portion  of our excess  insurance  as part of the
settlement.



The following summarizes the charges we have recorded to reflect the initial settlement and mark-to-market the value of our common
stock (in millions):
- ------------------------------------------------------------------------------------------------------------------------------------
                                                           Three months                           Nine months
                                                        ended September 30,                   ended September 30,
                                                       ---------------------                 ---------------------
                                                        2004           2003                   2004            2003
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                                
Asbestos settlement charge (credit)                    $  (50)         $  51                 $  16          $  388
- ------------------------------------------------------------------------------------------------------------------------------------


Since March 28,  2003,  we have  recorded  total net charges of $429  million to
reflect the initial settlement and mark-to-market the value of our common stock.

The carrying  value of our stock in PCE and the fair value of 25 million  shares
of our common stock as of September 30, 2004 ($298  million) have been reflected
in other accrued liabilities.  The remaining $142 million,  representing the net
present  value of the cash  payments  discounted  at 5.5%,  is recorded in other
liabilities.  See Part II-Other  Information,  Item 1. Legal  Proceedings  for a
history of this matter.

6.   Inventories

(in millions)
- --------------------------------------------------------------------------------
                                 September 30, 2004          December 31, 2003
- --------------------------------------------------------------------------------
Finished goods                         $    138                  $    141
Work in process                             136                       113
Raw materials and accessories               138                       138
Supplies and packing materials               86                        75
- --------------------------------------------------------------------------------
Total inventories                      $    498                  $    467
- --------------------------------------------------------------------------------

7.   Investments

At September 30, 2004 and December 31, 2003, our total investments accounted for
by the  equity  method  were  $1,184  million  and $978  million,  respectively.
Summarized   results  of  operations  of  our  two  significant   equity  method
investments follow:



Samsung Corning Precision Glass Co., Ltd. (Samsung Corning Precision)



(in millions)
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                Three months                          Nine months
                                                             ended September 30,                  ended September 30,
                                                          ------------------------             -------------------------
                                                            2004           2003                  2004             2003
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                                  
Statement of Operations
     Net sales                                            $    275       $     158             $     774      $     399
     Gross profit                                         $    211       $     114             $     595      $     284
     Net income                                           $    137       $      78             $     408      $     192

Related Party Transactions:
     Sales to Samsung Corning Precision                                  $      50             $       6      $      62
     Purchases from Samsung Corning Precision             $     19       $      17             $      56      $      25
- ------------------------------------------------------------------------------------------------------------------------------------


Our  investment  in Samsung  Corning  Precision,  a 50%-owned  South Korea based
manufacturer of liquid crystal display glass,  was $465 million and $299 million
at September 30, 2004 and December 31, 2003, respectively.

Balances due to and from Samsung Corning  Precision were immaterial at September
30, 2004 and December 31, 2003.  Profits  related to  inventories on hand at the
end of a period are eliminated during consolidation.

Dow Corning Corporation (Dow Corning)



(in millions)
- ------------------------------------------------------------------------------------------------------------------------------------
                                                           Three months                          Nine months
                                                        ended September 30,                   ended September 30,
                                                     -------------------------            ---------------------------
                                                        2004             2003                2004           2003
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                              
Statement of Operations:
     Net sales                                       $     830       $    724             $   2,496       $   2,095
     Gross profit                                    $     262       $    199             $     770       $     605
     Net income                                      $      80       $     47             $     168       $     137
- ------------------------------------------------------------------------------------------------------------------------------------


Our investment in Dow Corning,  a 50%-owned U.S. based  manufacturer of silicone
products,  was $252 million and $185 million at September  30, 2004 and December
31, 2003, respectively.

For the nine months ended  September  30,  2004,  Dow Corning  recorded  charges
related  to  restructuring  actions  and  adjustments  to  interest  liabilities
recorded on its emergence  from  bankruptcy.  Our equity  earnings  included $21
million  related to these  charges.  Subject to future rulings by the bankruptcy
court and potential changes in estimated  bankruptcy-related  liabilities, it is
possible that Dow Corning may record  bankruptcy-related  charges in the future.
For information  related to Dow Corning  litigation and bankruptcy  proceedings,
see Part II-Other Information, Item 1. Legal Proceedings.

Other

In the third quarter of 2004, we recorded  impairment  charges of $35 million to
write-down  certain  Telecommunications  segment  equity method  investments  to
estimated  fair  value.  As a result of our revised  Telecommunications  segment
outlook,  we determined that these  investments  were no longer strategic assets
and  therefore  no longer  intend to hold  these  investments.  Accordingly,  we
recorded a charge to fully  impair the book values of our  investments  in these
entities.  These  impairment  charges  are  included  in equity in  earnings  of
associated  companies,  net of  impairments  on the  consolidated  statements of
operations.



8.   Goodwill and Other Intangibles Assets



The changes in the carrying amount of goodwill for the nine months ended September 30, 2004 follow (in millions):
- ------------------------------------------------------------------------------------------------------------------------------------
                                                 Telecom-               Display           Unallocated
                                                munications          Technologies          and Other            Total
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                                 
Balance at January 1, 2004                      $  1,576                $    9            $     150          $   1,735
Impairment                                        (1,420)                                                       (1,420)
Divestiture of frequency controls business           (30)                                                          (30)
Foreign currency translation & other                  (9)                                                           (9)
- ------------------------------------------------------------------------------------------------------------------------------------
Balance at September 30, 2004                   $    117                $    9            $     150          $     276
- ------------------------------------------------------------------------------------------------------------------------------------


Pursuant to SFAS No. 142,  "Goodwill and Other  Intangible  Assets,"  (SFAS 142)
goodwill is required to be tested for impairment  annually at the reporting unit
level.  In addition,  goodwill  should be tested for  impairment  between annual
tests if an event occurs or circumstances change that would more likely than not
reduce the fair value of the reporting  unit below its related  carrying  value.
The  reporting  unit  for  our   Telecommunications   segment  goodwill  is  our
Telecommunications  operating segment. While our annual goodwill  recoverability
assessment is completed in the fourth quarter,  as it is the traditionally based
on our annual strategic  planning  process that runs from June to October.  This
process  includes  reviewing  expectations  for  the  long-term  growth  of  the
telecommunications  industry and,  forecasting  future cash flows.  In the third
quarter,  we identified  certain factors during this annual  strategic  planning
process that caused us to lower our estimates and  projections for the long-term
revenue growth of the Telecommunications  segment, which indicated that the fair
value  of the  Telecommunications  segment  reporting  unit  was  less  than its
carrying  value.  As  such,  we  performed  an  interim  impairment  test of its
Telecommunications  segment  goodwill in the third  quarter of 2004 and reviewed
the outcome with Corning's board of directors on October 6, 2004.

Although we are currently  experiencing  stronger  than expected  volume in this
segment,  the improved demand comes from a narrow band of customers,  and we see
few signs of a broader recovery in overall demand, mix of premium products,  and
pricing  for our  products.  The  lack  of  industry  consolidations,  increased
competitive pressures in the industry,  and revised estimates of future customer
demand for the types of  products  they will deploy have caused us to change our
assessment of the future pace of recovery.  The primary  estimates and forecasts
driving  this  change  in  our  outlook  and  reducing  the  fair  value  of the
Telecommunications segment from that measured in 2003 follow:

..    Revised  estimates  of future  pricing for fiber and cable:  Pricing in the
     telecommunications industry remains depressed as the industry has failed to
     reduce capacity.  Our previous  projections assumed some rationalization of
     capacity that would lead to more stable pricing.  We now expect the current
     depressed pricing conditions to persist into 2005 and beyond.
..    Revised estimates of demand for premium fiber product: Based on competitive
     conditions and projected future customer requirements,  we do not expect to
     achieve  the level of demand  for  premium  fiber  products  we  previously
     projected.  Although we have introduced  innovative products to the market,
     we have not been able to obtain  the  historical  premium  prices  for such
     products. Additionally,  demand for premium fiber has declined as there are
     fewer projects  demanding premium fiber. As a result, we have significantly
     reduced our  outlook for future  revenue  and  profitability  from  premium
     products.  We now do not expect any  significant  increase in premium fiber
     mix for the foreseeable future.
..    Revised  estimates for the long-term  worldwide market volume growth: As we
     forecast  customer demand, we have lowered the rate of volume growth in the
     longer range.

We estimated the fair value of the Telecommunications segment using a discounted
cash flow model based on our current  estimates for the long-term  growth of the
Telecommunications   segment,   and  concluded   that  the  fair  value  of  the
Telecommunications  segment  was below its  carrying  amount.  We also  retained
valuation   specialists   to  assist  in  the  valuation  of  its  tangible  and
identifiable  intangible  assets for  purposes of  determining  the implied fair
value of goodwill at September 30, 2004. Accordingly,  we recorded an impairment
charge of $1,420 million to reduce the carrying value of goodwill to its implied
fair value of $117 million.  The goodwill impairment charge has been included in
restructuring,  impairments and other charges and (credits) on the  consolidated
statements of operations.



As  discussed in Note 4, on  September  1, 2004,  we  completed  the sale of our
frequency controls business,  which was part of the Telecommunications  segment,
and  recorded a loss on the sale of $14  million.  As  required  by SFAS 142, we
allocated a portion of the  Telecommunications  segment  goodwill balance to the
carrying  amount of the frequency  controls  business in determining the loss on
disposal.  The amount of goodwill to be  included  in that  carrying  amount was
based on the relative  fair value of the business to be disposed and the portion
of the  Telecommunications  segment  to be  retained.  The  amount  of  goodwill
allocated to the carrying value of frequency controls business was $30 million.



Other intangible assets follow (in millions):
- ------------------------------------------------------------------------------------------------------------------------------------
                                                        September 30, 2004                           December 31, 2003
                                                 ------------------------------------------------------------------------------
                                                            Accumulated                                 Accumulated
                                                  Gross    Amortization      Net              Gross    Amortization       Net
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                                     
Amortized intangible assets:
     Patents and trademarks                      $  144       $    69      $    75           $  145       $   57       $    88
     Non-competition agreements                     108           105            3              113           89            24
     Other                                            4             1            3                4            1             3
                                                 ----------------------------------          ----------------------------------
         Total amortized intangible assets          256           175           81              262          147           115

Other intangible assets:
     Intangible pension assets                       51                         51               51                         51
                                                 ----------------------------------          ----------------------------------
Total                                            $  307       $   175      $   132           $  313       $  147       $   166
- ------------------------------------------------------------------------------------------------------------------------------------


Amortized  intangible  assets are  primarily  related to the  Telecommunications
segment.

Amortization   expense  related  to  these  intangible  assets  is  expected  to
approximate  $16 million in 2005,  $11 million in 2006, $11 million in 2007, and
insignificant thereafter.







9.   Income Taxes



- ------------------------------------------------------------------------------------------------------------------------------------
                                                                        Three months                         Nine months
                                                                     ended September 30,                  ended September 30,
                                                                 -------------------------             -----------------------
(in millions):                                                       2004           2003                  2004           2003
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           
(Loss) income from continuing operations before income taxes:
  U.S. companies                                                 $  (1,285)        $ (168)             $ (1,491)       $  (831)
  Non-U.S. companies                                                  (334)            94                  (156)           163
- ------------------------------------------------------------------------------------------------------------------------------------
Loss from continuing operations before income taxes              $  (1,619)        $  (74)             $ (1,647)       $  (668)
- ------------------------------------------------------------------------------------------------------------------------------------

Current and deferred (provision) benefit for income taxes:
Current:
  Federal                                                        $       3         $   (4)             $     13        $    (9)
  State and municipal                                                    7             11                     7             13
  Foreign                                                              (16)             9                   (74)           (45)
Deferred:
   Federal                                                            (569)            30                  (547)           244
   State and municipal                                                (234)            (2)                 (220)            28
   Foreign                                                            (176)           (14)                 (176)           (23)
- ------------------------------------------------------------------------------------------------------------------------------------
(Provision) benefit for income taxes                             $    (985)        $   30              $   (997)       $   208
- ------------------------------------------------------------------------------------------------------------------------------------

Effective tax reconciliation:
   Benefit for income taxes at U.S. statutory rate               $     566         $   26              $    576        $   234
   State income tax, net of federal benefit                             19              4                    28             25
   Nondeductible goodwill and other expenses                          (417)            (1)                 (427)            (3)
   Foreign and other tax credits                                        23             (1)                                  (4)
   (Lower) higher taxes on subsidiary earnings                          (6)             4                   (12)           (35)
   Valuation allowances (a)                                         (1,174)            (1)               (1,174)            (4)
   Other items, net                                                      4             (1)                   12             (5)
- ------------------------------------------------------------------------------------------------------------------------------------
Effective (income tax) benefit                                   $    (985)        $   30              $   (997)       $   208
- ------------------------------------------------------------------------------------------------------------------------------------


(a)  For the three and nine months ended September 30, 2004, the increase in our
     valuation allowance reflects the following:
     .    $937 million in  provision  for income taxes caused by our decision to
          record a valuation allowance against certain deferred tax assets;
     .    the recording of valuation allowances against $237 million of deferred
          tax assets attributable to the deductible portion of the third quarter
          2004 goodwill  impairment,  restructuring  and other asset  impairment
          charges.

At September 30, 2004, we have recorded net deferred tax assets of approximately
$2.1 billion with a valuation allowance of approximately $1.6 billion.

Prior to the third quarter of 2004, we believed it was more likely than not that
our domestic (U.S. federal,  state and local) and German net deferred tax assets
would be realized. This assessment was based upon the following:

..    Approximately  $140  million  of our net  U.S.  deferred  tax  assets  were
     expected to have been realized  through net operating loss carryback claims
     to be filed over the next three to five years,  which would have  generated
     cash refunds during such period.
..    We expected the  remaining  net U.S.  and German  deferred tax assets to be
     realized from future earnings.
..    In the event future earnings were insufficient,  approximately $500 million
     of our net U.S.  deferred  tax assets were  expected to have been  realized
     through  a  tax-planning  strategy  involving  the sale of a  non-strategic
     appreciated asset.

As more fully explained below,  significant events occurred in the third quarter
of 2004  requiring  us to  increase  our  valuation  allowance  against  certain
specific U.S. and German deferred tax assets.



We assess the  realizability of our deferred tax assets on a quarterly basis. In
connection  with our third  quarter  assessment,  we  performed  a review of all
available positive and negative  evidence,  including an evaluation of scheduled
reversals of deferred tax  liabilities,  estimates of projected  future  taxable
income, and tax planning  strategies,  as well as related key assumptions.  SFAS
109,  "Accounting  for Income  Taxes,"  requires that greater weight be given to
previous  cumulative  losses  than the  outlook  for future  profitability  when
determining  whether  deferred tax assets can be used.  This review produced the
following conclusions:

..    Due to delays in finalizing the PCC  settlement,  we no longer believe that
     it is more likely  than not that we will  realize a portion of our net U.S.
     deferred tax assets through net operating loss carryback claims.
..    We have incurred  significant  losses in the U.S. and Germany due primarily
     to the  Telecommunications  restructuring  and impairment  charges over the
     last four years.  Although  Corning's  profitability  has improved over the
     last  several  quarters,  a growing  portion of our sales and  earnings  is
     outside  of the  U.S.,  particularly  in  Asia.  The  U.S.  portion  of our
     operations  is still  operating at a loss.  This portion not only  includes
     most of our  Telecommunications  segment, but also a significant portion of
     our  global   research,   development   and   engineering   and   corporate
     infrastructure spending. As we have taken additional significant impairment
     charges and lowered the outlook for our largest U.S. based business  during
     the third quarter,  we believe that a valuation allowance against these tax
     assets is required until realization is more assured.  Refer to Notes 4 and
     8 for additional information.

Accordingly,  we increased our valuation  allowance by $1.2 billion in the third
quarter of 2004 to reduce our net  deferred  tax  assets to  approximately  $530
million,  which are  primarily  U.S.  net  deferred  tax assets.  We continue to
believe  that it is more  likely than not that we could  realize  these net U.S.
deferred tax assets  through a  tax-planning  strategy  involving  the sale of a
non-strategic appreciated asset.

We expect to  maintain a valuation  allowance  on future tax  benefits  until an
appropriate  level of  profitability,  primarily  in the U.S.  and  Germany,  is
sustained  or we are able to develop tax planning  strategies  that enable us to
conclude  that it is more likely than not that a larger  portion of our deferred
tax assets would be realizable,  or if the PCC  settlement is finalized  earlier
than we anticipate.  Until then, our tax provision will include only the net tax
expense attributable to certain foreign operations.

10.  Product Warranty Liability

Our  product  warranty  reserves  relate  primarily  to  our  Telecommunications
segment.  A  reconciliation  of the  changes in the product  warranty  liability
during the nine months ended September 30 follows (in millions):
- --------------------------------------------------------------------------------
                                                           2004       2003
- --------------------------------------------------------------------------------
Balance at January 1                                    $    41      $  64
Provision based on current year sales                         8          3
Adjustments to liability existing on January 1               (6)       (18)
Foreign currency translation                                  0        (11)
Settlements made during the current period                   (6)         2
                                                        -------      -----
Balance at September 30                                 $    37      $  40
- --------------------------------------------------------------------------------

11.  Long-Term Debt

Third Quarter
- -------------
In the third  quarter of 2004,  we issued 6 million  shares of common  stock and
paid  $4  million  in  cash in  exchange  for  57,500  of our  3.5%  convertible
debentures  with a book value of $58 million.  In  accordance  with SFAS No. 84,
"Induced  Conversions of  Convertible  Debt," we recorded a charge of $4 million
reflecting  the fair value of the  incremental  consideration  given (i.e.,  the
cash)  beyond  those  required by the terms of the  debentures.  The increase in
equity due to issuance of shares from treasury stock was $53 million.



Second Quarter
- --------------
In the second  quarter of 2004, we issued 10 million  shares of common stock and
paid  $9  million  in  cash in  exchange  for  97,500  of our  3.5%  convertible
debentures with a book value of $98 million.  In accordance with SFAS No. 84, we
recorded  a loss of $9  million  reflecting  the fair  value of the  incremental
consideration  given (i.e.,  cash) shares  issued  beyond those  required by the
terms of the  debentures.  The increase in equity due to issuance of shares from
treasury stock was $88 million.

First Quarter
- -------------
In the first  quarter of 2004,  our  long-term  debt  transactions  included the
following:

Issuance of Long-Term Debt

In March 2004, we issued $400 million of senior  unsecured  notes, of which $200
million  aggregate  principal amount of 5.90% notes mature on March 15, 2014 and
$200 million aggregate principal amount of 6.20% notes mature on March 15, 2016.
These senior unsecured notes were issued under our existing $5 billion universal
shelf registration statement,  which became effective in March 2001. We realized
net proceeds of approximately  $396 million from the issuance of these notes. We
will pay interest  semi-annually on these senior unsecured notes on March 15 and
September 15.

Loss on Repurchases and Retirement of Debt, Net

3.5% convertible debentures
- ---------------------------
In the first  quarter of 2004,  we issued 22 million  shares of common stock and
paid $24 million in cash in exchange for our 3.5% convertible  debentures with a
book value of $213 million. In accordance with SFAS No. 84, we recorded a charge
of $23 million reflecting the fair value of the incremental  consideration given
(i.e., cash) beyond those required by the terms of the debentures.  The increase
in equity due to issuance of shares from treasury was $189 million.

Zero coupon convertible debentures
- ----------------------------------
In the first quarter of 2004,  we  repurchased  and retired  150,000 zero coupon
convertible debentures with a book value of $119 million in exchange for cash of
$117  million.  The gain on the  transaction  was offset by the write-off of the
unamortized issuance costs.

12.  Commitments and Contingencies

In 2003, we adopted the initial  recognition and measurement  provisions of FASB
Interpretation No. 45, "Guarantor's  Accounting and Disclosure  Requirements for
Guarantees,  Including Indirect Guarantees of Indebtedness of Others," (FIN 45).
We do not routinely provide significant third-party guarantees and, as a result,
this interpretation has not had a material effect on our financial statements.

We provide financial guarantees and incur contingent  liabilities in the form of
purchase price adjustments related to attainment of milestones, stand-by letters
of credit and performance  bonds.  These guarantees have various terms, and none
of these guarantees are individually significant. We have also agreed to provide
a  credit  facility  related  to Dow  Corning  as  discussed  in  Note 10 to the
Consolidated  Financial  Statements  in our 2003  Annual  Report  on Form  10-K.
Corning's obligation to fund the Dow Corning $150 million credit facility may be
triggered if in the next ten years Dow Corning is unable to meet its obligations
to fund the settlement  payments  required under its  Bankruptcy  Plan.  Corning
believes  that Dow Corning has  sufficient  cash flow and  liquidity to meet its
current  obligations.  As of September 30, 2004, we were contingently liable for
the items described  above totaling $367 million,  compared with $445 million at
December 31, 2003. We believe a  significant  majority of these  guarantees  and
contingent liabilities will expire without being funded.

From time to time, we are subject to  uncertainties  and  litigation and are not
always able to predict the outcome of these items with assurance.  Various legal
actions,  claims and proceedings are pending against us, including those arising
out  of  alleged  product  defects,  shareholder  matters,  product  warranties,
patents,  asbestos and environmental matters. These issues are discussed in Part
II-Other Information, Item 1. Legal Proceedings of this Form 10-Q.



13.  Comprehensive (Loss) Income



Comprehensive (loss) income, net of tax, was as follows (in millions):
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                        Three months                          Nine months
                                                                     ended September 30,                   ended September 30,
                                                                 -------------------------             --------------------------
                                                                     2004           2003                  2004           2003
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           
Net (loss) income                                                $  (2,491)       $    33              $ (2,328)       $   (194)
Other comprehensive (loss) income                                       (4)            46                    (7)             74
- ------------------------------------------------------------------------------------------------------------------------------------
Total comprehensive (loss) income                                $  (2,495)       $    79              $ (2,335)       $   (120)
- ------------------------------------------------------------------------------------------------------------------------------------


14.  (Loss) Earnings Per Common Share



The reconciliation of the amounts used in the basic and diluted (loss) earnings per common share from continuing operations
computations follows (in millions, except per share amounts):
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                             Three months ended September 30,
                                                   ---------------------------------------------------------------------------------
                                                                     2004                                     2003
                                                   ----------------------------------------    -------------------------------------
                                                      Net          Weighted-      Per Share       Net       Weighted-     Per Share
                                                     Loss       Average Shares     Amount       Income   Average Shares     Amount
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                                         
Basic (loss) earnings per common share             $  (2,511)       1,399         $ (1.79)     $   33         1,314        $  0.03
- ------------------------------------------------------------------------------------------------------------------------------------

Effect of dilutive securities:
   Stock options                                                                                                 20
   7% mandatory convertible preferred stock                                                                      56
- ------------------------------------------------------------------------------------------------------------------------------------

Diluted earnings (loss) per common share           $  (2,511)       1,399         $ (1.79)     $   33         1,390        $  0.02
- ------------------------------------------------------------------------------------------------------------------------------------




- ------------------------------------------------------------------------------------------------------------------------------------
                                                                              Nine months ended September 30,
                                                   ---------------------------------------------------------------------------------
                                                                     2004                                     2003
                                                   ----------------------------------------    -------------------------------------
                                                      Net          Weighted-      Per Share       Net       Weighted-     Per Share
                                                     Loss       Average Shares     Amount        Loss    Average Shares     Amount
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                                         
Basic and diluted loss per common share            $  (2,348)       1,380         $ (1.70)     $ (194)        1,253        $ (0.15)
- ------------------------------------------------------------------------------------------------------------------------------------







The following  potential  common shares were  excluded from the  calculation  of diluted (loss) earnings per common share due to
their  anti-dilutive  effect or, in the case of stock options,  because their exercise price was greater than the average market
price for the periods presented (in millions):
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                        Three months                         Nine months
                                                                     ended September 30,                  ended September 30,
                                                                     -------------------                  --------------------
                                                                     2004           2003                  2004           2003
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                                              
Potential common shares excluded from the calculation
of diluted earnings (loss) per common share:
     Stock options                                                    32                                   34              14
     7% mandatory convertible preferred stock                         35                                   37              70
     3.5% convertible debentures                                      39             69                    44              69
     4.875% convertible notes                                          6              6                     6               6
     Zero coupon convertible debentures                                3              6                     3              11
                                                                     ---------------------------------------------------------
     Total                                                           115             81                   124             170
                                                                     ---------------------------------------------------------

Stock options excluded from the calculation of diluted
  earnings (loss) per share because the exercise price was
  greater than the average market price of the common shares          61             69                    58              83
- ------------------------------------------------------------------------------------------------------------------------------------


15.  Operating Segments

SFAS  No.  131,  "Disclosures  about  Segments  of  an  Enterprise  and  Related
Information,"  set  standards  for  reporting  information  regarding  operating
segments in financial  statements.  Operating segments are defined as components
of an enterprise about which separate financial information is available that is
evaluated  regularly by the chief  operating  decision maker, or decision making
group, in deciding how to allocate resources and in assessing  performance.  Our
Chief  Operating  Decision-Making  group (CODM) is comprised of the chairman and
chief executive officer,  vice chairman and chief financial  officer,  president
and chief  operating  officer,  president-Corning  Technologies,  executive vice
president-chief   administrative  officer  and  executive  vice  president-chief
technology officer.

Effective  with the first quarter of 2004, we revised our  reportable  operating
segments from Telecommunications and Technologies to Telecommunications, Display
Technologies,   Environmental   Technologies  and  Life  Sciences.   Prior  year
information  has been  restated  to  conform  to this  revision.  The  following
provides  a  brief  description  of the  products  and  markets  served  by each
reportable segment:

..    Telecommunications  - manufactures optical fiber and cable and hardware and
     equipment components for the worldwide telecommunications industry;
..    Display Technologies - manufactures liquid crystal display glass substrates
     for flat panel displays;
..    Environmental  Technologies - manufactures  ceramic  substrates and filters
     for automobile and diesel applications; and
..    Life Sciences - manufactures  glass and plastic  consumables for scientific
     applications.

The change in our segment  presentation  reflects how Corning's  CODM  allocates
resources and assesses the performance of its businesses. Specifically, the CODM
is  significantly  increasing  its level of review of the  Display  Technologies
segment  due to the recent  increase  in growth  and  capital  spending  in that
segment.  In addition,  the CODM is increasing  its review of the  Environmental
Technologies  and Life Sciences  segments to strengthen the overall  balance and
stability of Corning's portfolio of businesses.







All other  operating  segments that do not meet the  quantitative  threshold for
separate  reporting (e.g.,  Specialty  Materials,  Ophthalmic,  and Conventional
Video  Components),   certain  corporate  investments  (e.g.,  Dow  Corning  and
Steuben),  discontinued operations and unallocated expenses have been grouped as
"Unallocated  and  Other".  Unallocated  expenses  include  research  and  other
expenses related to new business development; gains or losses on repurchases and
retirement of debt;  charges related to the asbestos  litigation;  restructuring
and  impairment  charges  related to the corporate  research and  development or
staff  organizations;  and charges for increases in our tax valuation allowance.
Unallocated  and Other also  represents  the  reconciliation  between  the total
operating  results for the reportable  segments and our  consolidated  operating
results.

We prepare the financial  results for our operating  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 include the
earnings of equity  affiliates  that are closely  associated  with our operating
segments in the  respective  segment's  net income.  We have  allocated  certain
common  expenses  among  segments  differently  than we  would  for  stand-alone
financial  information  prepared in accordance with GAAP. These expenses include
interest,  taxes  and  corporate  functions.  Segment  net  income  may  not  be
consistent with measures used by other companies. The accounting policies of our
operating  segments are the same as those applied in the consolidated  financial
statements.








- ------------------------------------------------------------------------------------------------------------------------------------
Operating Segments                             Telecom-        Display       Environmental     Life      Unallocated    Consolidated
(in millions)                                 munications   Technologies     Technologies    Sciences     and Other         Total
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                                       
For the three months ended September 30, 2004
Net sales                                      $   412        $    295        $    136        $    75      $     88      $  1,006
Research, development and engineering
  expenses (1)                                 $    21        $     22        $     23        $     9      $     13      $     88
Restructuring, impairment and other charges
  and (credits)                                $ 1,802                                                     $     (8)     $  1,794
Interest expense (2)                           $     9        $     15        $      7        $     1      $      4      $     36
(Provision) benefit for income taxes           $    (9)       $    (39)                       $    (1)     $   (936)     $   (985)
(Loss) income before minority interests and
  equity (losses) earnings (3)(4)              $(1,785)       $     74                        $     2      $   (895)     $ (2,604)
Minority interests (5)                                                                                           (3)           (3)
Equity in (losses) earnings of associated
  companies, net of impairments (6)                (35)             68                                           63            96
Income from discontinued operations                                                                              20            20
                                               -------        --------        --------        -------      --------      --------
Net (loss) income                              $(1,820)       $    142        $      0        $     2      $   (815)     $ (2,491)
- ------------------------------------------------------------------------------------------------------------------------------------

For the three months ended September 30, 2003
Net sales                                      $   370        $    144        $    121        $    70      $     67      $    772
Research, development and engineering
  expenses (1)                                 $    25        $     12        $     22        $     7      $     14      $     80
Restructuring, impairment and other charges
  and (credits)                                $    (2)                                                    $     (8)     $    (10)
Interest expense (2)                           $    16        $      9        $      5                     $      6      $     36
(Provision) benefit for income taxes           $    16        $    (13)       $     (2)       $    (1)     $     30      $     30
(Loss) income before minority interests and
  equity earnings (3)(4)                       $   (28)       $     25        $      2        $     3      $    (46)     $    (44)
Minority interests (5)                                                                                            2             2
Equity in earnings of associated
  companies, net of impairments                      1              39               1                           34            75
                                               -------        --------        --------        -------      --------      --------
Net (loss) income                              $   (27)       $     64        $      3        $     3      $    (10)     $     33
- ------------------------------------------------------------------------------------------------------------------------------------

For the nine months ended September 30, 2004
Net sales                                      $ 1,116        $    802        $    418        $   233      $    252      $  2,821
Research, development and engineering
  expenses (1)                                 $    69        $     57        $     64        $    27      $     40      $    257
Restructuring, impairment and other charges
  and (credits)                                $ 1,797                                                     $     (3)     $  1,794
Interest expense (2)                           $    41        $     37        $     17        $     4      $     10      $    109
(Provision) benefit for income taxes           $    25        $    (97)       $     (5)       $    (6)     $   (914)     $   (997)
(Loss) income before minority interests
  and equity (losses) earnings (3)(4)          $(1,853)       $    191        $     10        $    12      $ (1,004)     $ (2,644)
Minority interests (5)                               1                                                          (15)          (14)
Equity in (losses) earnings of associated
  companies, net of impairments (6)                (32)            204                                          138           310
Income from discontinued operations                                                                              20            20
                                               -------        --------        --------        -------      --------      --------
Net (loss) income                              $(1,884)       $    395        $     10        $    12      $   (861)     $ (2,328)
- ------------------------------------------------------------------------------------------------------------------------------------

For the nine months ended September 30, 2003
Net sales                                      $ 1,069        $    396        $    353        $   215      $    237      $  2,270
Research, development and engineering
  expenses (1)                                 $    95        $     36        $     63        $    21      $     43      $    258
Restructuring, impairment and other charges
  and (credits)                                $   (30)                                                    $    120      $     90
Interest expense (2)                           $    59        $     27        $     15        $     4      $     13      $    118
(Provision) benefit for income taxes           $    46        $    (30)       $     (6)       $    (7)     $    205      $    208
(Loss) income before minority interests
  and equity (losses) earnings (3)(4)          $  (141)       $     60        $     11        $    15      $   (405)     $   (460)
Minority interests (5)                                                                                           72            72
Equity in (losses) earnings of associated
  companies, net of impairments (6)                (10)             94                                          110           194
                                               -------        --------        --------        -------      --------      --------
Net (loss) income                              $  (151)       $    154        $     11        $    15      $   (223)     $   (194)
- ------------------------------------------------------------------------------------------------------------------------------------






(1)  Non-direct  research,  development and  engineering  expenses are allocated
     based upon direct project spending for each segment.
(2)  Interest  expense is allocated to segments based on a percentage of segment
     net operating assets.  Consolidated  subsidiaries with independent  capital
     structures do not receive additional allocations of interest expense.
(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)  (Loss)  income  before  minority  interests  and equity  (losses)  earnings
     includes an allocation of  depreciation  of corporate  property,  plant and
     equipment not specifically  identifiable to a segment.  Related depreciable
     assets are not allocated to segment assets.
(5)  Minority  interests  include the following  restructuring,  impairment  and
     other charges and (credits):
          For the three and nine months ended September 30, 2004, gains from the
          sale of assets of Corning  Asahi Video  Products  Company in excess of
          assumed salvage value of $4 and $17, respectively.
          For the nine months ended  September 30, 2003,  charges of $59 related
          to  impairment of  long-lived  assets of Corning Asahi Video  Products
          Company.
(6)  Equity in (losses)  earnings of associated  companies,  net of  impairments
     includes the following charges related to impairments of equity investments
     in the Telecommunications segment:
          $35 million for the three and nine months ended September 30, 2004.
          $7 million for the nine months ended September 30, 2003.




A  reconciliation  of reportable  segment net (loss) income to consolidated  net (loss) income follows:
- ------------------------------------------------------------------------------------------------------------------------------------
                                                               For the three months                For the nine months
                                                                ended September 30,                ended September 30,
                                                            -------------------------          --------------------------
                                                              2004            2003               2004            2003
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                                  
Net (loss) income of reportable segments                    $  (1,676)     $      43           $  (1,467)     $      29
Non-reportable operating segments net income (loss) (1)             9             (1)                 10            (48)
Unallocated amounts:
    Non-segment loss and other (2)                                 (3)            (4)                (10)           (33)
    Non-segment restructuring, impairment and
       other (charges) and credits                                  1             (3)                  5            (13)
    Asbestos settlement                                            50            (51)                (16)          (388)
    Interest income                                                 6              7                  16             24
    (Loss) gain on repurchases of debt                             (4)             2                 (36)            19
    (Provision) benefit for income taxes (3)                     (934)            19                (931)           152
    Equity in earnings of associated companies, net
       of impairments (4)                                          40             21                  81             64
    Income from discontinued operations                            20                                 20
                                                            ---------      ---------           ---------      ---------
Net (loss) income                                           $  (2,491)     $      33           $  (2,328)     $    (194)
- ------------------------------------------------------------------------------------------------------------------------------------


(1)  Non-reportable operating segments net income (loss) includes the results of
     non-reportable operating segments.
(2)  Non-segment  loss and other includes the results of non-segment  operations
     and other corporate activities.
(3)  (Provision)  benefit  for  income  taxes  includes  taxes  associated  with
     non-segment  restructuring,  impairment and other charges and (credits) and
     $937 for the impact of establishing a valuation  allowance  against certain
     deferred tax assets in the third quarter of 2004.
(4)  Equity in earnings of associated  companies,  net of  impairments  includes
     amounts   derived  from  corporate   investments,   primarily  Dow  Corning
     Corporation.







ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

Overview

We  continue to focus on three key  priorities  in 2004:  protect our  financial
health, improve our profitability, and invest in the future. We continue to make
progress towards all three in 2004.

Financial Health
During the third  quarter of 2004, we continued to make strides in improving our
balance sheet and delivering positive cash flows from operating activities.  The
following are the highlights  for the three and nine months ended  September 30,
2004:

..    As part of our ongoing debt  reduction  program,  we retired $58 million of
     our 3.5% convertible  debentures  during the third quarter of 2004. For the
     nine months  ended  September  30,  2004,  we have  retired a total of $368
     million of our 3.5%  convertible  debentures  and $119  million of our zero
     coupon bonds.
..    We ended  the  third  quarter  of 2004  with  $1.7  billion  in cash,  cash
     equivalents  and  short-term  investments.  This  represents an increase of
     approximately  $470  million  compared to our  December  31, 2003  balance,
     primarily due to the issuance of $400 million senior unsecured notes in the
     first quarter of 2004 and improved operating cash flows for the nine months
     ended September 30, 2004.
..    We generated  sufficient cash flows from operating  activities to cover our
     capital expenditures.

Profitability
During the third quarter of 2004, Corning's net loss reflects the following:

..    a $1,794  million  ($1,798  million  after-tax  and  minority  interest) of
     restructuring,  impairment and other charges and (credits), which primarily
     comprised   Telecommunications   segment  impairment  charges  relating  to
     goodwill of $1,420 million and fixed assets of $374 million;
..    a  $50  million   asbestos   settlement   credit,   which  relates  to  the
     mark-to-market  adjustment of the Pittsburgh Corning Corporation  liability
     to be settled in Corning's common stock;
..    a $4 million loss on the repurchases of debt;
..    a $937  million in  provision  for income  taxes  caused by our decision to
     record a valuation allowance against certain deferred tax assets;
..    a $35 million  impairment charge to write-down  certain  Telecommunications
     equity method  investments  to fair value,  which is reflected in equity in
     earnings of associated companies, net of impairments; and
..    a $20  million  gain  related  to the  sale of our  former  precision  lens
     business, which is included in income from discontinued operation.

The goodwill and fixed asset impairment  charges were triggered from the results
of our annual  strategic  planning  process of the  Telecommunications  segment.
Specifically,  we determined that we needed to lower our estimates and forecasts
for the long-term revenue growth of the Telecommunications  segment. Although we
are currently  experiencing  stronger than expected volume in this segment,  the
improved demand comes from a narrow band of customers, and we see few signs of a
broader recovery in overall demand, mix of premium products, and pricing for our
products. The lack of industry consolidation, increased competitive pressures in
the industry,  and revised  estimates of future customer demand for the types of
products they will deploy have caused us to change our  assessment of the future
pace of recovery. The primary estimates and forecasts driving this change in our
outlook are:







..    Revised  estimates  of future  pricing for fiber and cable:  Pricing in the
     telecommunications industry remains depressed as the industry has failed to
     reduce capacity.  Our previous  projections assumed some rationalization of
     capacity that would lead to more stable pricing.  We now expect the current
     depressed pricing conditions to persist into 2005 and beyond.
..    Revised estimates of demand for premium fiber product: Based on competitive
     conditions and projected future customer requirements,  we do not expect to
     achieve  the level of demand  for  premium  fiber  products  we  previously
     forecasted.  Although we have introduced innovative products to the market,
     we have not been able to obtain the  historically  premium  prices for such
     products. Additionally,  demand for premium fiber has declined as there are
     fewer long-haul  projects.  As a result, we have significantly  reduced our
     outlook for future revenue and profitability from premium products.  We now
     do not  expect  any  significant  increase  in  premium  fiber  mix for the
     foreseeable future.
..    Revised  estimates for the long-term  worldwide market volume growth: As we
     project customer  demand,  we have lowered the rate of volume growth in the
     longer range.

As a result of the  impairment  charges  and  lower  long-term  outlook  for our
Telecommunication  segment,  we have  also  concluded  that we  must  provide  a
valuation  allowance  against  certain of our deferred tax assets in  accordance
with Financial  Accounting  Standards  Board  Statement of Financial  Accounting
Standard (SFAS) No. 109, "Accounting for Income Taxes" (SFAS 109). The valuation
allowance  relates to our domestic  (U.S.  federal,  state and local) and German
deferred tax assets. We have incurred significant losses in the U.S. and Germany
due primarily to the Telecommunications restructuring and impairment charges and
operating losses over the last four years. Although Corning's  profitability has
improved  over the last  several  quarters,  a growing  portion of our sales and
earnings is outside of the U.S.,  particularly in Asia. The U.S.  portion of our
operations is still  operating at a loss. This portion not only includes most of
our  Telecommunications  segment,  but also a significant  portion of our global
research,  development and engineering and corporate infrastructure spending. As
we have taken additional  significant impairment charges and lowered our outlook
for our largest U.S. based business during the third quarter,  we believe that a
valuation  allowance  against these tax assets is required until  realization is
more assured.  We remain  committed to return to  profitability  in the U.S. and
Germany so that we will be able to use these  deferred  tax assets  before  they
expire.  In  general,  U.S.  tax  laws  allow 20  years  to use  operating  loss
carryforwards.

Investing in our Future
We  continue  to invest in a wide array of  technologies,  with our focus  being
glass  substrates  for active  matrix liquid  crystal  displays  (LCDs),  diesel
filters and substrates in response to tightening  emissions  control  standards,
and  optical  fiber  and cable  and  hardware  and  equipment  that will  enable
fiber-to-the-premises.  Our research,  development and engineering expenses have
remained relatively constant for the respective three and nine month periods. We
believe our  current  spending  levels are  adequate to enable us to execute our
growth strategies.

Our  capital  expenditures  are  primarily  focused on  expanding  manufacturing
capacity for LCD glass substrates in the Display Technologies segment and diesel
products in the Environmental  Technologies segment.  Total capital expenditures
for the three and nine months  ended  September  30, 2004 were $254  million and
$556 million,  respectively.  Of these  amounts,  $191 million and $416 million,
respectively, were directed toward our Display Technologies segment.

On October 6, 2004,  Corning's board of directors approved an additional capital
expenditure  plan  of $326  million  to  further  expand  our LCD  manufacturing
capacity in Taichung,  Taiwan.  This is the fourth  major LCD capital  expansion
announced  in the past 18  months.  Our  2004  forecasted  consolidated  capital
spending remains at $950 million to $1 billion.  Of this amount, $750 million to
$800 million will be directed toward our Display Technologies segment, with this
year's portion of the  recently-announced  expansion plan being included in this
range.








RESULTS OF CONTINUING OPERATIONS



Selected highlights for the third quarter follow (dollars in millions):
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                        Three months                          Nine months
                                                                     ended September 30,                   ended September 30,
                                                                  -------------------------             -------------------------
                                                                     2004           2003                  2004           2003
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           
Net sales                                                         $   1,006       $    772              $  2,821       $   2,270

Gross margin                                                      $     404       $    226              $  1,050       $     607
  (gross margin %)                                                      40%            29%                   37%             27%

Selling, general and administrative expenses                      $     153       $    147              $    479       $     447
  (as a % of net sales)                                                 15%            19%                   17%             20%

Research, development and engineering expenses                    $      88       $     80              $    257       $     258
  (as a % of net sales)                                                  9%            10%                    9%             11%

Restructuring, impairment and other charges and (credits)         $   1,794       $   (10)              $  1,794       $      90
  (as a % of net sales)                                                178%           (1)%                   64%              4%

Asbestos settlement                                               $    (50)       $     51              $     16       $     388
  (as a % of net sales)                                                (5)%             7%                    1%             17%

Loss from continuing operations before income taxes               $ (1,619)       $   (74)              $(1,647)       $   (668)
  (as a % of net sales)                                              (161)%          (10)%                 (58)%           (29)%

(Provision) benefit for income taxes                              $   (985)       $     30              $  (997)       $     208
  (as a % of net sales)                                               (98)%             4%                 (35)%              9%

Equity in earnings of associated companies, net
  of impairments                                                  $      96       $     75              $    310       $     194
  (as a % of net sales)                                                 10%            10%                   11%              9%

(Loss) income from continuing operations                          $ (2,511)       $     33              $(2,348)       $   (194)
  (as a % of net sales)                                              (250)%             4%                 (83)%            (9)%
- ------------------------------------------------------------------------------------------------------------------------------------


Net Sales
Net sales  increased 30%, or $234 million,  for the three months ended September
30, 2004 compared to the prior year quarter.  The primary drivers of this growth
were the continued high demand for glass substrates in our Display  Technologies
segment and demand for products in our Telecommunications  segment mostly due to
the fiber-to-the-premises  build-out in North America. For the nine months ended
September 30, 2004, our net sales  increased $551 million,  or 24%,  compared to
the prior year period.  The growth in the Display  Technologies  segment was the
primary driver.  Strong performance in the Environmental  Technologies  segment,
for both automotive and diesel products, as well as our other operating segments
more  than  offset  the  sales  decreases  resulting  from  our  exiting  of the
conventional video and photonic  technologies  businesses in 2003.  Movements in
foreign  exchange  rates,  primarily  the Japanese Yen and Euro,  did not have a
significant  impact on sales for the three and nine months ended  September  30,
2004, compared to their respective 2003 periods.







Gross Margin
As a percentage of net sales, gross margin improved 11 percentage points for the
three months ended September 30, 2004,  compared to the prior year quarter.  For
the nine months ended  September  30, 2004,  the  improvement  was 10 percentage
points compared to the prior year period. The improvement in both periods can be
attributed to: (a) lower  depreciation and fixed costs due to the  restructuring
actions  taken in 2003,  most  notably the exit of the  conventional  television
businesses,  and (b) revenue growth in the Display  Technologies segment of 105%
and 103% for the respective three and nine month periods.

Selling, General and Administrative Expenses
As a percentage of sales, selling, general and administrative expenses decreased
4 percentage  points and 3 percentage points for the three and nine months ended
September 30, 2004, respectively, compared to the corresponding periods in 2003.
For the three and nine months ended  September  30, 2004,  selling,  general and
administrative  expenses  increased  $6 million and $32  million,  respectively,
compared to the  corresponding  periods in 2003.  These increases were primarily
related to general increases in compensation costs.

Research, Development and Engineering Expenses
As a  percentage  of  sales,  research,  development  and  engineering  expenses
decreased by 1 percentage  point and 2 percentage  points for the three and nine
months ended  September 30, 2004,  respectively,  compared to the  corresponding
periods in 2003.  Total  research,  development  and  engineering  expenses  has
remained relatively constant for the respective  periods.  However,  during 2004
the focus of our  spending  has  shifted  from  Telecommunications  projects  to
Display Technologies projects with investments in Environmental Technologies and
Life Sciences remaining relatively constant.



Restructuring, Impairment and Other Charges and (Credits)
We recorded  significant  net charges during the third quarter of 2004 impacting the  comparison  of the three and nine months ended
September 30, 2004 to their respective  prior year  periods.  A summary  of the net  charges  and  (credits) recorded during the
periods follows (in millions):
- ------------------------------------------------------------------------------------------------------------------------------------
                                                           Three months                          Nine months
                                                        ended September 30,                   ended September 30,
                                                     -------------------------            --------------------------
                                                        2004           2003                  2004            2003
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                              
Impairment of goodwill                               $   1,420       $      -             $   1,420       $       -
Impairment of long-lived assets other
   than goodwill
     Assets to be disposed of by
       sale or abandonment                                 330             (9)                  295             (26)
     Assets to be held and used                             24                                   24              62
Accelerated Depreciation                                                                         39
Loss on sale of businesses                                  14             13                    14              13
Impairment of cost investments                                             (1)                                    4
Restructuring charges and (credits)                          6            (13)                    2              37
                                                     ---------       --------             ---------       ---------
Total restructuring, impairment
   other charges and (credits)                       $   1,794       $    (10)            $   1,794       $      90
- ------------------------------------------------------------------------------------------------------------------------------------





     Impairment of Goodwill
     ----------------------

     Pursuant to SFAS No. 142,  "Goodwill and Other  Intangible  Assets,"  (SFAS
     142)  goodwill  is  required  to be tested for  impairment  annually at the
     reporting unit level. In addition, goodwill should be tested for impairment
     between annual tests if an event occurs or circumstances  change that would
     more likely than not reduce the fair value of the reporting  unit below its
     related  carrying  value.  The  reporting  unit for our  Telecommunications
     segment goodwill is our  Telecommunications  operating segment.  Our annual
     goodwill  recoverability  assessment is completed in the fourth quarter, as
     it is  traditionally  based on our annual  strategic  planning process that
     runs from June to October. This process includes reviewing expectations for
     the long-term  growth of the  telecommunications  industry and  forecasting
     future cash flows.  In the third  quarter,  we identified  certain  factors
     during this annual  strategic  planning process that caused us to lower our
     estimates  and  projections  for  the  long-term   revenue  growth  of  the
     Telecommunications  segment,  which  indicated  that the fair  value of the
     Telecommunications segment reporting unit was less than its carrying value.
     As such, we performed an interim impairment test of our  Telecommunications
     segment goodwill in the third quarter of 2004 and reviewed the outcome with
     Corning's board of directors on October 6, 2004.

     We  estimated  the fair  value of the  Telecommunications  segment  using a
     discounted cash flow model based on our current estimates for the long-term
     growth of the Telecommunications segment, and concluded that the fair value
     of  the   Telecommunications   segment  was  below  its  carrying   amount.
     Accordingly,  we recorded an impairment  charge of $1,420 million to reduce
     the carrying value of goodwill to its estimated fair value of $117 million.

     Refer  to Note 8 of the  consolidated  financial  statements  and  Critical
     Accounting Policies and Estimates for additional details.

     Impairment of Long-Lived Assets Other Than Goodwill
     ---------------------------------------------------

     Assets to be disposed of by sale or abandonment

     These charges comprise the following:
     .    Telecommunications  segment: In the third quarter of 2004, we recorded
          a net $338  million  charge to impair plant and  equipment  related to
          certain  facilities to be disposed of or shutdown.  Approximately $332
          million  of  this  charge  is  comprised  of the  partially  completed
          sections of our Concord,  N.C. optical fiber facility.  As a result of
          our lowered outlook,  we have permanently  abandoned this construction
          in progress as we no longer  believe the demand for optical fiber will
          warrant the investment  necessary to complete this  facility.  Corning
          will    continue   to   mothball   and    depreciate    the   separate
          previously-operated   portion  of  the  Concord  fiber  facility.  The
          remaining charge of $6 million relates to current  impairment  charges
          for various  assets  available  for sale ($18 million) and credits for
          assets  originally  impaired  in 2002  but  will  now be  utilized  in
          operations ($12 million).

     .    Other  businesses:  We  recorded  gains  on the sale of  assets  of $8
          million and $41 million for the three and nine months ended  September
          30, 2004, respectively,  compared to gains on the sale of assets of $9
          million and $26 million for the three and nine months ended  September
          30, 2003, respectively.  The 2004 and 2003 gains relate to proceeds in
          excess of  assumed  salvage  values for  assets  previously  impaired,
          primarily  relating to assets of Corning Asahi Video Products  Company
          (CAV) sold to a third party in China.  In July 2004,  we completed the
          sale of CAV's assets.

     Assets to be held and used

     These charges comprise the following:
     .    Telecommunications segment: Due to our decision to permanently abandon
          certain   assets   and   lower   our   long-term   outlook   for   the
          Telecommunications  segment  during  the  third  quarter  of 2004,  we
          determined   that  an  event  of   impairment   had  occurred  in  our
          Telecommunications  segment  which  required us to test the  segment's
          long-lived  assets other than goodwill for impairment.  As a result of
          this  impairment  evaluation,  we  recorded a $24  million  impairment
          charge in the third  quarter of 2004 to write-down  certain  assets to
          fair value.


     .    Other businesses:  As a result of our decision to exit CAV in April of
          2003, we recorded an asset impairment charge of $62 million during the
          nine months ended  September 30, 2003.  These assets were written down
          to estimated  salvage  value,  as this amount was our best estimate of
          fair value.

     In connection with the above charges,  our impairment  evaluations included
     the  development of expected future cash flows against which to compare the
     carrying value of the asset group being evaluated.

     Accelerated Depreciation
     ------------------------

     We recorded  $39  million of  accelerated  depreciation  in the nine months
     ended   September  30,  2004   relating  to  the  final   shutdown  of  our
     semiconductor  materials   manufacturing  facility  in  Charleston,   South
     Carolina, which we announced in the fourth quarter of 2003.

     Loss on Sale of Businesses
     --------------------------

     On  September  1,  2004 we  completed  the sale of our  frequency  controls
     business,  which was part of the  Telecommunications  segment, for net cash
     proceeds of $80  million.  We  recorded a loss on the sale of $14  million,
     which  included  an  allocation  of $30  million of the  Telecommunications
     segment goodwill.  The frequency controls business had 2003 annual sales of
     $76 million.

     During the three months ended September 30, 2003, we recorded a $13 million
     loss on the sale of a  significant  portion  of our  photonic  technologies
     business, which was part of our Telecommunications segment.

     Impairment of Cost Investments
     ------------------------------

     In the first  quarter of 2003,  we  recorded a $5 million  charge for other
     than   temporary    declines   in   certain   cost   investments   in   the
     Telecommunications  segment.  In the third  quarter of 2003,  we sold these
     investments  for $4  million  in  cash,  which  was $1  million  more  than
     previously  expected.  We reported  this gain as a credit to  restructuring
     actions.

     Restructuring Charges and (Credits)
     -----------------------------------

     2004 Restructuring Actions

     In the third quarter of 2004, we recorded a charge of $6 million  comprised
     of  adjustments  to prior  years'  restructuring  and  impairment  charges,
     including  charges of $5 million for employee  separation costs and charges
     of $1 million for exit costs.

     For the nine months ended September 30, 2004, we recorded net charges of $2
     million.  In addition to the third  quarter 2004  charges,  we recorded net
     credits of $4 million  primarily for reversals of reserves related to prior
     years' restructuring charges.

     2003 Restructuring Actions

     In the third  quarter of 2003,  we  recorded  net  credits  of $13  million
     comprised of reversals of  restructuring  reserves  related to prior years'
     restructuring charges ($16 million) offset by a charge ($3 million) related
     to the exit of the photonic technologies business.


     For the nine months ended  September  30, 2003,  we recorded net charges of
     $37 million. In addition to the third quarter 2003 net credits, we incurred
     net charges of $50 million from the following actions:

     .    charges for the exit of our photonics technologies business;
     .    charges for restructuring  actions in the  Telecommunications  segment
          and administrative staffs; and
     .    credits  for  reversals  of  restructuring  reserves  related to prior
          years' restructuring charges.

Refer  to  Note  4 to  the  consolidated  financial  statements  for  additional
information.

Asbestos Settlement
For the three and nine months ended  September 30, 2004,  we recorded  (credits)
charges of $(50) million and $16 million, respectively, related to the quarterly
mark-to-market  of our common  stock  associated  with the  asbestos  settlement
agreement.  For the three and nine months ended  September 30, 2003, we recorded
charges of $51 million and $388 million,  respectively,  as part of our asbestos
settlement,  the  latter of which  included  $298  million  associated  with the
initial settlement. Refer to Note 5 to the consolidated financial statements for
additional information.

Loss From Continuing Operations Before Income Taxes
For the  three  months  ended  September  30,  2004,  we  incurred  a loss  from
continuing  operations  before income taxes of $1,619 million compared to a loss
of $74 million for the prior year quarter.  For the nine months ended  September
30, 2004, we incurred a loss from continuing  operations  before income taxes of
$1,647 million compared to a loss of $668 million for the prior year period. For
both the three and nine month  comparisons,  the key drivers are outlined  under
Gross Margin,  Restructuring,  Impairment and Other Charges and  (Credits),  and
Asbestos Settlement.



In addition to the above, the following impacted the results of our loss from continuing operations before income taxes:
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                        Three months                         Nine months
                                                                     ended September 30,                  ended September 30,
                                                                     -------------------                  -------------------
                                                                     2004           2003                  2004           2003
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                                             
(Loss)  gain on  repurchases  and  retirement  of debt,  net         $(4)            $2                   $(36)          $19
- ------------------------------------------------------------------------------------------------------------------------------------


Refer to Note 12 to the  consolidated  financial  statements  and Corning's 2003
Annual  Report on Form 10-K for  additional  information  regarding the (losses)
gains  recognized on the  repurchase  and  retirement of debt for the respective
periods.



(Provision) Benefit for Income Taxes
Our (provision)  benefit for income taxes and the related effective (income tax) benefit rates were as follows (in millions):
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                        Three months                         Nine months
                                                                     ended September 30,                  ended September 30,
                                                                    ---------------------                ---------------------
                                                                     2004           2003                  2004           2003
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                                             
(Provision) benefit for income taxes                                ($985)           $30                 ($997)          $208
Effective income tax rate                                            (61%)           41%                  (61%)          (31%)
- ------------------------------------------------------------------------------------------------------------------------------------


The  effective  (income  tax)  benefit  rate for the three and nine months ended
September 30, 2004  differed  from the U.S.  statutory tax rate of 35% primarily
due to an increase in the valuation  allowance  against  certain  domestic (U.S.
federal,  state and local) and foreign  deferred tax assets and the write-off of
nondeductible  goodwill.  The effective  (income tax) benefit rate for the three
months ended September 30, 2003, was higher than the U.S.  statutory  income tax
rate of 35% due to the reversal of restructuring  charges on which a tax benefit
was not  accrued.  The  effective  (income tax) benefit rate for the nine months
ended September 30, 2003, was lower than the U.S.  statutory  income tax rate of
35% due to the impact of restructuring,  impairment and other charges,  asbestos
settlement, debt transactions and state and local tax benefits.



In the third  quarter of 2004, we increased our tax expense by $937 million as a
result of our decision to establish a valuation  allowance against a significant
portion of our deferred tax assets, primarily in the U.S. and Germany. We assess
the realizability of our deferred tax assets on a quarterly basis. In connection
with our third  quarter  assessment,  we  performed  a review  of all  available
positive and negative evidence,  including an evaluation of scheduled  reversals
of deferred tax  liabilities,  estimates of projected  future taxable income and
tax planning  strategies as well as related key  assumptions.  SFAS 109 requires
that a valuation  allowance be established  when it is more likely than not that
all or a portion of a deferred tax asset will not be realized.  SFAS 109 further
requires that "greater  weight be given to previous  cumulative  losses than the
outlook for future  profitability  when determining  whether deferred tax assets
can be used."

We have incurred significant losses in the U.S. and Germany due primarily to the
restructuring   and   impairment   charges   and   operating   losses   in   our
Telecommunications  segment  over the last four years.  As a result of the third
quarter of 2004 impairment charges and the lowering of our long-term outlook for
the  Telecommunications  segment,  our  largest  U.S.  and German  business,  we
concluded that a valuation  allowance  against  certain  deferred tax assets was
required.

We expect to  maintain a valuation  allowance  on future tax  benefits  until an
appropriate  level of  profitability,  primarily  in the U.S.  and  Germany,  is
sustained  or we are able to develop tax planning  strategies  that enable us to
conclude  that it is more likely than not that a larger  portion of our deferred
tax assets would be realizable,  or if the PCC  settlement is finalized  earlier
than we anticipate.  Until then, our tax provision will include only the net tax
expense  attributable  to  certain  foreign  operations.  Refer to Note 9 to the
consolidated financial statements for additional information.



Equity in Earnings of Associated Companies, Net of Impairments
For the three months ended September 30, 2004, equity earnings increased $21 million, or 28%, compared to the prior year quarter,
primarily due to the strong performance of Samsung Corning Precision Glass Company, Ltd. (Samsung Corning Precision). For the nine
months ended September 30, 2004, equity earnings increased $116 million, or 60%, compared to the prior year period, primarily due to
Samsung Corning Precision. A summary of equity earnings follows (in millions):
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                          Three months                         Nine months
                                                                     ended September 30,                   ended September 30,
                                                                  -------------------------             --------------------------
                                                                     2004           2003                  2004           2003
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           
Samsung Corning Precision                                         $      68       $     39              $    204       $      94
Dow Corning Corporation                                                  40             22                    81              64
All other                                                               (12)            14                    25              36
                                                                  ---------       --------              --------       ---------
Total equity earnings                                             $      96       $     75              $    310       $     194
- ------------------------------------------------------------------------------------------------------------------------------------


During the third quarter of 2004, we recorded  other-than-temporary  impairments
of certain Telecommunications segment investments of $35 million.

Refer  to  Note  7 to  the  consolidated  financial  statements  for  additional
information.



(Loss) Income From Continuing Operations
As a result of the above, our (loss) income from continuing operations and per share data were as follows (in millions, except per
share amounts):
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                         Three months                          Nine months
                                                                      ended September 30,                  ended September 30,
                                                                  -------------------------             --------------------------
                                                                     2004           2003                  2004           2003
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           
(Loss) income from continuing operations                          $  2,511)       $     33              $  (2,348)     $   (194)
Basic (loss) earnings per common share                            $  (1.79)       $   0.03              $   (1.70)     $  (0.15)
Diluted (loss) earnings per common share                          $  (1.79)       $   0.02              $   (1.70)     $  (0.15)
Shares used in computing per share amounts
     Basic (loss) earnings per common share                          1,399           1,314                  1,380         1,253
     Diluted (loss) earnings per common share                        1,399           1,390                  1,380         1,253
- ------------------------------------------------------------------------------------------------------------------------------------



DISCONTINUED OPERATION

On December 13, 2002, we completed the sale of our precision lens business to 3M
Company  ("3M") for cash proceeds up to $850  million,  of which $50 million was
deposited in an escrow account. In 2003, 3M notified Corning that 3M believed it
had certain claims  arising out of the  representations  and warranties  made by
Corning in connection with the sale of the precision lens business to 3M. In the
third quarter of 2004,  Corning and 3M reached a final settlement  agreement for
the funds held in escrow.  Accordingly, we recognized a gain of $20 million upon
receipt  of $20  million  of  proceeds.  This gain is  included  in income  from
discontinued operation in the consolidated statement of operations.

OPERATING SEGMENTS

Effective  with the first quarter of 2004, we revised our  reportable  operating
segments from Telecommunications and Technologies to Telecommunications, Display
Technologies,   Environmental   Technologies  and  Life  Sciences.   Prior  year
information  has been  restated  to  conform  to this  revision.  The  following
provides  a  brief  description  of the  products  and  markets  served  by each
reportable segment:

..    Telecommunications  - manufactures optical fiber and cable and hardware and
     equipment components for the worldwide telecommunications industry;
..    Display Technologies - manufactures liquid crystal display glass substrates
     for flat panel displays;
..    Environmental  Technologies - manufactures  ceramic  substrates and filters
     for automobile and diesel applications; and
..    Life Sciences - manufactures  glass and plastic  consumables for scientific
     applications.

The change in our segment  presentation  reflects how Corning's  Chief Operating
Decision Making group (CODM) allocates resources and assesses the performance of
its businesses.  Specifically, the CODM is significantly increasing its level of
review of the Display  Technologies segment due to the recent increase in growth
and capital  spending in that segment.  In addition,  the CODM is increasing its
review  of  the  Environmental   Technologies  and  Life  Sciences  segments  to
strengthen  the  overall  balance  and  stability  of  Corning's   portfolio  of
businesses.

We prepare the financial  results for our operating  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 include the
earnings of equity  affiliates  that are closely  associated  with our operating
segments in the  respective  segment's  net income.  We have  allocated  certain
common  expenses  among  segments  differently  than we  would  for  stand-alone
financial   information  prepared  in  accordance  with  accounting   principles
generally accepted in the United States. These expenses include interest,  taxes
and corporate functions.  Segment net income may not be consistent with measures
used by other companies.  The accounting  policies of our operating segments are
the same as those applied in the consolidated financial statements.



Telecommunications
The following table provides net sales and other data for the Telecommunications segment (dollars in millions):
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                          Three months                        Nine months
                                                                     ended September 30,                  ended September 30,
                                                                  -------------------------             --------------------------
                                                                     2004           2003                  2004           2003
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           
Net sales:
   Optical fiber and cable                                        $     202       $    209              $    543       $   580
   Hardware and equipment                                               210            151                   573           446
   Photonic technologies                                                                10                                  43
                                                                  ---------       --------              --------       -------
     Total net sales                                              $     412       $    370              $  1,116       $ 1,069
                                                                  =========       ========              ========       =======

Net loss                                                          $  (1,820)      $    (27)             $ (1,884)      $  (151)
                                                                  =========       ========              ========       =======

Segment net loss as a percentage of segment sales                     (442)%           (7)%                (169)%         (14)%
- ------------------------------------------------------------------------------------------------------------------------------------



For the three months ended  September 30, 2004,  sales increased by $42 million,
or 11%, compared to the prior year quarter. This performance was led by sales of
hardware and equipment and optical fiber and cable in North  America,  primarily
driven by Verizon Communications'  fiber-to-the-premises  build-out,  and strong
sales in Europe.  For the  comparable  periods,  fiber volumes were up 29% while
prices declined 8%. Although fiber volumes were up considerably for the quarter,
optical  fiber and cable sales  declined  due to the price  declines  and strong
third  quarter  2003  sales for  aerial  and  submarine  projects  that were not
repeated in 2004.  Movements in foreign  exchange rates,  primarily the Japanese
Yen and Euro,  did not have a  significant  impact on sales for the three months
ended September 30, 2004, compared to the prior year quarter.

For the nine months ended September 30, 2004,  sales  increased $47 million,  or
4%,  compared  to the prior year  period.  The strong  results in the second and
third quarters of 2004 have been substantially  offset by the impact of the 2003
exit of the photonic technologies business and a decline of fiber sales in Japan
and China , compared to the prior year  period.  For the  comparable  nine month
periods,  fiber volumes have increased 9% and prices declined 10%.  Movements in
exchange  rates for the  comparable  nine month  periods  did not  significantly
impact sales.

For the  Telecommunications  segment,  the increased  losses in each of the 2004
periods  compared to their  respective  2003 are  primarily due to the goodwill,
fixed asset, and equity method  investments  impairment  charges recorded in the
third quarter of 2004. Refer to Results of Continuing  Operations for a detailed
discussion of these charges.

Outlook:
- --------
We expect sales in the fourth  quarter of 2004 to be down from the third quarter
of 2004,  primarily  reflecting  typical seasonal  declines in North America and
Europe.  We expect  fiber  volumes to decline  between 10% and 20% and  moderate
pricing declines compared to the third quarter.



Display Technologies
The following table provides net sales and other data for the Display Technologies segment (dollars in millions):
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                         Three months                          Nine months
                                                                      ended September 30,                  ended September 30,
                                                                  -------------------------             --------------------------
                                                                     2004           2003                  2004           2003
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           
Sales                                                             $     295       $    144              $    802       $     396
Income before equity earnings                                     $      74       $     25              $    191       $      60
Equity earnings of associated companies                           $      68       $     39              $    204       $      94
Net income                                                        $     142       $     64              $    395       $     154

Segment income before equity earnings as a percentage
  of segment sales                                                      25%            17%                   24%             15%
Segment net income as a percentage of segment sales                     48%            44%                   49%             39%
- ------------------------------------------------------------------------------------------------------------------------------------


For the three months ended September 30, 2004, sales increased $151 million,  or
105%, compared to the prior year quarter. This performance is largely reflective
of the overall LCD-market growth. For the third quarter of 2004, glass substrate
volumes  (measured  in square feet of glass sold)  increased  greater  than 70%.
Sales were also  benefited by modest  average  price  increases,  primarily  the
result of a change in product mix as the market  continues to trend toward large
size glass  substrates  (generation  5 and above)  which carry a higher  selling
price per square foot. The sales of the Display Technologies segment are largely
Asian  based and,  as such,  are  susceptible  to  movements  in the US dollar -
Japanese Yen exchange rates.  For the third quarter of 2004,  sales benefited by
approximately  9% from a weakening of the US dollar  compared to the same period
in 2003.

For the nine months ended September 30, 2004,  sales increased $406 million,  or
103%,  compared to the prior year period.  The factors  affecting the nine-month
performance  are largely the same as those  identified  for the third quarter of
2004. For the comparable nine month period,  glass substrate  volumes  increased
approximately  75%, average pricing increases were modest,  and movements in the
US dollar - Japanese Yen exchange  rates  benefited  sales by  approximately  9%
compared to the same period in 2003.


For the three and nine months ended  September  30, 2004,  income  before equity
earnings increased by more than 2.5 times compared to the prior quarter and more
than  tripled  compared  to the prior year  period.  For both  periods,  the key
drivers were the impact of incremental volumes and efficiencies realized through
the shift in  production  toward large size glass  substrates.  Movements in the
U.S.  dollar - Japanese Yen exchange rates did not have a significant  impact on
income before equity  earnings for the three and nine months ended September 30,
2004,  compared to their  respective  2003 periods.  The increases in our equity
earnings from Samsung Corning  Precision for the periods  presented were largely
driven by the same factors identified for our wholly-owned business.

The Display  Technologies  segment  manufactures and sells glass substrates to a
concentrated  customer base comprised of LCD panel makers  primarily  located in
Japan and  Taiwan.  LCD panels are used in computer  products,  such as notebook
computers and desktop monitors,  consumer electronics products,  such as digital
cameras and camcorders and car navigation systems, and LCD televisions.  For the
three and nine months ended September 30, 2004, six LCD customers  accounted for
78% of the Display  Technologies  segment sales.  In addition,  Samsung  Corning
Precision's sales were also  concentrated,  with 2 customers  accounting for 87%
and 84% of sales  for the  three  and nine  months  ended  September  30,  2004,
respectively.

Corning and these  customers  have  typically  entered  into  multi-year  supply
agreements  for the  purchase  and sale of glass  substrates.  These  agreements
provide for Corning to supply a percentage of the  customers'  requirements  and
include  mechanisms for forecasting and ordering.  During 2004, Corning improved
the payment  terms under these  agreements  to improve  cash flow and reduce its
working capital requirements.

The LCD market continues to grow rapidly.  This growth is being driven, in part,
by higher demand for LCD televisions, for which our LCD customers require larger
size glass  substrates.  Over the past few months,  Corning has held discussions
with several of its customers to discuss how to meet this demand. As part of its
discussions,  Corning has sought  improved  payment  terms,  including  deposits
against orders, to provide a greater degree of assurance that we are effectively
building capacity to meet the needs of a rapidly growing industry.  There can be
no assurance  that  Corning  will be able to pace its capacity  expansion to the
actual  demand and,  while the industry has grown  rapidly,  it is possible that
glass  manufacturing  capacity may exceed demand during certain periods.  In the
third  quarter of 2004,  we received  approximately  $100  million for  deposits
against orders.

Outlook:
- --------
We expect to see a  continuation  of the overall  industry  growth and the trend
toward  large  size  substrates  into the fourth  quarter.  We  continue  to see
positive trends in the penetration rates of LCD's into the end-markets (notebook
computers,  monitors and televisions),  and increasing demand for the large size
substrates.  Volume  growth  from  the  third  and  fourth  quarter  of  2004 is
anticipated to be between 3% and 10% and average  pricing is projected to remain
stable.  In addition,  we expect to remain sold out  throughout  the quarter and
plan to bring on additional  capacity  throughout  the quarter.  There can be no
assurance  that the  end-market  rates of growth will continue at the high rates
experienced in recent  quarters.  Consumer  preferences  for panels of differing
sizes, or price or other factors,  may lead to pauses in market growth from time
to time.



Environmental Technologies
The following table provides net sales and other data for the Environmental Technologies segment (dollars in millions):
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                         Three months                          Nine months
                                                                      ended September 30,                  ended September 30,
                                                                  ------------------------              -------------------------
                                                                     2004           2003                  2004           2003
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           
Sales                                                              $   136        $   121               $   418        $   353
Net income                                                         $     0        $     3               $    10        $    11

Segment net income as a percentage of segment sales                     0%             3%                    2%             3%
- ------------------------------------------------------------------------------------------------------------------------------------



For the three months ended September 30, 2004,  sales increased $15 million,  or
12%,  compared to the prior year  quarter.  We continue to see strong demand for
our  automotive  and diesel  products in response  to  ever-tightening  emission
standards around the world, although we are experiencing  near-term softening in
Asian retrofit markets for diesel products.  Our automotive  products  benefited
from both an  increase  in volume  and a higher mix of our  thin-wall  and ultra
thin-wall  substrates,  which allow our customers to meet their emission control
requirements in a more cost effective  manner.  Although  showing strong growth,
diesel  products  represented  a  modest  portion  of  the  total  Environmental
Technologies  sales for the three months ended  September 30, 2004. A portion of
the sales of the Environmental Technologies segment are susceptible to movements
in the US dollar - Euro exchange rates. Movements in exchange rates did not have
a significant impact on sales for the comparable quarters.

For the nine months ended September 30, 2004,  sales  increased $65 million,  or
18%,  compared to the prior year period.  The factors  affecting the  nine-month
period performance are largely the same as those identified for the quarter.

For the three  months  ended  September  30,  2004,  the  segment  operated at a
break-even  level  compared  to a modest  profit in the  comparable  prior  year
period.  The full benefits of the increases in product volumes and higher mix of
thin-wall and ultra thin wall  automotive  substrates have been offset by higher
development  and  engineering  costs for our  diesel  products  and  lower  than
expected  manufacturing  results  in the  quarter.  For the  nine  months  ended
September  30,  2004,  segment net income was  essentially  equal with the prior
year.  Similar to the three month  period  comparison,  the benefit of the sales
increase  is  not  being  reflected  in net  income  largely  due  to  increased
development and engineering spending.

Outlook:
- --------
For the fourth  quarter of 2004,  we expect to see a moderate  decrease in sales
compared to those of the third quarter, largely due to seasonal declines. Diesel
regulatory trends remain on track for the United States, Europe and Japan.



Life Sciences
The following table provides net sales and other data for the Life Sciences segment (dollars in millions):
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                          Three months                         Nine months
                                                                       ended September 30,                 ended September 30,
                                                                  -------------------------             -------------------------
                                                                     2004           2003                  2004           2003
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           
Sales                                                             $      75       $     70              $    233       $     215
Net income                                                        $       2       $      3              $     12       $      15

Segment net income as a percentage of segment sales                      3%             4%                    5%              7%
- ------------------------------------------------------------------------------------------------------------------------------------


For the three months ended September 30, 2004,  sales  increased $5 million,  or
7%, compared to the prior year quarter.  Volume increases across the majority of
our product  lines,  drove the sales  increase  compared to the third quarter of
2003.  Movements in foreign  exchange rates,  primarily the Euro, did not have a
significant impact on sales for the comparable quarters.

For the nine months ended September 30, 2004,  sales  increased $18 million,  or
8%,  compared to the prior year period.  The factors  affecting  the  nine-month
period performance are largely the same as those identified for the quarter.

For the three and nine months ended September 30, 2004 net income was consistent
with that of the  comparable  period.  For the three and nine month  periods the
incremental  gross  margin  improvements  resulting  from the  increase in sales
volumes have been largely offset by new product  development costs. In addition,
for the nine month period, the comparison of net income was negatively  impacted
due to a gain  recognized in the first quarter of 2003 on the  disposition  of a
minor product line.


Outlook:
- --------
For the fourth quarter of 2004, we expect a moderate  decrease in sales compared
to those of the third  quarter,  largely due to seasonal  declines.  We expect a
continuation of the positive  trends in research & development  spending for our
pharmaceutical, biotechnology, and academic customers.



Unallocated and Other
The following table provides net sales and other data for the non-reportable operating segments and unallocated items (dollars in
millions):
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                          Three months                        Nine months
                                                                       ended September 30,                 ended September 30,
                                                                  -------------------------             -------------------------
                                                                     2004           2003                  2004           2003
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           
Net sales:
   Conventional Video Components                                                  $     14              $      2       $      63
   Other businesses                                               $      88             53                   250             174
                                                                  ---------       --------              --------       ---------
     Total net sales                                              $      88       $     67              $    252       $     237
                                                                  =========       ========              ========       =========

Loss before minority interests and equity earnings                $    (895)      $    (46)             $ (1,004)      $    (405)
Equity earnings of associated companies                           $      63       $     34              $    138       $     110
Net loss                                                          $    (815)      $    (10)             $   (861)      $    (223)

Loss before minority interests and equity earnings
  as a percentage of net sales                                     (1,017)%          (69)%                (398)%          (171)%
Net loss as a percentage of net sales                                (926)%          (15)%                (342)%           (94)%
- ------------------------------------------------------------------------------------------------------------------------------------


Unallocated and Other includes all other operating segments that do not meet the
quantitative  threshold  for  separate  reporting  (e.g.,  Specialty  Materials,
Ophthalmic,  and Conventional Video Components),  certain corporate  investments
(e.g.,  Dow  Corning  and  Steuben),  discontinued  operations  and  unallocated
expenses.  Unallocated  expenses  include research and other expenses related to
new business development; gains or losses on repurchases and retirement of debt;
charges related to the asbestos litigation; restructuring and impairment charges
related to the corporate  research and development or staff  organizations;  and
charges for increases in our tax valuation allowance. Unallocated and Other also
represents  the  reconciliation  between  the total  operating  results  for the
reportable segments and our consolidated operating results.

The  increase in sales for the three and nine months  ended  September  30, 2004
compared to their  respective  prior year periods is primarily  attributable  to
improvements  in  our  specialty  materials  business.   The  2004  decrease  of
conventional  video components sales is due to our second quarter 2003 decision,
along  with  our  partner,  to cease  production  and  shut  down our 51%  owned
affiliate,  Corning Asahi Video Products Company (CAV), which was a manufacturer
of glass panels and funnels for use in conventional tube  televisions.  Although
sales in our Specialty Materials segment have increased over prior year periods,
we have recently  seen  reductions  in future  forecasts of customer  orders for
semiconductor  lens glass. It is too early to tell if this is a temporary market
correction  or the beginning of a downward  cycle in the business.  In addition,
technology  changes are being made by our customers  that will impact certain of
our product lines.  We will monitor this situation  during the fourth quarter of
2004,  and it is  possible we could see asset  write-offs  or  impairments  as a
result of these changes.

Refer to the discussion regarding Restructuring,  Impairment,  and Other Charges
and (Credits),  Asbestos Settlement and (Provision) Benefit for Income Taxes for
a description of the key drivers of net loss for periods presented.


LIQUIDITY AND CAPITAL RESOURCES

Financing Structure
During the third quarter of 2004, we issued 6 million shares of common stock and
paid  $4  million  in  cash in  exchange  for  57,500  of our  3.5%  convertible
debentures  with a book value of $58  million.  We recorded a loss of $4 million
relating to the retirement of debt.

During the second  quarter of 2004, we issued 10 million  shares of common stock
and paid $9  million  in cash in  exchange  for  97,500 of our 3.5%  convertible
debentures  with a book value of $98  million.  We recorded a loss of $9 million
relating to the retirement of debt.

During the first  quarter of 2004,  we issued 22 million  shares of common stock
and paid $24 million in cash in  exchange  for our 3.5%  convertible  debentures
with a book value of $213 million.  In addition,  we repurchased  150,000 of our
zero  coupon  convertible  debentures  with a book value $119  million  for $117
million in cash.  As a result of these  transactions,  we recorded a loss of $23
million.

In March  2004,  we issued  $400  million of senior  unsecured  notes  under our
existing  $5  billion  universal  shelf  registration  statement,  which  became
effective  in March 2001.  We realized  net  proceeds of $396  million  from the
issuance of these notes. As of September 30, 2004, our remaining  capacity under
the shelf registration was approximately $2.5 billion.

As an additional source of funds, we currently have full unrestricted  access to
a $2 billion  revolving  credit  facility with 16 banks,  expiring on August 17,
2005.  As of  September  30,  2004,  there were no  borrowings  under the credit
facility.  The facility  includes one financial  covenant  limiting the ratio of
total debt to total capital,  as defined,  to not greater than 60%. At September
30, 2004, this ratio was 42%.

Capital Spending
Capital  spending  totaled $556 million and $204 million  during the nine months
ended   September  30,  2004  and  2003,   respectively.   Our  2004  forecasted
consolidated  capital  spending  remains at $950 million to $1 billion.  Of this
amount,  $750  million  to  $800  million  will  be  directed  toward  expanding
manufacturing  capacity  for LCD glass  substrates  in the Display  Technologies
segment.

On October 6, 2004,  Corning's board of directors approved an additional capital
expenditure  plan  of $326  million  to  further  expand  our LCD  manufacturing
capacity in Taichung,  Taiwan. This is the fourth major LCD capital expansion in
the past 18 months. This year's portion of the recent expansion plan is included
in the above ranges.

Restructuring
During the nine months ended September 30, 2004, we made payments of $75 million
related to employee  severance  and  termination  costs and $20 million in other
exit costs resulting from restructuring  actions.  We expect additional payments
to range  from $15  million to $20  million  in the  fourth  quarter of 2004 for
actions taken in 2001, 2002 and 2003.

Key Balance Sheet Data
At September 30, 2004, cash, cash equivalents and short-term investments totaled
$1.7 billion,  compared with $1.3 billion at December 31, 2003. The increase was
primarily due to cash proceeds received from the issuance of the $400 million of
senior unsecured notes, cash provided by operating  activities and proceeds from
divestitures,  offset by  repurchases  of  long-term  debt and capital  spending
during the nine months ended September 30, 2004.




Balance sheet and working capital measures are provided in the following table (dollars in millions):
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                    September 30, 2004       December 31, 2003
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                           
Working capital                                                          $  1,340                $  1,141
Working capital, excluding cash and short-term investments               $  (399)                $  (125)
Current ratio                                                               1.8:1                   1.7:1
Trade accounts receivable, net of allowances                             $    538                $    525
Days sales outstanding                                                         48                      58
Inventories                                                              $    498                $    467
Inventory turns                                                               4.8                     4.8
Days payable outstanding                                                       73                      52
Long-term debt                                                           $  2,438                $  2,668
Total debt to total capital                                                   42%                     34%
- ------------------------------------------------------------------------------------------------------------------------------------


Credit Ratings
Our credit  ratings were updated from those  disclosed in the 2003 Annual Report
on Form 10-K as follows:
- --------------------------------------------------------------------------------
RATING AGENCY                     Rating                         Outlook
Last Update                   Long-Term Debt                   Last Update
- --------------------------------------------------------------------------------

Fitch                               BB+                         Positive
    August 12, 2004                                          August 12, 2004

Standard & Poor's                   BB+                          Stable
    July 29, 2002                                           January 16, 2004

Moody's                             Ba2                          Stable
    July 29, 2002                                           November 19, 2003
- --------------------------------------------------------------------------------

Management Assessment of Liquidity
Our major source of funding for 2004 and beyond will be our existing  balance of
cash, cash equivalents and short-term investments. From time to time we may also
issue debt or equity  securities to raise  additional  cash to fund a portion of
our capital  expenditures  related to our growth businesses.  We believe we have
sufficient   liquidity   for  the  next  several   years  to  fund   operations,
restructuring,  the  asbestos  settlement,  research  and  development,  capital
expenditures and scheduled debt repayments.

Contractual Obligations
There have been no material  changes  outside the ordinary course of business in
the  contractual  obligations  disclosed in our 2003 Annual  Report on Form 10-K
under the caption "Contractual Obligations."

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The preparation of financial  statements  requires  management to make estimates
and  assumptions  that affect  amounts  reported  therein.  The  estimates  that
required us to make  difficult,  subjective  or complex  judgments  in the third
quarter  of 2004  follow.  Refer  to our 2003  Annual  Report  on Form  10-K for
additional   significant   estimates  used  in  the   preparation  of  financial
statements.


Impairment of goodwill

SFAS 142 requires us to make certain difficult, subjective and complex judgments
on a number of matters,  including  assumptions  and estimates used to determine
the fair value of our reporting unites; which are the same as our segments.

We measure fair value on the basis of discounted expected future cash flows. Our
estimates are based upon our historical  experience,  our current knowledge from
our commercial  relationships,  and available external  information about future
trends.

Pricing in the telecommunications industry remains depressed as the industry has
failed to reduce capacity.  Our previous forecasts assumed some  rationalization
of capacity  that would lead to more stable  pricing.  We now expect the current
depressed  pricing  conditions to persist.  Based on competitive  conditions and
forecasted  future customer  requirements,  we do not expect the level of demand
for  premium  fiber  products we  previously  forecasted.  As a result,  we have
significantly  reduced  our outlook for future  revenue and  profitability  from
premium  products.  As we forecast  customer demand, we have lowered the rate of
volume  growth  in  the  longer  range.  Further  negative  developments  in the
telecommunications  industry  could cause us to change our  forecasts  for fiber
volumes,  pricing or mix of  premium  products  which may  result in  additional
goodwill impairment charges of up to $117 million.

Terminal value of the business  assumes a growth in perpetuity of 3%. These cash
flows are also used to value  intangible and tangible assets which determine the
implied  value of reporting  unit  goodwill.  The discount rate applied to these
cash flows  represents  a  telecommunications  weighted  average cost of capital
based upon current debt and equity activity of 11 public companies  representing
a cross section of worldwide  competitors  of the reporting  unit. For our third
quarter 2004 interim test,  we used a discount rate of 12.5% in our  calculation
of fair value of the expected future cash flows. An impairment  charge of $1,420
million was recorded in the third  quarter of 2004.  Had we used a discount rate
of 12%, the impairment  charge would have been  approximately $90 million lower.
Had we used a  discount  rate of 13%,  the  impairment  charge  would  have been
approximately  $80 million higher.  In 2003, we used a 12% discount rate for our
annual impairment test. The results of our 2003 test indicated that goodwill was
not  impaired.  The 2003  results  would not have changed had we used a discount
rate of 11.5% or 12.5%.

Valuation allowance for deferred income taxes

SFAS 109 requires us to exercise  judgment about our future results in assessing
the realizability of our deferred tax assets. At September 30, 2004, Corning had
gross deferred tax assets of approximately $2.2 billion.  We determined that the
likelihood of  realization  of certain  deferred tax assets is less than 50% and
recorded  additional  valuation  allowances  of $1.2  billion.  If we sustain an
appropriate level of profitability,  primarily in the U.S. and Germany, or if we
are able to develop additional tax-planning strategies, or if the PCC settlement
is finalized earlier than we anticipate, adjustments to these allowances will be
required may affect future net income.

In  determining  the amount of domestic  deferred tax assets that we believe are
more likely than not to be realized  through a tax planning  strategy  involving
the sale of a non-strategic asset, we estimated the fair value of the underlying
non-strategic  asset based  primarily  on  discounted  cash flows and  precedent
transactions.  Changes in fair value of the non-strategic  asset may also affect
future net income.

See  (Provision)  Benefit  for  Income  Taxes  and  Note 9 to  the  consolidated
financial statements for additional information.


ENVIRONMENT

We have been named by the  Environmental  Protection  Agency under the Superfund
Act,  or by  state  governments  under  similar  state  laws,  as a  potentially
responsible party for 11 active hazardous waste sites.  Under the Superfund Act,
all  parties  who may have  contributed  any waste to a  hazardous  waste  site,
identified  by such  Agency,  are jointly and  severally  liable for the cost of
cleanup unless the Agency agrees  otherwise.  It is our policy to accrue for the
estimated   liability  related  to  Superfund  sites  and  other   environmental
liabilities  related  to  property  owned  and  operated  by us based on  expert
analysis and continual monitoring by both internal and external consultants.  We
have  accrued   approximately  $20  million  for  the  estimated  liability  for
environmental  cleanup and related  litigation at September 30, 2004. Based upon
the  information  developed  to date,  we believe  that the accrued  amount is a
reasonable  estimate of our liability and that the risk of an additional loss in
an amount materially higher than that accrued is remote.

FORWARD-LOOKING STATEMENTS

The  statements in this Quarterly  Report on Form 10-Q, in reports  subsequently
filed by Corning with the Securities and Exchange Commission (SEC) on Forms 8-K,
and related comments by management which are not historical facts or information
and contain words such as  "believes,"  "expects,"  "anticipates,"  "estimates,"
"forecasts,"  and similar  expressions  are  forward-looking  statements.  These
forward-looking  statements  involve risks and uncertainties  that may cause the
actual outcome to be materially different. Such risks and uncertainties include,
but are not limited to:

- -    global economic and political conditions;
- -    tariffs, import duties and currency fluctuations;
- -    product demand and industry capacity;
- -    competitive products and pricing;
- -    sufficiency of manufacturing capacity and efficiencies;
- -    availability and costs of critical components and materials;
- -    new product development and commercialization;
- -    order activity and demand from major customers;
- -    fluctuations in capital spending by customers;
- -    possible  disruption in commercial  activities  due to terrorist  activity,
     armed conflict, political instability or major health concerns;
- -    facility expansions and new plant start-up costs;
- -    effect of regulatory and legal developments;
- -    capital resource and cash flow activities;
- -    ability to pace capital spending to anticipated  levels of customer demand,
     which may fluctuate;
- -    equity company activities;
- -    interest costs;
- -    credit rating and ability to obtain  financing and capital on  commercially
     reasonable terms;
- -    adequacy and availability of insurance;
- -    financial risk management;
- -    acquisition and divestiture activities;
- -    level of excess or obsolete inventory;
- -    ability to enforce patents;
- -    adverse litigation;
- -    product and components performance issues;
- -    stock price fluctuations;
- -    the  rate  of  substitution  by  end-users  purchasing  LCDs  for  notebook
     computers, desktop monitors and televisions;
- -    a downturn in demand for LCD glass substrates;
- -    ability of our customers, most notably in the Display Technologies segment,
     to  maintain  profitable  operations  and  obtain  financing  to fund their
     manufacturing expansions;
- -    fluctuations in inventory levels in the supply chain;
- -    equity  company  activities,  principally  at Dow Corning  Corporation  and
     Samsung Corning Co., Ltd.; and
- -    other risks detailed in Corning's SEC filings.







Risk Factors

Set forth below and elsewhere in this Quarterly Report on Form 10-Q and in other
documents we file with the SEC are some of the principal risks and uncertainties
that could  cause our actual  business  results  to differ  materially  from any
forward-looking  statements  or other  projections  contained in this  Quarterly
Report on Form 10-Q. In addition, future results could be materially affected by
general  industry and market  conditions,  changes in laws or accounting  rules,
general U.S. and non-U.S. economic and political conditions,  including a global
economic  slowdown,  fluctuation of interest rates or currency  exchange  rates,
terrorism, political unrest or international conflicts, political instability or
major  health  concerns,  natural  disasters  or other  disruptions  of expected
economic and business  conditions.  These risk factors  should be  considered in
addition to our cautionary  comments  concerning  forward-looking  statements in
this Quarterly Report on Form 10-Q,  including statements related to markets for
our  products  and  trends in our  business  that  involve a number of risks and
uncertainties.  Our separate statement labeled Forward-Looking Statements should
be considered in addition to the statements below.

Our  sales  could be  negatively  impacted  if one or more of our key  customers
substantially reduce orders for our products

     Our customer base is relatively  concentrated with less than 10 significant
customers  accounting for a high  percentage  (greater than 50%) of net sales in
most of our  businesses,  including  those  purchasing  LCD glass.  However,  no
individual customer accounts for more than 10% of consolidated sales.

     Our Display  Technologies,  Environmental  Technologies,  and Life Sciences
segments have concentrated  customer bases. If we lose a significant customer in
any of these businesses,  or if one or more significant customers reduce orders,
our  sales  could be  negatively  impacted.  The  Display  Technologies  segment
manufactures  and  sells  glass  substrates  to  a  concentrated  customer  base
comprised of LCD panel makers primarily located in Japan and Taiwan.  LCD panels
are used in computer products,  such as notebook computers and desktop monitors,
consumer  electronics  products,  such as digital cameras and camcorders and car
navigation systems, and LCD televisions. For the nine months ended September 30,
2004, six LCD customers  accounted for 78% of the Display  Technologies  segment
sales. In addition,  Samsung Corning  Precision's sales were also  concentrated,
with two customers  accounting 84% of sales for the nine months ended  September
30, 2004.

     Although the sale of LCD glass  substrates  has  increased  from quarter to
quarter in 2004, there can be no assurance that this upward trend will continue.
Our customers are LCD panel makers, and as they switch to larger size glass, the
pace of their  orders  may be  uneven  while  they  adjust  their  manufacturing
processes  and  facilities.  Additionally,  consumer  preferences  for panels of
differing sizes, or price or other factors,  may lead to pauses in market growth
from time to time.  There is further risk that our  customers may not be able to
maintain  profitable  operations  or access  sufficient  capital to fund ongoing
expansions.

     In the Environmental  Technologies segment,  sales of our ceramic substrate
and filter  technologies for gasoline and diesel emissions and pollution control
fluctuate  with our customers'  production  and sales of  automobiles  and other
vehicles,  as well as  changes  in  governmental  laws and  regulations  for air
quality and emission controls.  Sales in our Life Sciences segment are primarily
through  two large  distributors  to  government  entities,  pharmaceutical  and
biotechnology companies, hospitals, universities and other laboratories, and any
changes in distribution could impact our future sales.

     Our  Telecommunications  segment  customers'  purchases of our products are
affected  by general  market and  economic  uncertainty,  government  regulatory
changes and the June 2004 Chinese Ministry preliminary  determination of dumping
of certain U.S.  optical  fiber  exports to China.  For the third  quarter ended
September  30,  2004,  one  customer  accounted  for  approximately  17%  of our
Telecommunications  segment sales,  and 10 customers  accounted for 51% of total
segment sales.







If we do not  successfully  adjust  our  manufacturing  volumes  and fixed  cost
structure,  or achieve  manufacturing  yields or sufficient product reliability,
our operating results could suffer, and we may not achieve  profitability levels
anticipated

     We are investing  heavily in additional  manufacturing  capacity of certain
businesses,  including  nearly $800 million in 2004 to expand our liquid crystal
display  glass  facilities  in response  to  anticipated  increases  in customer
demand. The speed of constructing the new facilities presents challenges. We may
face technical and process issues in moving to commercial  production  capacity.
There  can be no  assurance  that  Corning  will be able  to pace  its  capacity
expansion to the actual  demand.  While the industry  has grown  rapidly,  it is
possible that glass  manufacturing  capacity may exceed  customer  demand during
certain periods.

     The  manufacturing  of our  products  involves  highly  complex and precise
processes, requiring production in highly controlled and clean environments. Any
changes  in  our  manufacturing  processes  or  those  of  our  suppliers  could
significantly reduce our manufacturing  yields and product reliability.  In some
cases,  existing  manufacturing  may be  insufficient  to achieve  the volume or
requirements  of our  customers.  We will  need  to  develop  new  manufacturing
processes and  techniques to achieve  targeted  volume,  pricing and cost levels
that will permit  profitable  operations.  While we continue to fund projects to
improve  our  manufacturing   techniques  and  processes,  we  may  not  achieve
satisfactory cost levels in our manufacturing activities that will fully satisfy
our yield and margin targets.

We have incurred, and may in the future incur,  restructuring and other charges,
the amounts of which are difficult to predict accurately

     As  a  result  of a  severe  decline  in  the  telecommunications  industry
beginning in 2001, we have  recorded  charges for  restructuring,  impairment of
assets,  and the  write-off  of cost and equity based  investments  in the third
quarter of 2004.

     It is possible we may record additional  charges for restructuring or other
asset  impairments if additional  actions  become  necessary to align costs to a
reduced  level of  demand,  or  respond  to  increased  competition,  regulatory
actions, or other factors impacting our businesses.

If the  markets for our  products  do not  develop and expand as we  anticipate,
demand for our products may decline further,  which would negatively  impact our
results of operations and financial performance

     The  markets  for  our  products  are  characterized  by  rapidly  changing
technologies,  evolving industry  government  standards and frequent new product
introductions.  Our success is expected to depend,  in substantial  part, on the
timely and successful introduction of new products, upgrades of current products
to comply with emerging industry  government  standards,  our ability to acquire
technologies  needed to remain  competitive and our ability to address competing
technologies  and products.  In addition,  the following  factors related to our
products and the markets for them, if not achieved, could have an adverse impact
on our results of operations and financial performance:

     .    our ability to introduce leading products such as glass substrates for
          liquid crystal  displays,  optical fiber and  environmental  substrate
          products that can command competitive prices in the marketplace;
     .    our  ability to  maintain  or achieve a  favorable  sales mix of large
          generation sizes of display glass;
     .    our ability to  continue  to develop new product  lines to address our
          customers'  diverse needs within the several  market  segments that we
          participate in, which requires a high level of innovation,  as well as
          the accurate anticipation of technological and market trends;
     .    our  ability  to  develop  new   products  in  response  to  favorable
          government regulations and laws driving customer demand,  particularly
          environmental  substrate  diesel filter products in the  Environmental
          Technologies   segment   and   Telecommunications   segment   products
          associated with fiber-to-the-premises;
     .    our  ability  to  create  the   infrastructure   required  to  support
          anticipated growth in certain businesses:
     .    continued strong demand for notebook computers;
     .    the rate of  substitution  by  end-users  purchasing  LCD  monitors to
          replace cathode ray tube monitors;
     .    the rate of growth in purchases of LCD  televisions  to replace  other
          technologies;
     .    fluctuations  in  inventory  levels in the supply  chain of  LCD-based
          consumer electronics; or
     .    the rate of growth  of the  fiber-to-the-premises  build-out  in North
          America.







We face pricing pressures in each of our leading businesses that could adversely
affect our results of operations and financial performance

     We periodically face pricing pressures in each of our leading businesses as
a result of intense  competition,  emerging new technologies,  or over-capacity.
While we will work toward reducing our costs to respond to the pricing pressures
that may  continue,  we may not be able to achieve  proportionate  reductions in
costs.  As a result  of  overcapacity  and the  current  economic  and  industry
downturn in the Telecommunications segment, pricing pressures continued in 2004,
particularly  in our optical fiber and cable  products.  We  anticipate  pricing
pressures  will continue  into 2005 and beyond.  Increased  pricing  pressure is
possible in our Display  Technologies  segment as our customers strive to reduce
their costs.

We have  incurred,  and may in the future incur,  goodwill and other  intangible
asset impairment charges

     At September 30, 2004, Corning had goodwill of $276 million (including $117
million related to the Telecommunications  segment). During the third quarter of
2004,  we  recorded  a  $1,420  million  impairment  charge  to  write-down  the
Telecommunications segment goodwill balance to its estimated fair value.

     While we believe the estimates  and judgments  about future cash flows used
in the goodwill  impairment  tests are reasonable,  we cannot provide  assurance
that future  impairment  charges will not be required if the expected  cash flow
estimates  as  projected  by  management  do not occur or change based on market
conditions.

We may be limited in our ability to obtain  additional  capital on  commercially
reasonable terms

     Although we believe  existing cash,  short-term  investments  and borrowing
capacity,  collectively,  provide adequate  resources to fund ongoing  operating
requirements,  we may be  required  to  seek  additional  financing  to  compete
effectively in our markets.  Our public debt ratings affect our ability to raise
capital and the cost of such  capital.  In July 2002,  our credit  ratings  were
downgraded to below investment  grade. Our ratings as of September 30, 2004 were
BB+ from both Fitch and Standard & Poor's and Ba2 from Moody's.  Any  downgrades
may  increase  our  borrowing  costs and affect  our  ability to access the debt
capital markets.

     As a result of our lower  debt  ratings,  we may face  difficulties  in our
business.  For  example,  we may  face  increasing  requirements  to  post  cash
collateral  for  performance  bonds  and some  customers  may  seek  alternative
suppliers.

     We are subject  under our  revolving  credit  facility  to a covenant  that
requires us to maintain a ratio of total debt to capital,  as defined  under the
credit  facility,  of not greater than 60%. Our total debt to capital  ratio was
42% at September 30, 2004.  This covenant may limit our ability to borrow funds.
Future losses or significant charges could materially increase our total debt to
capital  ratio  which may  reduce the  amounts  we are able to borrow  under the
revolving credit facility.

If  our  products  or  components   purchased  from  our  suppliers   experience
performance issues, our business will suffer

     Our  business   depends  on  the   production  of  excellent   products  of
consistently  high  quality.  To this end, our  products,  including  components
purchased  from  our  suppliers,  are  tested  for  quality  both  by us and our
customers.  Nevertheless,  our products are highly  complex,  and our customers'
testing  procedures  are limited to  evaluating  our  products  under likely and
foreseeable failure scenarios. For various reasons (including, among others, the
occurrence of performance problems  unforeseeable in testing),  our products and
components  purchased  from our  suppliers  may  fail to  perform  as  expected.
Performance  issues could result from faulty design or problems in manufacturing
or testing.  We have experienced such performance  issues in the past and remain
exposed  to  such  performance  issues.  In some  cases,  product  redesigns  or
additional  capital  equipment may be required to correct a defect. In addition,
any significant or systemic  product failure could result in customer  relations
problems and harm the future sales of our products.







Interruptions  of  supplies  from our key  suppliers  may affect our  results of
operations and financial performance

     Interruptions  of supplies from our key suppliers could disrupt  production
or impact our ability to increase production and sales. We do not have long-term
or volume purchase agreements with every supplier,  and may have limited options
for alternative supply if these suppliers fail, for any reason,  including their
business  failure  or  financial   difficulties,   to  continue  the  supply  of
components.

We face intense competition in most of our businesses

     We  expect  that  we  will  face  additional   competition   from  existing
competitors  and new  entrants.  Because some of the markets in which we compete
have been  historically  characterized by rapid growth and are  characterized by
rapid technology  changes,  smaller niche and start-up  companies may become our
principal competitors in the future. We must invest in research and development,
expand our engineering,  manufacturing and marketing capabilities,  and continue
to improve  customer  service  and  support in order to remain  competitive.  We
cannot  assure you that we will be able to maintain  or improve our  competitive
position.

We may experience difficulties in enforcing our intellectual property rights and
we may be subject to claims of infringement of the intellectual  property rights
of others

     We may encounter  difficulties  in  protecting  our  intellectual  property
rights or obtaining  rights to  additional  intellectual  property  necessary to
permit us to continue or expand our  businesses.  We cannot  assure you that the
patents that we hold or may obtain will provide  meaningful  protection  against
our  competitors  or  competitive  technologies.  Litigation may be necessary to
enforce our intellectual  property  rights,  to protect our trade secrets and to
determine  the  validity  and scope of our  proprietary  rights.  Litigation  is
inherently  uncertain and the outcome is often  unpredictable.  Other  companies
hold patents on technologies used in our industries and are aggressively seeking
to expand, enforce and license their patent portfolios.

     The  intellectual  property  rights of others could  inhibit our ability to
introduce new products.  We are, and may in the future be,  subject to claims of
intellectual  property  infringement or misappropriation that may result in loss
of revenue or require us to incur substantial  costs. We cannot assure you as to
the outcome of such claims.

Current or future  litigation  may harm our  financial  condition  or results of
operations

     Pending,   threatened   or  future   litigation   is  subject  to  inherent
uncertainties. Our financial condition or results of operations may be adversely
affected by unfavorable outcomes, expenses and costs exceeding amounts estimated
or  insured.  In  particular,  we have been  named as a  defendant  in  numerous
lawsuits  against PCC and several other  defendants  involving  claims  alleging
personal  injury from exposure to asbestos.  As described in Legal  Proceedings,
our negotiations with the  representatives of asbestos claimants have produced a
tentative settlement,  but certain cases may still be litigated.  Final approval
of a global settlement through the PCC bankruptcy process may impact the results
of operations for the period in which such costs, if any, are recognized.  Total
charges of $429 million have been incurred through September 30, 2004;  however,
the final settlement value will be dependent on the price of our common stock at
the time it is contributed to the settlement  trust.  Management  cannot provide
assurances  that the  ultimate  outcome of a settlement  will not be  materially
different from the amount recorded to date.







We face risks related to our international operations and sales

     We have customers and significant  operations,  including manufacturing and
sales,  located  outside the U.S.  We have large  manufacturing  operations  for
liquid crystal display glass  substrates in the Asia-Pacific  region,  including
equity  investments  in  companies  operating  in South  Korea that make  liquid
crystal display glass and in China that make  telecommunications  products,  and
several  significant  customers are located in this region. As a result of these
and other international operations, we face a number of risks, including:

     .    major health concerns such as SARS;
     .    difficulty of effectively managing our diverse global operations;
     .    change in regulatory requirements;
     .    tariffs, duties and other trade barriers including anti-dumping duties
          as in  the  pending  China  proceedings  (Refer  to  Part  II -  Other
          Information, Item 1. Legal Proceedings for additional information);
     .    undeveloped legal systems; and
     .    political and economic instability in foreign markets.

We face risks through our equity method  investments in companies that we do not
control

     Dow Corning Corporation (which makes silicone products) and Samsung Corning
Precision  Glass Co.,  Ltd.  (which makes liquid  crystal  display  glass),  two
companies in which we have a 50% ownership  interest,  have  contributed  to our
earnings by recognition of a share of their earnings.  For the nine months ended
September  30,  2004,  we have  recognized  $310  million  of  equity  earnings,
primarily from these two companies.  Samsung Corning Precision is located in the
Asia-Pacific  region and, as such, is subject to those geographic risks referred
to above.  With 50% or lower ownership,  we do not control such equity companies
nor their management and operations.  Performance of our equity  investments may
not  continue at the same  levels in the  future.  During  2003,  we  recognized
charges  associated  with  Samsung  Corning  Co.,  Ltd.  (our 50% equity  method
investment  that makes glass panels and funnels for  conventional  televisions),
which recorded significant fixed asset impairment charges.  During 2004, we have
recognized  charges  associated  with Dow Corning  Corporation,  which  recorded
charges for restructuring actions and bankruptcy related settlement  activities.
It is possible that future  earnings could be negatively  impacted by additional
charges recorded by our equity method investments.

We face risks due to foreign currency fluctuations

     Because we have  significant  customers  and  operations  outside the U.S.,
fluctuations in foreign  currencies affect our sales and profit levels.  Foreign
exchange rates may make our products less  competitive in countries  where local
currencies  decline in value  relative to the dollar.  These  currency risks may
increase as our sales outside the U.S. grow.

If the  financial  condition of our customers  declines,  our credit risks could
increase

     In  2002  and  2003,  certain  of  our  customers   experienced   financial
difficulties, and some filed with the courts seeking protection under bankruptcy
or reorganization  laws. We have experienced,  and in the future may experience,
losses as a result of our inability to collect our accounts receivable,  as well
as the loss of such customer's  ongoing business.  If our customers fail to meet
their payment obligations to us, including deposits due under long-term purchase
and supply agreements in our Display  Technologies  segment, we could experience
reduced cash flows and losses in excess of amounts reserved. As of September 30,
2004, reserves for trade receivables totaled approximately $36 million.








We may not have adequate insurance coverage for claims against us

     We face the risk of loss resulting from, and adverse  publicity  associated
with, product liability, securities, fiduciary liability, intellectual property,
antitrust, contractual,  warranty, fraud and other lawsuits, whether or not such
claims are valid. In addition, our product liability,  fiduciary,  directors and
officers,  property and  comprehensive  general  liability  insurance may not be
adequate to cover such claims or may not be  available  to the extent we expect.
Our insurance costs have increased  substantially and may increase  further.  We
may not be able to get adequate  insurance  coverage in the future at acceptable
costs.  A successful  claim that exceeds or is not covered by our policy  limits
could require us to pay  substantial  sums. Some of the carriers in our historic
excess  insurance  program are not rated,  or may have lower ratings,  or are in
liquidation  and may not be able to respond if we should  have  claims  reaching
into excess layers.  In addition,  we may not be able to insure against  certain
risks or obtain some types of insurance, such as terrorism or war insurance.








ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market Risk Disclosures

There have been no material changes to our market risk exposure during the first
nine months of 2004.  For a discussion of our exposure to market risk,  refer to
Item 7A, Quantitative and Qualitative  Disclosures About Market Risks, contained
in our 2003 Annual Report on Form 10-K.


ITEM 4.  CONTROLS AND PROCEDURES

The  Company  carried  out an  evaluation,  under the  supervision  and with the
participation  of  the  Company's  management,  including  the  Company's  chief
executive officer and its chief financial  officer,  of the effectiveness of the
design and operation of the Company's  disclosure  controls and procedures as of
September 30, 2004, the end of the period covered by this report. Based upon the
evaluation,  the chief executive  officer and chief financial  officer concluded
that as of the evaluation date, the Company's disclosure controls and procedures
are effective to ensure that information required to be disclosed by the Company
in  reports  that it  files or  submits  under  the  Exchange  Act is  recorded,
processed,  summarized  and  reported  within  the  time  periods  specified  in
Securities and Exchange Commission rules and forms.

During the fiscal quarter ended September 30, 2004,  there has been no change in
our internal control over financial reporting that has materially affected or is
reasonably  likely to materially  affect,  our internal  control over  financial
reporting.







                           Part II - Other Information

ITEM 1.  LEGAL PROCEEDINGS

Environmental Litigation. Corning has been named by the Environmental Protection
Agency under the  Superfund  Act, or by state  governments  under  similar state
laws, as a potentially  responsible  party at 11 active  hazardous  waste sites.
Under the  Superfund  Act, all parties who may have  contributed  any waste to a
hazardous  waste site,  identified  by such  Agency,  are jointly and  severally
liable  for the cost of  cleanup  unless  the  Agency  agrees  otherwise.  It is
Corning's  policy to accrue for its  estimated  liability  related to  Superfund
sites and other  environmental  liabilities related to property owned by Corning
based on expert analysis and continual  monitoring by both internal and external
consultants.  Corning has accrued  approximately  $20 million for its  estimated
liability for environmental  cleanup and litigation at September 30, 2004. Based
upon the  information  developed to date,  management  believes that the accrued
reserve is a reasonable  estimate of the Company's  estimated liability and that
the risk of an additional loss in an amount  materially higher than that accrued
is remote.

Schwinger and Stevens  Toxins  Lawsuits.  In April 2002,  Corning was named as a
defendant in two actions,  Schwinger  and  Stevens,  filed in the U.S.  District
Court for the Eastern  District of New York,  which  asserted  various  personal
injury and property  damage  claims  against a number of  corporate  defendants.
These  claims  allegedly  arise  from the  release  of toxic  substances  from a
Sylvania  nuclear  materials  processing  facility  near  Hicksville,  New York.
Amended  complaints  naming 205 plaintiffs  and seeking  damages in excess of $3
billion  were served in  September  2002.  The sole basis of  liability  against
Corning was plaintiffs' claim that Corning was the successor to Sylvania-Corning
Nuclear  Corporation,  a Delaware  corporation  formed in 1957 and  dissolved in
1960.  Management  intends to vigorously  contest all claims against Corning for
the reason that  Corning is not the  successor to  Sylvania-Corning.  Management
will also defend on the grounds that almost all of the wrongful death claims and
personal injury claims are time-barred. At a status conference in December 2002,
the Court  decided to  "administratively  close" the Schwinger and Stevens cases
and  ordered   plaintiffs'   counsel  to  bring  new  amended   complaints  with
"bellwether" plaintiffs. In these actions, known as Schwinger II and Astuto, the
plaintiffs  have not named  Corning as a  defendant.  Although  it appears  that
plaintiffs may proceed only against the other corporate defendants, the original
Schwinger  and  Stevens  cases  remain  pending  and no order  has been  entered
dismissing  Corning.   Based  upon  the  information   developed  to  date,  and
recognizing  that the outcome of litigation is  uncertain,  management  believes
that the  likelihood  of a  materially  adverse  impact to  Corning's  financial
statements is remote.

Dow  Corning  Bankruptcy.  Corning and Dow  Chemical  each own 50% of the common
stock of Dow Corning, which has been in reorganization proceedings under Chapter
11 of the U.S.  Bankruptcy Code since May 1995. Dow Corning filed for bankruptcy
protection to address pending and claimed liabilities arising from many thousand
breast-implant product lawsuits each of which typically sought damages in excess
of one million dollars.  On November 8, 1998, Dow Corning and the Tort Claimants
Committee  jointly  filed a revised  Plan of  Reorganization  (Joint Plan) which
provided for the settlement or other resolution of implant claims.  After review
and approvals by the Bankruptcy Court and the U.S. District Court of the Eastern
District of Michigan, and an appeal, the District Court on April 2, 2004 entered
an order establishing June 1, 2004 as the effective date of the Joint Plan.

Under the terms of the Joint Plan, Dow Corning will establish a Settlement Trust
and a  Litigation  Facility to provide a means for tort  claimants  to settle or
litigate their claims.  Dow Corning has the obligation to fund the Trust and the
Facility, over a period of up to 16 years, in an amount up to approximately $3.3
billion,  subject to the limitations,  terms and conditions  stated in the Joint
Plan.  Corning and Dow Chemical have each agreed to provide a credit facility to
Dow Corning of up to $150 million  ($300 million in the  aggregate),  subject to
the terms and  conditions  stated in the Joint  Plan.  As  required by the Joint
Plan,  Dow  Corning  has fully  satisfied  (or  reserved  for) the claims of its
commercial  creditors in accordance with a March 31, 2004 ruling of the District
Court determining the amount of pendency interest allowed on the $810 million in
principal  owing on such  claims.  In the second  quarter of 2004,  Dow  Corning
recorded a $47 million adjustment to its interest  liabilities  relating to this
matter, of which Corning  recognized $14 million reflected in its second quarter
equity earnings.  Certain commercial creditors have appealed from that ruling to
the U.S.  Court of  Appeals of the Sixth  Circuit  seeking  from Dow  Corning an
additional sum of  approximately  $100 million for interest at default rates and
enforcement costs. Corning believes the risk of loss to Dow Corning (net of sums
reserved) is remote.







In 1995,  Corning  fully  impaired its  investment in Dow Corning upon its entry
into  bankruptcy  proceedings  and did not  recognize  equity  earnings from the
second quarter of 1995 through the end of 2002. Corning began recognizing equity
earnings  in the  first  quarter  of 2003  when  management  concluded  that its
emergence  from  bankruptcy  protection  was  probable.  Corning  considers  the
difference  between the carrying  value of its investment in Dow Corning and its
50% share of Dow  Corning's  equity to be  permanent.  This  difference  is $249
million. Subject to future rulings by the bankruptcy court and potential changes
in estimated bankruptcy-related liabilities, it is possible that Dow Corning may
record bankruptcy-related charges in the future.

Corning received no dividends from Dow Corning in 2003 or in 2004 to date.

The Joint Plan includes releases for Corning and Dow Chemical as shareholders in
exchange  for  contributions  to the Joint  Plan.  Although  claims  against the
shareholders  were included in several thousand state and federal lawsuits filed
pre-bankruptcy,  alleging  injuries arising from Dow Corning's implant products,
Corning  was awarded  summary  judgment  in federal  court and in several  state
jurisdictions.  The remaining  claims  against  Corning will be channeled by the
Joint Plan into facilities  established by the Joint Plan.  Management  believes
that the  likelihood  of a  materially  adverse  impact to  Corning's  financial
standards arising from these remaining shareholder claims is remote.

Federal Securities Cases. A federal securities class action lawsuit was filed in
1992 against Corning and certain individual  defendants by a class of purchasers
of Corning stock who allege  misrepresentations  and omissions of material facts
relative to the silicone gel breast implant  business  conducted by Dow Corning.
This action is pending in the U.S.  District Court for the Southern  District of
New York. The class consists of those  purchasers of Corning stock in the period
from June 14, 1989 to January 13,  1992,  who  allegedly  purchased  at inflated
prices due to the  non-disclosure  or  concealment of material  information.  No
amount of damages is specified in the complaint.  In 1997,  the Court  dismissed
the individual  defendants  from the case. In June 2003,  Corning filed a motion
for  summary  judgment.  Corning  intends  to  continue  to defend  this  action
vigorously.  Based upon the information  developed to date and recognizing  that
the outcome of litigation is uncertain,  management believes that the likelihood
of a materially adverse impact to Corning's financial statements is remote.

From  December  2001 through  April 2002,  Corning and three of its officers and
directors  were named  defendants  in lawsuits  alleging  violations of the U.S.
securities  laws in  connection  with  Corning's  November  2000  offering of 30
million  shares  of  common  stock  and $2.7  billion  zero  coupon  convertible
debentures,  due  November  2015.  In  addition,  the Company and the same three
officers and directors were named in lawsuits  alleging  misleading  disclosures
and non-disclosures  that allegedly inflated the price of Corning's common stock
in the period from October 2000 through July 9, 2001.  The  plaintiffs  in these
actions seek to represent  classes of  purchasers  of Corning's  stock in all or
part of the period indicated.  On August 2, 2002, the U.S. District Court of the
Western  District of New York entered an order  consolidating  these actions for
all  purposes,  designating  lead  plaintiffs  and lead  counsel,  and directing
service of a consolidated complaint. The consolidated amended complaint requests
substantial  damages in an unspecified amount to be proved at trial. In February
2003,  defendants  filed a motion to dismiss the complaint for failure to allege
the  requisite  elements  of the  claims  with  particularity.  The Court  heard
arguments on May 29 and June 9, 2003 and on April 9, 2004 entered a Decision and
Order dismissing the complaint. In May 2004, Plaintiffs filed a notice of appeal
to the U.S.  Court of Appeals  of the Second  Circuit.  Plaintiffs  filed  their
appellate  brief on August 30, 2004.  Defendants  filed their appellate brief on
October 13,  2004.  Oral  argument  has not yet been  scheduled.  Management  is
prepared to defend these lawsuits  vigorously.  Recognizing  that the outcome of
litigation is uncertain, management believes that the likelihood of a materially
adverse impact to Corning's financial  statements,  net of applicable insurance,
is remote.







Pittsburgh Corning  Corporation.  Corning and PPG Industries,  Inc. ("PPG") each
own 50% of the capital stock of 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. As of the bankruptcy filing, PCC had in excess
of 140,000 open claims and had  insufficient  remaining  insurance and assets to
deal  with its  alleged  current  and  future  liabilities.  More  than  100,000
additional  claims have been filed with PCC after its bankruptcy  filing. At the
time PCC filed for bankruptcy protection, there were approximately 12,400 claims
pending against  Corning in state court lawsuits  alleging  various  theories of
liability based on exposure to PCC's 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
PCC's asbestos products. Corning is also currently named in approximately 11,300
other cases  (approximately  42,800 claims) alleging  injuries from asbestos and
similar amounts of monetary damages per claim.  Those cases have been covered by
insurance  without  material impact to Corning to date.  Asbestos  litigation is
inherently  difficult,  and past  trends in  resolving  these  claims may not be
indicators of future outcomes.

In the  bankruptcy  court,  PCC in April 2000 obtained a preliminary  injunction
against the prosecution of asbestos  actions arising from PCC's products against
its two  shareholders  to afford  the  parties a period of time (the  Injunction
Period) in which to negotiate a plan of reorganization for PCC ("PCC Plan").

On May 14, 2002,  PPG announced that it had agreed with certain of its insurance
carriers and  representatives  of current and future  asbestos  claimants on the
terms of a  settlement  arrangement  applicable  to claims  arising  from  PCC's
products.  On  March  28,  2003,  Corning  announced  that it had  also  reached
agreement with  representatives  of current and future  asbestos  claimants on a
settlement  arrangement  that  will be  incorporated  into  the PCC  Plan.  This
settlement is subject to a number of  contingencies,  including  approval by the
bankruptcy court.  Corning's settlement will require the contribution,  when the
Plan becomes  effective,  of its equity  interest in PCC,  its  one-half  equity
interest in PCE, and 25 million  shares of Corning  common  stock.  Corning also
will be making cash  payments of $142 million (net present value as of September
30, 2004) in six installments beginning one year after the Plan is effective. In
addition,  Corning will assign policy rights or proceeds under primary insurance
from 1962  through  1984,  as well as rights to proceeds  under  certain  excess
insurance,  most of which falls  within the period from 1962  through  1973.  In
return for these  contributions,  Corning  expects  to receive a release  and an
injunction  channeling  asbestos claims against it into a settlement trust under
the PCC Plan.

Corning  recorded an initial  charge of $298 million in the period  ending March
31, 2003 to reflect the settlement terms.  However, the amount of the charge for
this  settlement  requires  adjustment  each  quarter  based  upon  movement  in
Corning's  common stock price prior to  contribution of the shares to the trust.
In the third  quarter  of 2004,  Corning  recorded  a credit of $50  million  to
reflect the  mark-to-market  of Corning  common stock.  Beginning with the first
quarter of 2003 and through  September  30,  2004,  Corning  recorded  total net
charges of $429 million to reflect the initial settlement and mark-to-market the
value of Corning common stock.

Two of Corning's  primary  insurers and several  excess  insurers have commenced
litigation for a declaration of the rights and  obligations of the parties under
insurance  policies,  including  rights that may be  affected by the  settlement
arrangement  described  above.  Corning is  vigorously  contesting  these cases.
Management is unable to predict the outcome of this insurance litigation.

The PCC Plan received a favorable vote from creditors in March 2004. Hearings to
consider  objections to the Plan were held in the Bankruptcy  Court in May 2004.
That Court set a schedule  for briefing  leading to final  arguments in November
2004. The timing and outcome are uncertain and  additional  appeals by objecting
parties are reasonably  possible.  Although the  confirmation of the PCC Plan is
subject to a number of contingencies, apart from the quarterly adjustment in the
value of 25 million shares of Corning common stock, management believes that the
likelihood of a material  adverse  impact to Corning's  financial  statements is
remote.







Astrium. In December of 2000, Astrium,  SAS and Astrium,  Ltd. filed a complaint
for negligence in the U.S. District Court for the Central District of California
against TRW,  Inc.,  Pilkington  Optronics  Inc.,  Corning  NetOptix,  Inc., OFC
Corporation and Optical Filter  Corporation  claiming  damages in excess of $150
million.  The complaint alleges that certain cover glasses for solar arrays used
to  generate  electricity  from solar  energy on  satellites  sold by  Astrium's
corporate  successor  were  negligently  coated by NetOptix or its  subsidiaries
(prior to  Corning's  acquisition  of NetOptix) in such a way that the amount of
electricity  the satellite can produce and their  effective life were materially
reduced.  NetOptix  has denied  that the  coatings  produced  by NetOptix or its
subsidiaries  caused the damage alleged in the complaint,  or that it is legally
liable for any damages that  Astrium may have  experienced.  In April 2002,  the
Court granted motions for summary  judgment by NetOptix and other  defendants to
dismiss  the  negligence  claims,  but  permitted  plaintiffs  to add  fraud and
negligent  misrepresentation  claims  against  all  defendants  and a breach  of
warranty claim against NetOptix and its subsidiaries. In October 2002, the Court
again  granted  defendants'  motions  for summary  judgment  and  dismissed  the
negligent misrepresentation and breach of warranty claims. The intentional fraud
claims were dismissed against all non-settling  defendants on February 25, 2003.
On March 19, 2003,  Astrium  appealed all of the Court's  Rulings  regarding the
various  summary  judgment  motions to the Ninth Circuit  Court of Appeals.  The
Circuit Court has stayed the appeal  pending a decision in a case being appealed
to the California Supreme Court involving similar issues of law which was argued
on October 5, 2004.  Recognizing  that the outcome of  litigation  is uncertain,
management  believes  that the  likelihood  of a  materially  adverse  impact to
Corning's financial statements is remote.

Furukawa  Electric  Company.  On February 3, 2003, The Furukawa Electric Company
filed suit in the Tokyo  District  Court in Japan against  Corning Cable Systems
International   Corporation  ("CCS  International")   alleging  infringement  of
Furukawa's Japanese Patent No. 2,023,966 which relates to separable fiber ribbon
units used in optical cable.  Furukawa's  complaint  requests slightly over (Y)6
billion in damages (approximately $56 million) and an injunction against further
sales in Japan of these fiber ribbon  units.  CCS  International  has denied the
allegation  of  infringement,  asserted  that  the  patent  is  invalid,  and is
defending  vigorously  against this  lawsuit.  Several  hearings  have been held
before the Tokyo  District  Court and the next hearing is scheduled  for October
29, 2004, at which a ruling from the court is expected. Management believes that
the likelihood of a materially adverse impact to Corning's financial  statements
is remote.

Chinese  Anti-Dumping  Investigation.  On July 1, 2003, the Chinese  Ministry of
Commerce  announced  an  anti-dumping  investigation  against  manufacturers  of
optical  fiber  based  in the U.S,  Korea  and  Japan,  alleging  that  standard
single-mode  optical  fiber  was  sold in  China  at  lower  prices  than in the
respective  home country.  This matter does not present a claim for damages.  On
June 16, 2004 the Ministry's  preliminary  determination  was issued which found
that Corning had dumped  optical  fiber in China  during the relevant  period in
2002 and 2003,  and that the  responding  parties  had  collectively  materially
injured Chinese producers.  The Ministry  stipulated that Corning's  preliminary
cash  deposit on optical  fiber  types  covered  by the  investigation  was 16%.
Chinese  purchasers of the affected  Corning  optical fiber will have to pay the
amount of this duty in the form of a cash  deposit.  At the same  time,  Chinese
customs are also asking that all other Corning optical fiber types imported into
China  will be charged a 16%  payment,  to be  refunded  when  customs'  testing
confirms  that  these  types are not  covered by the  investigation.  Corning is
vigorously contesting this preliminary  determination through additional filings
and may be able to appeal within the Ministry or the Chinese legal system if the
final  determination  is adverse.  Corning's fiber export revenues to China were
approximately  6% of  optical  fiber  and  cable  revenues.  Corning  management
estimates  that the impact of any potential loss of fiber export volume to China
should be less than $0.01 in earnings in the second half of 2004.







PicVue  Electronics  Ltd.,  PicVue  OptoElectronics   International,   Inc.  and
Eglasstrek Gmbh. In June 2002, Corning brought an action seeking to restrain the
use of its trade  secrets  and for  copyright  infringement  relating to certain
aspects  of the  fusion  draw  machine  used for liquid  crystal  display  glass
melting.  This  action is pending  in the U.S.  District  Court for the  Western
District of New York against these three named defendants. The District Court in
July  2003  denied  the  PicVue  motion to  dismiss  and  granted a  preliminary
injunction  in favor of  Corning,  subject  to posting a bond in an amount to be
determined.  PicVue,  a  Taiwanese  company,  responded  in  July  2003  with  a
counterclaim  alleging  violations of the antitrust laws and claiming damages of
more than  $120  million  as well as  requesting  trebled  damages.  PicVue  has
appealed the District  Court's ruling and the District Court has deferred ruling
on the bond amount until the  completion  of such appeal.  The  appellate  court
affirmed the grant of the preliminary injunction,  but remanded the case for the
District  Court to clarify the scope of the  injunction and to consider what, if
any, bond should be posted.  The parties have  submitted  papers to the District
Court addressing the issues remanded. In those papers, PicVue has requested that
Corning post a bond of $150 million.  The court has deferred  making a ruling on
the  remand  issues  pending   settlement   discussions   between  the  parties.
Recognizing  that the outcome of litigation is  uncertain,  management  believes
that the PicVue  counterclaim  is  without  merit and that the  likelihood  of a
materially adverse impact to Corning's financial statements is remote.

Tyco Electronics  Corporation and Tyco Technology Resources,  Inc. On August 13,
2003, CCS Holdings Inc. ("CCS"),  a Corning  subsidiary,  filed an action in the
U.S.  District  Court for the Middle  District of North  Carolina  against  Tyco
Electronics Corporation and Tyco Technology Resources, Inc. ("Tyco"), asking the
court to declare a Tyco patent  invalid  and not  infringed  by CCS.  The patent
generally  relates to a type of connector  for optical  fiber  cables.  Tyco has
responded  with a motion to dismiss  the action for lack of  jurisdiction.  That
motion has been fully briefed by the parties,  and Tyco has requested a hearing.
The motion to dismiss  has been  withdrawn  by Tyco and Tyco has filed an Answer
and  Counterclaims  to  CCS's  complaint.  Tyco's  counterclaims  allege  patent
infringement by CCS and seeks  unspecified  monetary  damages and an injunction.
Management  has not estimated the range of monetary  damages that may be claimed
if CCS does not  prevail  on its claim  that the Tyco  patent is  invalid or not
infringed.  Recognizing that the outcome of litigation is uncertain,  management
believes that the risk of a material impact on Corning's financial statements is
remote.

Grand Jury Investigation of Conventional  Cathode Ray Television Glass Business.
In August  2003,  CAV was served  with a federal  grand jury  document  subpoena
related to  pricing,  bidding  and  customer  practices  involving  conventional
cathode ray television glass picture tube components.  Eight employees or former
employees have each received a related subpoena.  CAV is a general  partnership,
51% owned by  Corning  and 49% owned by Asahi  Glass  America,  Inc.  CAV's only
manufacturing  facility in State College,  Pennsylvania closed in the first half
of  2003  due  to  declining  sales.  CAV is  cooperating  with  the  government
investigation.  Management  is not  able to  estimate  the  likelihood  that any
charges will be filed as a result of the investigation.








ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

This table provides  information  about our purchases of our common stock during
the fiscal third quarter of 2004:

Issuer Purchases of Equity Securities*



- ------------------------------------------------------------------------------------------------------------------------------------
                                          Total              Average             Total Number of              Approximate Dollar
                                         Number               Price            Shares Purchased as           Value of Shares that
                                        of Shares           Paid per            Part of Publicly             May Yet Be Purchased
Period                                 Purchased**           Share**             Announced Plan*                Under the Plan*
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                                          
July 1-31, 2004                            1,675             $12.09                    0                              $0
August 1-31, 2004                         13,518             $12.05                    0                              $0
September 1-30, 2004                       9,191             $10.17                    0                              $0
- ------------------------------------------------------------------------------------------------------------------------------------
Total                                     24,384             $11.35                    0                              $0
- ------------------------------------------------------------------------------------------------------------------------------------


*    During the quarter  ended  September  30, 2004,  we did not have a publicly
     announced  program for repurchase of shares of our common stock and did not
     repurchase our common stock in open-market  transactions  outside of such a
     program.

**   This column  reflects the  following  transactions  during the fiscal third
     quarter of 2004: (i) the deemed  surrender to us of 20,976 shares of common
     stock to pay the exercise price and to satisfy tax withholding  obligations
     in connection  with the exercise of employee  stock  options,  and (ii) the
     surrender to us of 3,408 shares of common stock to satisfy tax  withholding
     obligations  in connection  with the vesting of restricted  stock issued to
     employees.








ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)  Exhibits

     Exhibit Number        Exhibit Name
     --------------        ------------
         10.1              Form of Corning Incorporated Incentive Stock Plan
                           Agreement for Restricted Stock Grants

         10.2              Form of Corning Incorporated Incentive Stock Plan
                           Agreement for Restricted Stock Retention Grants

         10.3              Form of Corning Incorporated Incentive Stock
                           Option Agreement

         10.4              Form of Corning Incorporated Non-Qualified Stock
                           Option Agreement

          12               Computation of Ratio of Earnings to Fixed Charges

         31.1              Certification of Chief Executive Officer Pursuant
                           to Rule 13a-14(a) under the Exchange Act

         31.2              Certification of Chief Financial Officer Pursuant
                           to Rule 13a-14(a) under the Exchange Act

          32               Certification Pursuant to 18 U.S.C. Section 1350

(b)  Reports on Form 8-K

     A report  on Form 8-K was  filed  July 19,  2004,  in  connection  with the
     registrant's  results  for the  quarter  ended  June 30,  2004,  furnishing
     material pursuant to Item 12 and Item 9.*

     A  report  on  Form  8-K was  filed  August  6,  2004  in  connection  with
     registrant's  additional  reporting segments and segment financial results,
     under  Items 5 and 7. A report on Form 8-K was filed  October 7,  2004,  in
     connection with certain exit or disposal activities and material impairment
     charges under Items 2.05, 2.06 and 9.01.*

     A report on Form 8-K was filed  October 20, 2004,  in  connection  with the
     registrant's  results for the quarter ended September 30, 2004,  furnishing
     material pursuant to Item 2.02 and Item 7.01.*

     *  Information  furnished  under Item 9, Item 12, Item 7.01 or Item 2.02 of
     Form 8-K is not  incorporated by reference,  is not deemed filed and is not
     subject to liability under Section 18 of the Securities and Exchange Act of
     1934, as amended.

     * Other items under Part II are not applicable.






                                   SIGNATURES
                                   ----------


Pursuant to the  requirements  of the  Securities  and 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)






          October 28, 2004                      /s/ JAMES B. FLAWS
          ----------------           -----------------------------------------
                Date                              James B. Flaws
                                     Vice Chairman and Chief Financial Officer
                                           (Principal Financial Officer)




          October 28, 2004                    /s/ KATHERINE A. ASBECK
          ----------------           -----------------------------------------
                Date                            Katherine A. Asbeck
                                       Senior Vice President and Controller
                                          (Principal Accounting Officer)







                                  EXHIBIT INDEX
                                  -------------



Exhibit Number          Exhibit Name
- --------------          ------------
    10.1                Form of Corning Incorporated Incentive Stock Plan
                        Agreement for Restricted Stock Grants

    10.2                Form of Corning Incorporated Incentive Stock Plan
                        Agreement for Restricted Stock Retention Grants

    10.3                Form of Corning Incorporated Incentive Stock Option
                        Agreement

    10.4                Form of Corning Incorporated Non-Qualified Stock Option
                        Agreement

     12                 Computation of Ratio of Earnings to Fixed Charges

    31.1                Certification of Chief Executive Officer Pursuant to
                        Rule 13a-14(a) under the Exchange Act

    31.2                Certification of Chief Financial Officer Pursuant to
                        Rule 13a-14(a) under the Exchange Act

     32                 Certification Pursuant to 18 U.S.C. Section 1350






                                                                    Exhibit 10.1

                              CORNING INCORPORATED
                       2000 INCENTIVE STOCK PLAN AGREEMENT
                            (Restricted Stock Grant)


This Incentive Stock Agreement dated ______________ between Corning Incorporated
("Corning") and the employee named below is subject in all respects to Corning's
2000 Employee Equity Participation Program, a copy of which may be obtained from
the Corporate Secretary at One Riverfront Plaza, Corning, New York, 14831-0001.

1.   Award of Shares.  Corning  hereby  awards to the  below-named  employee  of
     Corning (the  "Employee") the number of shares of Corning Common Stock, par
     value $.50 per share (the "Incentive Stock"), indicated below.
                Employee             SSN               Shares

2.   Non-Transferability.   The  shares  of  Incentive  Stock  (and  all  shares
     subsequently  issued  or  distributed  by  means of  dividends,  spin-offs,
     splits,  combinations,  reclassifications,  or other  capital  changes with
     respect such  shares) may not be sold,  assigned,  transferred,  pledged or
     otherwise  encumbered by or on behalf of or for the benefit of the Employee
     until the Employee is entitled to receive physical possession of the shares
     pursuant to the terms of this Agreement.

3.   Voluntary  Termination,  Termination  for Cause,  Dereliction  of Duties or
     Harmful Acts.  The shares of Incentive  Stock are subject to forfeiture and
     shall be forfeited to Corning if the Employee voluntarily leaves the employ
     of Corning or one of its subsidiaries  without its express consent,  if the
     Employee's  employment is terminated "for cause", or if the Employee causes
     Corning or one of its  subsidiaries  to suffer  financial harm or damage to
     its reputation  (either before or after termination of employment)  through
     (i) dishonesty, (ii) material violation of Corning's standards of ethics or
     conduct,  or (iii)  material  deviation from the duties owed Corning or its
     subsidiaries by the Employee.

4.   Possession of Shares.  The shares of Incentive Stock shall be registered in
     the name of the  Employee  but shall be held by  Corning  (in "book  entry"
     form) until the Employee is entitled to possession  of the shares  pursuant
     to the terms of this Agreement.  Until the Employee has received possession
     of the shares of the Incentive  Stock,  the Employee shall have no right to
     sell,  assign,  transfer,  pledge  or  otherwise  encumber  the  shares  of
     Incentive  Stock in any  manner,  any  attempt  to do so to  result  in the
     forfeiture of such shares to which such sale, assignment,  transfer, pledge
     or other encumbrance purports to relate.

5.   Lapse of Forfeiture  Provisions.  The possibility of forfeiture referred to
     in  paragraph 3 above shall  lapse as to ________  percent  (_____%) of the
     Incentive  Stock after  ___________  or upon the  occurrence  of the events
     specified below:

     a.   The Employee's death.
     b.   The  Employee's  termination  of employment as the result of total and
          permanent  disability  or for health or medical  reasons which prevent
          the Employee from fulfilling the duties and responsibilities  assigned
          to the Employee.
     c.   The Employee's  involuntary  termination  for reasons other than those
          outlined in Paragraph 3 above.
     d.   The Employee's retirement under the Pension Plan or the pension scheme
          applicable  to one or more of Corning's  subsidiaries  on or after age
          55.
     e.   The Employee's  termination  of employment  with Corning or one of its
          subsidiaries  within  four  years  following  a  "change  of  control"
          (defined below),  which termination shall be deemed to occur if during
          such period the Employee  determines  in good faith that the position,
          duties,  responsibilities  and status assigned to him are inconsistent
          with the position, duties, responsibilities and status of the Employee
          with  Corning  or one of its  subsidiaries  immediately  prior  to the
          change  of  control.  Such  determination  shall be  evidenced  by the
          Employee in a writing  delivered to the Secretary of Corning or one of
          its  subsidiaries  promptly  but in no event later than 180 days after
          such determination.







          For purposes of this  Agreement,  the term  "change of control"  shall
          mean and shall be deemed to occur if and when:

          (i)  an  offerer  (other  than  Corning)  purchases  shares of Corning
               Common  Stock  pursuant  to a tender or  exchange  offer for such
               shares;

          (ii) any person (as such term is used in Sections  13(d) and  14(d)(2)
               of  the  Securities  Exchange  Act of  1934)  is or  becomes  the
               beneficial owner,  directly or indirectly,  of Corning securities
               representing  30%  or  more  of  the  combined  voting  power  of
               Corning's then outstanding securities;

          (iii)the  membership  of Corning's  Board of Directors  changes as the
               result of a contested election of elections, such that a majority
               of the  individuals who are Directors at any particular time were
               initially  placed on the Board of Directors as a result of such a
               contested election or elections occurring within the previous two
               years; or

          (iv) the consummation of a merger, consolidation,  sale or disposition
               of all or  substantially  all of  Corning's  assets  or a plan or
               partial   or   complete   liquidation   approved   by   Corning's
               shareholders.

6.   Voting rights and dividends.  The Employee may vote the shares of Incentive
     Stock and receive all dividends as declared and paid by Corning, subject to
     the appropriate withholding to satisfy applicable requirements.

7.   Legends.  The Employee  acknowledges that the shares of Incentive Stock are
     held in electronic "book entry" in a restricted account by Corning,  and if
     converted  into  paper  certificate  form would  bear a  restricted  legend
     indicating the possibility of forfeiture and the restrictions on transfer.

8.   Transfers.  If  the  Employee  shall  be  transferred  from  Corning  to  a
     subsidiary  company  (being an entity at least 50% owned within the meaning
     of Section 424(f) of the Internal  Revenue Code), or vice versa or from one
     subsidiary  company to  another,  the  Employee's  employment  shall not be
     deemed to have terminated.

9.   Other. Any dispute,  disagreement or matter of  interpretation  which shall
     arise  under  this  Agreement  shall be  finally  determined  by  Corning's
     Compensation Committee in its absolute discretion.

IN WITNESS  WHEREOF,  this  Agreement  has been duly executed by Corning and the
Employee.




CORNING INCORPORATED                           EMPLOYEE

By:                                            By:
    ---------------------------------              ----------------------
     K. P. Gregg
     Executive Vice President & Chief          Address: -----------------
       Administrative Officer
                                               --------------------------










                                                                    Exhibit 10.2

                              CORNING INCORPORATED
                       2000 INCENTIVE STOCK PLAN AGREEMENT
                       (Restricted Stock Retention Grant)


This  Incentive   Stock  Agreement   dated   ________________   between  Corning
Incorporated ("Corning") and the employee named below is subject in all respects
to Corning's 2000 Employee Equity Participation  Program, a copy of which may be
obtained from the Corporate  Secretary at One  Riverfront  Plaza,  Corning,  New
York, 14831-0001.

1.   Award of Shares.  Corning  hereby  awards to the  below-named  employee  of
     Corning (the  "Employee") the number of shares of Corning Common Stock, par
     value $.50 per share (the "Incentive Stock"), indicated below.
                Employee              SSN               Shares

2.   Non-Transferability.   The  shares  of  Incentive  Stock  (and  all  shares
     subsequently  issued  or  distributed  by  means of  dividends,  spin-offs,
     splits,  combinations,  reclassifications,  or other  capital  changes with
     respect such  shares) may not be sold,  assigned,  transferred,  pledged or
     otherwise  encumbered by or on behalf of or for the benefit of the Employee
     until the Employee is entitled to receive physical possession of the shares
     pursuant to the terms of this Agreement.

3.   Voluntary  Termination,  Termination  for Cause,  Dereliction  of Duties or
     Harmful Acts.  The shares of Incentive  Stock are subject to forfeiture and
     shall be forfeited to Corning if the Employee voluntarily leaves the employ
     of Corning or one of its subsidiaries without its express consent or if the
     Employee causes Corning or one of its subsidiaries to suffer financial harm
     or  damage  to its  reputation  (either  before  or  after  termination  of
     employment)  through (i) dishonesty,  (ii) material  violation of Corning's
     standards of ethics or conduct, or (iii) material deviation from the duties
     owed Corning or its subsidiaries by the Employee.

4.   Possession of Shares.  The shares of Incentive Stock shall be registered in
     the name of the  Employee  but shall be held by  Corning  (in "book  entry"
     form) until the Employee is entitled to possession  of the shares  pursuant
     to the terms of this Agreement.  Until the Employee has received possession
     of the shares of the Incentive  Stock,  the Employee shall have no right to
     sell,  assign,  transfer,  pledge  or  otherwise  encumber  the  shares  of
     Incentive  Stock in any  manner,  any  attempt  to do so to  result  in the
     forfeiture of such shares to which such sale, assignment,  transfer, pledge
     or other encumbrance purports to relate.

5.   Lapse of Forfeiture  Provisions.  The possibility of forfeiture referred to
     in paragraph 3 above shall lapse in whole upon the occurrence of the events
     specified in subparagraphs a, b, c and d below.

     a.   The Employee's death.
     b.   The Employee's retirement under the Pension Plan or the pension scheme
          applicable  to one or more of Corning's  subsidiaries  on or after age
          55.
     c.   The  Employee's  termination  of employment as the result of total and
          permanent  disability  or for health or medical  reasons which prevent
          the Employee from fulfilling the duties and responsibilities  assigned
          to the Employee.
     d.   The Employee's  termination  of employment  with Corning or one of its
          subsidiaries  within  four  years  following  a  "change  of  control"
          (defined below),  which termination shall be deemed to occur if during
          such period the Employee  determines  in good faith that the position,
          duties,  responsibilities  and status assigned to him are inconsistent
          with the position, duties, responsibilities and status of the Employee
          with  Corning  or one of its  subsidiaries  immediately  prior  to the
          change  of  control.  Such  determination  shall be  evidenced  by the
          Employee in a writing  delivered to the Secretary of Corning or one of
          its  subsidiaries  promptly  but in no event later than 180 days after
          such determination.







          For purposes of this  Agreement,  the term  "change of control"  shall
          mean and shall be deemed to occur if and when:

          (i)  an  offerer  (other  than  Corning)  purchases  shares of Corning
               Common  Stock  pursuant  to a tender or  exchange  offer for such
               shares;

          (ii) any person (as such term is used in Sections  13(d) and  14(d)(2)
               of  the  Securities  Exchange  Act of  1934)  is or  becomes  the
               beneficial owner,  directly or indirectly,  of Corning securities
               representing  30%  or  more  of  the  combined  voting  power  of
               Corning's then outstanding securities;

          (iii)the  membership  of Corning's  Board of Directors  changes as the
               result of a contested election of elections, such that a majority
               of the  individuals who are Directors at any particular time were
               initially  placed on the Board of Directors as a result of such a
               contested election or elections occurring within the previous two
               years; or

          (iv) the consummation of a merger, consolidation,  sale or disposition
               of all or  substantially  all of  Corning's  assets  or a plan or
               partial   or   complete   liquidation   approved   by   Corning's
               shareholders.

6.   Voting rights and dividends.  The Employee may vote the shares of Incentive
     Stock and receive all dividends as declared and paid by Corning, subject to
     the appropriate withholding to satisfy applicable requirements.

7.   Legends.  The Employee  acknowledges that the shares of Incentive Stock are
     held in electronic "book entry" in a restricted account by Corning,  and if
     converted  into  paper  certificate  form would  bear a  restricted  legend
     indicating the possibility of forfeiture and the restrictions on transfer.

8.   Transfers.  If  the  Employee  shall  be  transferred  from  Corning  to  a
     subsidiary  company  (being an entity at least 50% owned within the meaning
     of Section 424(f) of the Internal  Revenue Code), or vice versa or from one
     subsidiary  company to  another,  the  Employee's  employment  shall not be
     deemed to have terminated.

9.   Other. Any dispute,  disagreement or matter of  interpretation  which shall
     arise  under  this  Agreement  shall be  finally  determined  by  Corning's
     Compensation Committee in its absolute discretion.

IN WITNESS  WHEREOF,  this  Agreement  has been duly executed by Corning and the
Employee.



CORNING INCORPORATED                           EMPLOYEE

By:                                            By:
    ---------------------------------              ----------------------
     K. P. Gregg
     Executive Vice President & Chief          Address: -----------------
       Administrative Officer
                                               --------------------------

                                               S.S.N.:
                                                      -------------------







                                                                    Exhibit 10.3


                              CORNING INCORPORATED
                        INCENTIVE STOCK OPTION AGREEMENT


The following  section  summarizes  the principal  provisions of the 2000 Equity
Participation   Program  (the  "Plan").   The  terms  of  the  Plan  govern  the
administration  of all  incentive  stock  options (an "Option") and other equity
grants made by Corning Incorporated (the "Corporation").  A copy of the Plan can
be obtained from the Corporation's Secretary, One Riverfront Plaza, Corning, New
York  14831-0001.  If there is a discrepancy  between this summary and the Plan,
the terms of the Plan will govern.

1.   Award of  Option.  An Option  award is  evidenced  by a  written  statement
     provided by the Corporation to an Option  recipient (the  "Optionee").  The
     statement  will  include the date of the Option  grant (the  "Option  Grant
     Date"),  the  number of shares  covered  by the  Option  grant,  the Option
     vesting dates,  the Option exercise  price,  and the expiration date of the
     Option (the "Final Expiration Date").

2.   Exercise  of Option.  An Option can be  exercised  on or after the date the
     Option (or a portion of the Option)  becomes  vested  (nonforfeitable).  No
     Option,  however,  can be exercised  before it is vested or after its Final
     Expiration  Date. For the specific  vesting dates applicable to your Option
     grant, you can check the statement provided to you by the Company.

3.   Non-Transferability.  An Option is not  transferable  other than by will or
     the laws of  descent  and  distribution  and may be  exercised  during  the
     lifetime of the Optionee only by the Optionee.

4.   Exercise for Cash or Stock. The purchase price of shares purchased  through
     an Option  exercise is payable in full with,  or in a  combination  of, (a)
     cash,  or (b) shares of Corning  Common  Stock owned by the  Optionee  duly
     endorsed or  accompanied by stock powers  executed in blank.  If payment is
     made in whole or in part with shares of Corning Common Stock,  the value of
     such Common Stock is calculated as the mean between its high and low prices
     on the New York Stock Exchange on the day of purchase.

5.   Exercise After  Termination of Employment,  Death,  Disability or Change in
     Control.  The  provisions  covering  the  exercise  of an Option  following
     termination  of employment,  death,  disability or change in control are as
     follows:

     (a)  Retirement -- If the Optionee's  employment shall terminate on account
          of retirement  from the  Corporation at or after age 55, an Option may
          be exercised for the remaining life of the option.

     (b)  Involuntary  Termination  -- If the  Optionee's  employment  shall  be
          involuntarily  terminated  for any  reason  not  otherwise  separately
          addressed  below,  an Option may be  exercised  for  ninety  (90) days
          following such  termination  to the extent  exercisable at the date of
          such termination.

     (c)  Death -- If the Optionee shall die while employed, or while retired as
          described  in  subsection  (a),  or while  disabled  as  described  in
          subsection  (d), an Option may be  exercised  by the  Optionee's  duly
          appointed  legal  representative  during  the  remaining  life  of the
          option.

     (d)  Disability -- If the Optionee's employment shall terminate as a result
          of a total and  permanent  disability  (as that term is defined in the
          Corporation's   long-term  disability  plan(s)),   an  Option  may  be
          exercised during the remaining life of the option.

     (e)  Divestiture, etc. -- If the Optionee's employment is terminated due to
          a reduction in force or  divestiture or  discontinuance  of certain of
          the Corporation's  operations,  an Option may be exercised for 3 years
          after termination of employment.







     (f)  Voluntary Termination, Termination for Cause, Dereliction of Duties or
          Harmful Acts -- If the Optionee  voluntarily  leaves the employ of the
          Corporation  other than for Retirement as described in subsection (a),
          an Option shall  terminate  immediately  and be of no further force or
          effect.  If  the  Optionee  shall  cause  the  Corporation  to  suffer
          financial  harm or damage to its  reputation  (either  before or after
          termination  of  employment)  through (i)  dishonesty,  (ii)  material
          violation  of the  Corporation's  standards  of ethics or conduct,  or
          (iii) material  deviation from the duties owed the  Corporation by the
          Optionee,  an Option  shall  terminate  and be of no further  force or
          effect.

     (g)  Transfers -- If the Optionee shall be transferred from the Corporation
          to a subsidiary  company  (being a 50% owned entity within the meaning
          of Section  424(f) of the Code),  or vice versa or from one subsidiary
          company to another,  the Optionee's  employment shall not be deemed to
          have  terminated.  An Option shall be treated in  accordance  with the
          rules in  subsection  (e) if,  while the  Optionee  is  employed  by a
          subsidiary  company,  such  company  shall  cease  to be a  subsidiary
          company and the Optionee is not thereupon  transferred to and employed
          by the Corporation or another subsidiary company.

     (h)  Change  of  Control  -- In the  event of a "change  of  control",  the
          provisions  of Section 2 above shall not be  applicable  and an Option
          shall become fully exercisable.

          For purposes of this  Agreement,  the term  "change of control"  shall
          mean and shall be deemed to occur if and when:

          (i)  an  offerer  (other  than the  Corporation)  purchases  shares of
               Corning  Common Stock  pursuant to a tender or exchange offer for
               such shares;

          (ii) any person (as such term is used in Sections  13(d) and  14(d)(2)
               of  the  Securities  Exchange  Act of  1934)  is or  becomes  the
               beneficial  owner,  directly or indirectly,  of the Corporation's
               securities  representing 50% or more of the combined voting power
               of Corporation's then outstanding securities;

          (iii)the membership of the  Corporation's  Board of Directors  changes
               as the result of a contested  election or elections,  such that a
               majority of the  individuals  who are Directors at any particular
               time were initially  placed on the Board of Directors as a result
               of such a contested  election or elections  occurring  within the
               previous two years; or

          (iv) the  consummation of a merger in which the Corporation is not the
               surviving corporation,  consolidation, sale or disposition of all
               or  substantially  all of the  Corporation's  assets or a plan of
               partial or complete  liquidation  approved  by the  Corporation's
               shareholders.

6.   Modification of Agreement.  Any modification of the terms of this Agreement
     must be approved, and any dispute, disagreement or matter of interpretation
     which shall arise under this Agreement shall be finally  determined by, the
     Corporation's Compensation Committee in its absolute discretion.

7.   Exercise  Procedures.  An Option may be  exercised in  accordance  with the
     procedures specified by the Corporation from time to time.

8.   Discretionary  Award.  By  acknowledging  and  accepting  this stock option
     award, you agree that the granting of this stock option award is completely
     at the  discretion of the  Committee or its designee  pursuant to the Plan.
     The stock option  award is not an acquired  right to you, but an offer from
     the Company to employees who fulfill specific conditions.  As a result, you
     do not expect that future  options  will be granted to you under this Plan,
     or any other plan,  nor do you expect that the benefits  accruing under the
     Plan will be reflected in any  severance  or  indemnity  payments  that the
     Company, or an Affiliate, may make to you in the future.








                                                                    Exhibit 10.4


                              CORNING INCORPORATED
                      NON-QUALIFIED STOCK OPTION AGREEMENT


The following  section  summarizes  the principal  provisions of the 2000 Equity
Participation   Program  (the  "Plan").   The  terms  of  the  Plan  govern  the
administration of all non-qualified stock options (an "Option") and other equity
grants made by Corning Incorporated (the "Corporation").  A copy of the Plan can
be obtained from the Corporation's Secretary, One Riverfront Plaza, Corning, New
York  14831-0001.  If there is a discrepancy  between this summary and the Plan,
the terms of the Plan will govern.

1.   Award of  Option.  An Option  award is  evidenced  by a  written  statement
     provided by the Corporation to an Option  recipient (the  "Optionee").  The
     statement  will  include the date of the Option  grant (the  "Option  Grant
     Date"),  the  number of shares  covered  by the  Option  grant,  the Option
     vesting dates,  the Option exercise  price,  and the expiration date of the
     Option (the "Final Expiration Date").

2.   Exercise  of Option.  An Option can be  exercised  on or after the date the
     Option (or a portion of the Option)  becomes  vested  (nonforfeitable).  No
     Option,  however,  can be exercised  before it is vested or after its Final
     Expiration  Date. For the specific  vesting dates applicable to your Option
     grant, you can check the statement provided to you by the Company.

3.   Non-Transferability.  An Option is not  transferable  other than by will or
     the laws of  descent  and  distribution  and may be  exercised  during  the
     lifetime of the Optionee only by the Optionee.

4.   Exercise for Cash or Stock. The purchase price of shares purchased  through
     an Option  exercise is payable in full with,  or in a  combination  of, (a)
     cash,  or (b) shares of Corning  Common  Stock owned by the  Optionee  duly
     endorsed or  accompanied by stock powers  executed in blank.  If payment is
     made in whole or in part with shares of Corning Common Stock,  the value of
     such Common Stock is calculated as the mean between its high and low prices
     on the New York Stock Exchange on the day of purchase.

5.   Exercise After  Termination of Employment,  Death,  Disability or Change in
     Control.  The  provisions  covering  the  exercise  of an Option  following
     termination  of employment,  death,  disability or change in control are as
     follows:

     (a)  Retirement -- If the Optionee's  employment shall terminate on account
          of retirement  from the  Corporation at or after age 55, an Option may
          be exercised for the remaining life of the option.

     (b)  Involuntary  Termination  -- If the  Optionee's  employment  shall  be
          involuntarily  terminated  for any  reason  not  otherwise  separately
          addressed  below,  an Option may be  exercised  for  ninety  (90) days
          following such  termination  to the extent  exercisable at the date of
          such termination.

     (c)  Death -- If the Optionee shall die while employed, or while retired as
          described  in  subsection  (a),  or while  disabled  as  described  in
          subsection  (d), an Option may be  exercised  by the  Optionee's  duly
          appointed  legal  representative  during  the  remaining  life  of the
          option.

     (d)  Disability -- If the Optionee's employment shall terminate as a result
          of a total and  permanent  disability  (as that term is defined in the
          Corporation's   long-term  disability  plan(s)),   an  Option  may  be
          exercised during the remaining life of the option.

     (e)  Divestiture, etc. -- If the Optionee's employment is terminated due to
          a reduction in force or  divestiture or  discontinuance  of certain of
          the Corporation's  operations,  an Option may be exercised for 3 years
          after termination of employment.







     (f)  Voluntary Termination, Termination for Cause, Dereliction of Duties or
          Harmful Acts -- If the Optionee  voluntarily  leaves the employ of the
          Corporation  other than for Retirement as described in subsection (a),
          an Option shall  terminate  immediately  and be of no further force or
          effect.  If  the  Optionee  shall  cause  the  Corporation  to  suffer
          financial  harm or damage to its  reputation  (either  before or after
          termination  of  employment)  through (i)  dishonesty,  (ii)  material
          violation  of the  Corporation's  standards  of ethics or conduct,  or
          (iii) material  deviation from the duties owed the  Corporation by the
          Optionee,  an Option  shall  terminate  and be of no further  force or
          effect.

     (g)  Transfers -- If the Optionee shall be transferred from the Corporation
          to a subsidiary  company  (being a 50% owned entity within the meaning
          of Section  424(f) of the Code),  or vice versa or from one subsidiary
          company to another,  the Optionee's  employment shall not be deemed to
          have  terminated.  An Option shall be treated in  accordance  with the
          rules in  subsection  (e) if,  while the  Optionee  is  employed  by a
          subsidiary  company,  such  company  shall  cease  to be a  subsidiary
          company and the Optionee is not thereupon  transferred to and employed
          by the Corporation or another subsidiary company.

     (h)  Change  of  Control  -- In the  event of a "change  of  control",  the
          provisions  of Section 2 above shall not be  applicable  and an Option
          shall become fully exercisable.

          For purposes of this  Agreement,  the term  "change of control"  shall
          mean and shall be deemed to occur if and when:

          (i)  an  offerer  (other  than the  Corporation)  purchases  shares of
               Corning  Common Stock  pursuant to a tender or exchange offer for
               such shares;

          (ii) any person (as such term is used in Sections  13(d) and  14(d)(2)
               of  the  Securities  Exchange  Act of  1934)  is or  becomes  the
               beneficial  owner,  directly or indirectly,  of the Corporation's
               securities  representing 50% or more of the combined voting power
               of Corporation's then outstanding securities;

          (iii)the membership of the  Corporation's  Board of Directors  changes
               as the result of a contested  election or elections,  such that a
               majority of the  individuals  who are Directors at any particular
               time were initially  placed on the Board of Directors as a result
               of such a contested  election or elections  occurring  within the
               previous two years; or

          (iv) the  consummation of a merger in which the Corporation is not the
               surviving corporation,  consolidation, sale or disposition of all
               or  substantially  all of the  Corporation's  assets or a plan of
               partial or complete  liquidation  approved  by the  Corporation's
               shareholders.

6.   Exercise  Procedures.  An Option may be  exercised in  accordance  with the
     procedures specified by the Corporation from time to time.

7.   Discretionary  Award.  By  acknowledging  and  accepting  this stock option
     award, you agree that the granting of this stock option award is completely
     at the  discretion of the  Committee or its designee  pursuant to the Plan.
     The stock option  award is not an acquired  right to you, but an offer from
     the Company to employees who fulfill specific conditions.  As a result, you
     do not expect that future  options  will be granted to you under this Plan,
     or any other plan,  nor do you expect that the benefits  accruing under the
     Plan will be reflected in any  severance  or  indemnity  payments  that the
     Company, or an Affiliate, may make to you in the future.

8.   Modification of Agreement.  Any modification of the terms of this Agreement
     must be approved, and any dispute, disagreement or matter of interpretation
     which shall arise under this Agreement shall be finally  determined by, the
     Corporation's Compensation Committee in its absolute discretion.









                                                                      Exhibit 12
CORNING INCORPORATED AND SUBSIDIARY COMPANIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(In millions, except ratios)

                                                     For the nine months ended
                                                        September 30, 2004
                                                     -------------------------

Loss before income taxes                                     $  (1,647)
Adjustments:
    Distributed income of equity investees                          252
    Amortization of capitalized interest                              4
    Fixed charges net of capitalized interest                       125
                                                             ----------

Loss before taxes and fixed charges, as adjusted             $   (1,266)
                                                             ==========

Fixed charges:
   Interest incurred                                         $      120
   Portion of rent expense which represents an
     appropriate interest factor                                     16
   Amortization of debt costs                                         3
                                                             ----------

Total fixed charges                                                 139
Capitalized interest                                                (14)
                                                             ----------

Total fixed charges, net of capitalized interest             $      125
                                                             ==========

Ratio of earnings to fixed charges                               *
                                                             ==========

* Loss before taxes and fixed  charges,  as adjusted,  were  inadequate to cover
total fixed  charges by  approximately  $1.4  billion for the nine months  ended
September 30, 2004.






                                                                    Exhibit 31.1

                                 CERTIFICATIONS


I, James R. Houghton, certify that:

1.   I have reviewed this quarterly report on Form 10-Q of Corning Incorporated;

2.   Based on my knowledge, this report does not contain any untrue statement of
     a material  fact or omit to state a  material  fact  necessary  to make the
     statements made, in light of the circumstances  under which such statements
     were made,  not  misleading  with  respect  to the  period  covered by this
     report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in  this  report,  fairly  present  in all  material
     respects the financial  condition,  results of operations and cash flows of
     the  registrant  as of, and for, the periods  presented  in this  quarterly
     report;

4.   The  registrant's  other  certifying  officer  and  I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules  13a-15(e) and  15d-15(e))  for the registrant and we
     have:

     a)   designed  such  disclosure  controls  and  procedures,  or caused such
          disclosure   controls  and   procedures  to  be  designed   under  our
          supervision,  to ensure  that  material  information  relating  to the
          registrant,  including its consolidated subsidiaries, is made known to
          us by others within those entities,  particularly during the period in
          which this report is being prepared;

     b)   evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures and presented in this report our conclusions  about the
          effectiveness of the disclosure controls and procedures, as of the end
          of the period covered by this report based on such evaluation; and

     c)   disclosed  in this  report  any  change in the  registrant's  internal
          control over financial reporting that occurred during the registrant's
          most recent fiscal quarter (the registrant's  fourth fiscal quarter in
          the case of an annual  report)  that has  materially  affected,  or is
          reasonably  likely to materially  affect,  the  registrant's  internal
          control over financial reporting;

5.   The registrant's  other certifying  officer and I have disclosed,  based on
     our most recent evaluation of internal control over financial reporting, to
     the registrant's  auditors and the audit committee of registrant's board of
     directors (or persons performing the equivalent function):

     a)   all significant  deficiencies and material weaknesses in the design or
          operation  of internal  control  over  financial  reporting  which are
          reasonably  likely to  adversely  affect the  registrant's  ability to
          record, process, summarize and report financial information; and

     b)   any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          controls over financial reporting.





          October 28, 2004                     /s/ JAMES R. HOUGHTON
          ----------------             ------------------------------------
                Date                             James R. Houghton
                                       Chairman and Chief Executive Officer







                                                                    Exhibit 31.2

                                 CERTIFICATIONS


I, James B. Flaws, certify that:

1.   I have reviewed this quarterly report on Form 10-Q of Corning Incorporated;

2.   Based on my knowledge, this report does not contain any untrue statement of
     a material  fact or omit to state a  material  fact  necessary  to make the
     statements made, in light of the circumstances  under which such statements
     were made,  not  misleading  with  respect  to the  period  covered by this
     report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in  this  report,  fairly  present  in all  material
     respects the financial  condition,  results of operations and cash flows of
     the  registrant  as of, and for, the periods  presented  in this  quarterly
     report;

4.   The  registrant's  other  certifying  officer  and  I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules  13a-15(e) and  15d-15(e))  for the registrant and we
     have:

     a)   designed  such  disclosure  controls  and  procedures,  or caused such
          disclosure   controls  and   procedures  to  be  designed   under  our
          supervision,  to ensure  that  material  information  relating  to the
          registrant,  including its consolidated subsidiaries, is made known to
          us by others within those entities,  particularly during the period in
          which this report is being prepared;

     b)   evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures and presented in this report our conclusions  about the
          effectiveness of the disclosure controls and procedures, as of the end
          of the period covered by this report based on such evaluation; and

     c)   disclosed  in this  report  any  change in the  registrant's  internal
          control over financial reporting that occurred during the registrant's
          most recent fiscal quarter (the registrant's  fourth fiscal quarter in
          the case of an annual  report)  that has  materially  affected,  or is
          reasonably  likely to materially  affect,  the  registrant's  internal
          control over financial reporting;

5.   The registrant's  other certifying  officer and I have disclosed,  based on
     our most recent evaluation of internal control over financial reporting, to
     the registrant's  auditors and the audit committee of registrant's board of
     directors (or persons performing the equivalent function):

     a)   all significant  deficiencies and material weaknesses in the design or
          operation  of internal  control  over  financial  reporting  which are
          reasonably  likely to  adversely  affect the  registrant's  ability to
          record, process, summarize and report financial information; and

     b)   any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          controls over financial reporting.





          October 28, 2004                      /s/ JAMES B. FLAWS
          ----------------           -----------------------------------------
                Date                              James B. Flaws
                                     Vice Chairman and Chief Financial Officer








                                                                      Exhibit 32



                              CORNING INCORPORATED

                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350



In connection with the Quarterly Report of Corning  Incorporated (the "Company")
on Form  10-Q  for the  period  ended  September  30,  2004 as  filed  with  the
Securities and Exchange Commission on the date hereof (the "Report"),  we, James
R. Houghton and James B. Flaws,  Chairman and Chief  Executive  Officer and Vice
Chairman and Chief Financial  Officer,  respectively,  of the Company,  certify,
pursuant to 18 U.S.C.  Section  1350.

(1)  The Report fully complies with the  requirements  of section 13(a) or 15(d)
     of the Securities Exchange Act of 1934, as amended; and

(2)  The information  contained in the Report fairly  presents,  in all material
     respects, the financial condition and results of operations of the Company.






          October 28, 2004                     /s/ JAMES R. HOUGHTON
          ----------------           -----------------------------------------
                Date                             James R. Houghton
                                        Chairman and Chief Executive Officer




          October 28, 2004                       /s/ JAMES B. FLAWS
          ----------------           -----------------------------------------
                Date                               James B. Flaws
                                     Vice Chairman and Chief Financial Officer