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                  March 31, 2006
                                ----------------------------------------------

                                       OR

[ ] 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
                              --------------------
             (Exact name of Registrant as specified in its charter)


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

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 (or for such  shorter  period that the  registrant  was
required  to file  such  reports)  and  (2)  has  been  subject  to such  filing
requirements for the past 90 days.

                           Yes  X                   No
                               ---                     ---

Indicate by check mark whether the registrant is a large  accelerated  filer, an
accelerated  filer, or a  non-accelerated  filer. See definition of "accelerated
filer and large  accelerated  filer" in Rule 12b-2 of the Exchange  Act.  (Check
one):

Large accelerated filer  X     Accelerated filer      Non-accelerated filer
                        ---                      ---                        ---

Indicate by check mark whether the  registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).

                           Yes                   No X
                              ----                 ---

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

1,557,553,059   shares  of  Corning's  Common  Stock,   $0.50  Par  Value,  were
outstanding as of May 3, 2006.






                                      INDEX
                                      -----

PART I - FINANCIAL INFORMATION
- ------------------------------
                                                                          Page
                                                                          ----
Item 1. Financial Statements

    Consolidated Statements of Operations (Unaudited) for the
       three months ended March 31, 2006 and 2005                           3

    Consolidated Balance Sheets (Unaudited) at March 31, 2006 and
       December 31, 2005                                                    4

    Consolidated Statements of Cash Flows (Unaudited) for the
       three months ended March 31, 2006 and 2005                           5

    Notes to Consolidated Financial Statements (Unaudited)                  6

Item 2. Management's Discussion and Analysis of Financial Condition
           and Results of Operations                                       32

Item 3. Quantitative and Qualitative Disclosures About Market Risk         46

Item 4. Controls and Procedures                                            46


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

Item 1. Legal Proceedings                                                  48

Item 1A. Risk Factors                                                      52

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

Item 6. Exhibits                                                           54

Signatures                                                                 55








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




                                                                                                        Three months
                                                                                                       ended March 31,
                                                                                               -------------------------------
                                                                                                 2006                   2005
                                                                                               ---------             ---------
                                                                                                               
Net sales                                                                                      $   1,262             $   1,050
Cost of sales                                                                                        689                   621
                                                                                               ---------             ---------

Gross margin                                                                                         573                   429

Operating expenses:
   Selling, general and administrative expenses                                                      223                   184
   Research, development and engineering expenses                                                    124                    98
   Amortization of purchased intangibles                                                               3                     5
   Restructuring, impairment and other charges (Note 3)                                                6                    19
   Asbestos settlement (Note 4)                                                                      185                   (12)
                                                                                               ---------             ---------

Operating income                                                                                      32                   135

Interest income                                                                                       24                    10
Interest expense                                                                                     (20)                  (35)
Other income (expense), net                                                                           20                    (9)
                                                                                               ---------             ---------

Income before income taxes                                                                            56                   101
Benefit (provision) for income taxes (Note 6)                                                          2                   (19)
                                                                                               ---------             ---------

Income before minority interests and equity earnings                                                  58                    82
Minority interests                                                                                    (1)                   (1)
Equity in earnings of affiliated companies, net of impairments (Note 8)                              200                   169
                                                                                               ---------             ---------

Net income                                                                                     $     257             $     250
                                                                                               =========             =========

Basic earnings per common share (Note 7)                                                       $    0.17             $    0.18
                                                                                               =========             =========
Diluted earnings per common share (Note 7)                                                     $    0.16             $    0.17
                                                                                               =========             =========


The  accompanying  notes are an integral  part of these  consolidated  financial
statements.





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




                                                                                          March 31,          December 31,
                                                                                            2006                 2005
                                                                                         -----------         ------------
                                                                                                        
Assets

Current assets:
   Cash and cash equivalents                                                              $   1,262           $   1,342
   Short-term investments, at fair value                                                      1,216               1,092
                                                                                          ---------           ---------
     Total cash, cash equivalents and short-term investments                                  2,478               2,434
   Trade accounts receivable, net of doubtful accounts and allowances - $29 and $24             696                 629
   Inventories (Note 9)                                                                         616                 570
   Deferred income taxes (Note 6)                                                                65                  44
   Other current assets                                                                         189                 183
                                                                                          ---------           ---------
       Total current assets                                                                   4,044               3,860

Investments (Note 10)                                                                         1,929               1,729
Property, net of accumulated depreciation - $3,755 and $3,632                                 4,816               4,675
Goodwill and other intangible assets, net (Note 11)                                             336                 338
Deferred income taxes (Note 6)                                                                   50                  10
Other assets                                                                                    582                 595
                                                                                          ---------           ---------

Total Assets                                                                              $  11,757           $  11,207
                                                                                          =========           =========

Liabilities and Shareholders' Equity

Current liabilities:
   Current portion of long-term debt (Note 5)                                             $      23           $      18
   Accounts payable                                                                             661                 690
   Other accrued liabilities (Notes 4 and 12)                                                 1,699               1,662
                                                                                          ---------           ---------
       Total current liabilities                                                              2,383               2,370

Long-term debt (Note 5)                                                                       1,788               1,789
Postretirement benefits other than pensions                                                     593                 593
Other liabilities (Notes 4 and 12)                                                              907                 925
                                                                                          ---------           ---------
       Total liabilities                                                                      5,671               5,677
                                                                                          ---------           ---------

Commitments and contingencies (Note 4)
Minority interests                                                                               46                  43
Shareholders' equity:
   Preferred stock - Par value $100.00 per share; Shares authorized: 10 million
   Common stock - Par value $0.50 per share; Shares authorized: 3.8 billion;
     Shares issued: 1,564 million and 1,552 million                                             786                 776
   Additional paid-in capital                                                                11,808              11,548
   Accumulated deficit                                                                       (6,591)             (6,847)
   Treasury stock, at cost; Shares held: 17 million                                            (181)               (168)
   Accumulated other comprehensive income (Note 16)                                             218                 178
                                                                                          ---------           ---------
       Total shareholders' equity                                                             6,040               5,487
                                                                                          ---------           ---------

Total Liabilities and Shareholders' Equity                                                $  11,757           $  11,207
                                                                                          =========           =========


The  accompanying  notes are an integral  part of these  consolidated  financial
statements.






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



                                                                                              Three months ended
                                                                                                    March 31,
                                                                                          ---------------------------
                                                                                            2006              2005
                                                                                          --------          ---------
                                                                                                      
Cash Flows from Operating Activities:
   Net income                                                                             $    257          $    250
   Adjustments to reconcile net income to net cash provided by operating activities:
     Depreciation                                                                              141               120
     Amortization of purchased intangibles                                                       3                 5
     Asbestos settlement                                                                       185               (12)
     Restructuring, impairment and other charges                                                 6                19
     Stock compensation charges                                                                 32                 6
     Undistributed earnings of affiliated companies                                            (70)              (26)
     Deferred taxes                                                                            (62)                3
     Restructuring payments                                                                     (4)               (9)
     Customer deposits                                                                          (8)               20
     Employee benefit payments less than expense                                                15                16
     Changes in certain working capital items:
        Trade accounts receivable                                                              (65)              (54)
        Inventories                                                                            (46)              (39)
        Other current assets                                                                    (8)              (16)
        Accounts payable and other current liabilities, net of restructuring payments         (195)             (151)
     Other, net                                                                                                   10
                                                                                          --------          --------
Net cash provided by operating activities                                                      181               142
                                                                                          --------          --------

Cash Flows from Investing Activities:
   Capital expenditures                                                                       (280)             (323)
   Net increase in long-term investments and other long-term assets                            (77)
   Short-term investments - acquisitions                                                      (858)             (314)
   Short-term investments - liquidations                                                       735               486
   Other, net                                                                                                      2
                                                                                          --------          --------
Net cash used in investing activities                                                         (480)             (149)
                                                                                          --------          --------

Cash Flows from Financing Activities:
   Repayments of short-term borrowings and current portion of long-term debt                    (4)             (192)
   Proceeds from issuance of long-term debt, net                                                                  48
   Retirements of long-term debt                                                                                  (2)
   Proceeds from issuance of common stock, net                                                   6                12
   Proceeds from the exercise of stock options                                                 219                 9
   Other, net                                                                                   (2)               (5)
                                                                                          --------          ---------
Net cash provided by (used in) financing activities                                            219              (130)
                                                                                          --------          --------
Effect of exchange rates on cash                                                                                 (25)
                                                                                          --------          --------
Net decrease in cash and cash equivalents                                                      (80)             (162)
Cash and cash equivalents at beginning of period                                             1,342             1,009
                                                                                          --------          --------

Cash and cash equivalents at end of period                                                $  1,262          $    847
                                                                                          ========          ========


The accompanying notes are an integral part of these statements.

Certain amounts for 2005 were reclassified to conform to 2006 classifications.





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


1.   Significant Accounting Policies

Basis of Presentation

In these  notes,  the terms  "Corning,"  "Company,"  "we,"  "us," or "our"  mean
Corning Incorporated and subsidiary companies.

The accompanying  unaudited consolidated financial statements have been prepared
pursuant to the rules and regulations of the Securities and Exchange  Commission
(SEC) and in accordance with  accounting  principles  generally  accepted in the
United  States of America  (GAAP) for  interim  financial  information.  Certain
information  and note  disclosures  normally  included in  financial  statements
prepared in accordance  with GAAP have been omitted or condensed.  These interim
consolidated  financial  statements should be read in conjunction with Corning's
consolidated  financial  statements  and notes  thereto  included  in its Annual
Report on Form 10-K/A for the year ended December 31, 2005 (2005 Form 10-K/A).

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 results
for  interim  periods are not  necessarily  indicative  of results  which may be
expected for any other interim period or for the full year.

Certain amounts for 2005 were reclassified to conform with 2006 classifications.

Foreign Currency Translation and Transactions

The determination of the functional currency for Corning's foreign  subsidiaries
is made based on the appropriate  economic and management  indicators.  For most
foreign  operations,  the local  currencies  are generally  considered to be the
functional currencies.  Prior to 2005, non-U.S. operations which did not use the
local  currency  as the  functional  currency  used the U.S.  dollar.  Effective
January 1, 2005, our Taiwan subsidiary changed its functional  currency from the
new Taiwan dollar (its local  currency) to the Japanese yen due to the increased
significance of Japanese yen based transactions of that subsidiary.  As a result
of this  change in  functional  currency,  exchange  rate  gains and  losses are
recognized  on  transactions  in  currencies  other  than the  Japanese  yen and
included in income for the period in which the exchange rates changed.

For foreign subsidiary functional currency financial  statements,  balance sheet
accounts are translated at current  exchange rates, and statements of operations
accounts are  translated  at average  exchange  rates for the year.  Translation
gains and losses are  recorded  as a separate  component  of  accumulated  other
comprehensive income (loss) in shareholders'  equity. The effects of remeasuring
non-functional  currency assets and liabilities into the functional currency are
included in current earnings.

Variable Interest Entities

Corning leases certain transportation equipment from a Trust that qualifies as a
variable  interest  entity  under FIN 46R,  Consolidation  of Variable  Interest
Entities, an Interpretation of Accounting Research Bulletin No. 51, Revised (FIN
46R).  The sole  purpose of this entity is leasing  transportation  equipment to
Corning.  Since Corning is the primary beneficiary of this entity, the financial
statements  of the entity  are  included  in  Corning's  consolidated  financial
statements.  The entity's  assets are primarily  comprised of fixed assets which
are  collateral  for  the  entity's  borrowings.   These  assets,  amounting  to
approximately  $29.3 million and $29.5 million as of March 31, 2006 and December
31, 2005,  respectively,  are classified as long-term assets in the consolidated
balance sheet.






Corning leases certain transportation  equipment from two additional Trusts that
qualify as variable  interest  entities  under FIN 46R.  The sole purpose of the
entities  is leasing  transportation  equipment  to  Corning.  Corning  has been
involved with these entities as lessee since the inception of the Trusts.  Lease
revenue  generated  by these  Trusts was $1.2  million and $1.2  million for the
quarters ended March 31, 2006 and 2005, respectively. Corning's maximum exposure
to loss  as a  result  of its  involvement  with  the  Trusts  is  estimated  at
approximately $16.0 million at March 31, 2006.

Stock-Based Compensation

In December  2004,  the  Financial  Accounting  Standards  Board  (FASB)  issued
Statement  of Financial  Accounting  Standards  (SFAS) No. 123  (revised  2004),
"Share-Based  Payment" (SFAS 123(R)),  which replaces SFAS No. 123,  "Accounting
for Stock-Based  Compensation" (SFAS 123), and supercedes  Accounting Principles
Board Opinion (APB) No. 25, "Accounting for Stock Issued to Employees" (APB 25).
SFAS 123(R) requires all share-based payments to employees,  including grants of
employee  stock  options,  to be recognized in the financial  statements at fair
value.  Corning  implemented  the  provisions  of SFAS 123(R) on January 1, 2006
following the "prospective  adoption"  transition  method and accordingly  began
expensing  share-based payments in the first quarter of 2006. Prior periods will
not be restated.

Corning grants  restricted shares and stock options that are subject to specific
vesting  conditions (e.g.,  three-year graded vesting).  The awards specify that
the  employee  will  continue  to vest in the  award  after  retirement  without
providing any additional service.  Corning accounts for this type of arrangement
by  recognizing  compensation  cost over the nominal  vesting period and, if the
employee retires before the end of the vesting period, recognizing any remaining
unrecognized  compensation  cost at the date of retirement (the "nominal vesting
period approach").

SFAS 123(R)  specifies that an award is vested when the employee's  retention of
the  award  is  no  longer  contingent  on  providing  subsequent  service  (the
"non-substantive  vesting period approach").  That would be the case for Corning
awards that vest when  employees  retire and are granted to retirement  eligible
employees.  Effective  January  1,  2006,  related  compensation  cost  must  be
recognized  immediately for awards granted to retirement  eligible  employees or
over the  period  from the  grant  date to the date  retirement  eligibility  is
achieved, if that is expected to occur during the nominal vesting period.

We  continue  to  follow  the  nominal  vesting  period  approach  for  any  new
share-based  awards  granted  prior to adopting SFAS 123(R) and will continue to
for the remaining  portion of unvested  outstanding  awards after  adopting SFAS
123(R).  Effective with the adoption of SFAS 123(R),  on January 1, 2006, we now
apply the  non-substantive  vesting  period  approach  to new  grants  that have
retirement eligibility provisions.

Refer  to Note  15  (Share-based  Compensation)  to the  Consolidated  Financial
Statements for additional information.

New Accounting Standards

In May  2005,  the FASB  issued  SFAS No.  154,  "Accounting  Changes  and Error
Corrections"  (SFAS  154),  which  replaces  APB  Opinion  No.  20,  "Accounting
Changes,"  (APB 20) and SFAS No. 3,  "Reporting  Accounting  Changes  in Interim
Financial  Statements." SFAS 154 changes the requirements for the accounting for
and reporting of a change in accounting principle. Upon the adoption of SFAS 154
beginning  January 1, 2006,  Corning  has  applied  the  standard's  guidance to
changes in  accounting  methods as  required.  The  adoption of SFAS 154 was not
material  to  Corning's   consolidated   results  of  operations  and  financial
condition.

In February 2006, the FASB issued SFAS No. 155,  "Accounting  for Certain Hybrid
Financial  Instruments - an amendment of FASB  Statements No. 133 and 140" (SFAS
155).  SFAS 155 is effective  for all financial  instruments  acquired or issued
after  January 1, 2007,  and amends SFAS No.  133,  "Accounting  for  Derivative
Instruments and Hedging Activities," and SFAS No. 140, "Accounting for Transfers
and  Servicing of Financial  Assets and  Extinguishments  of  Liabilities.  This
Statement  resolves issues addressed in Statement 133  Implementation  Issue No.
D1,  "Application  of  Statement  133 to  Beneficial  Interests  in  Securitized
Financial  Assets."  Corning  does not expect the adoption of SFAS 155 to have a
material  impact  on  its  consolidated  results  of  operations  and  financial
condition.






In March  2006,  the FASB  issued SFAS No. 156,  "Accounting  for  Servicing  of
Financial  Assets--an  amendment  of FASB  Statement  No. 140" (SFAS 156).  This
Statement  amends SFAS No. 140,  "Accounting  for  Transfers  and  Servicing  of
Financial  Assets  and  Extinguishments  of  Liabilities,"  with  respect to the
accounting for separately recognized servicing assets and servicing liabilities.
Corning adopted SFAS No. 156 on January 1, 2006. The impact of adopting SFAS 156
was not material to Corning's  consolidated  results of operations and financial
condition.

2.   Restatement of Prior Period Financial Statements

This Note should be read in conjunction with Note 2 of the Notes to Consolidated
Financial  Statements in the Company's  Annual Report on Form 10K/A for the year
ended December 31, 2005 filed May 9, 2006.

The Company's management and its audit committee  concluded,  on April 21, 2006,
that  the  Company  would  restate  previously  issued  consolidated   financial
statements to properly account for the asbestos settlement charges and liability
and for its investment in and equity earnings of Pittsburgh Corning Europe (PCE)
from March 31, 2003,  through  December  31, 2005.  The Company also changed the
classification  of  accretion  on a portion of the  liability to be paid in cash
from interest expense to asbestos settlement charge for the same time period.

On  March  28,  2003,  we  announced  that we had  reached  agreement  with  the
representatives  of asbestos  claimants  for the  settlement  of all current and
future asbestos claims against Corning and Pittsburgh Corning Corporation (PCC),
which might arise from PCC products or operations.  The proposed settlement,  if
the plan is approved and becomes  effective,  will require Corning to relinquish
its equity interest in PCC, contribute its equity interest in Pittsburgh Corning
Europe N.V.  (PCE), a Belgian  corporation,  and contribute 25 million shares of
Corning common stock.  Corning also agreed to make cash payments with a value of
$131  million,  in March  2003,  over six years from the  effective  date of the
settlement  and to assign  certain  insurance  policy  proceeds from its primary
insurance and a portion of its excess insurance at the time of the settlement.

Between March 31, 2003, and December 31, 2005, the following  accounting  errors
occurred:

..    Corning's  asbestos  settlement  charges and the related  liability for the
     asbestos  settlement  did not reflect the  estimated  fair value at initial
     recognition or subsequent  changes in fair value, of certain  components of
     the proposed settlement offer. As a result, asbestos settlement charges for
     the  years  2005,  2004,  and 2003 were  understated  by $13  million,  $24
     million,  and $117 million,  respectively,  and for the quarter ended March
     31, 2005 were understated $6 million.
..    Corning  incorrectly  suspended  recording  equity  earnings of PCE between
     March 31, 2003,  and December 31, 2005. As a result,  equity in earnings of
     affiliated  companies for the years 2005, 2004, and 2003 was understated by
     $13 million, $11 million, and $7 million, respectively, and for the quarter
     ended March 31, 2005 was understated $2 million.
..    Accretion  on  the  cash  portion  of the  asbestos  settlement  offer  was
     incorrectly recorded as interest expense resulting in both an overstatement
     of interest expense and an  understatement of asbestos  settlement  expense
     for the years  2005,  2004,  and 2003,  by $8 million,  $8 million,  and $5
     million,  respectively,  and for the  quarter  ended  March  31,  2005  was
     understated $2 million.

In the restated  financial  statements,  the higher asbestos  settlement charges
have been tax-effected in 2003 and the first half of 2004. As Corning provided a
valuation  allowance on most of its deferred tax assets in the third  quarter of
2004,  that  quarter  reflects  an increase in the  valuation  allowance  of $55
million for the deferred tax assets  related to the higher  asbestos  settlement
charges.

The  cumulative  effect of these  adjustments  to Corning's  balance sheet as of
December 31, 2005, resulted in an increase in investments in affiliate companies
of $32 million,  an increase to other accrued  liabilities  of $154 million,  an
increase to accumulated deficit of $123 million,  and an increase to accumulated
other comprehensive income of $1 million.

The Company has filed an amended Annual Report on Form 10-K/A for the year ended
December 31,  2005,  and amended  quarterly  reports on Form 10-Q/A for quarters
ended  September  30,  2005,  June 30,  2005,  and March 31, 2005 to restate its
historical financial statements for the periods affected.






The  impacts  of  the  restatement  adjustments  on the  consolidated  financial
statements for the comparative  periods  presented in this filing are summarized
below (in millions):



Consolidated Statements of Operations
Summary of Restatement Impact
(Unaudited; in millions, except per share amounts)
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                            For the three months ended
                                                                                                  March 31, 2005
                                                                                ----------------------------------------------------
                                                                                Previously
                                                                                 Reported          Adjustments        As Restated
                                                                                ----------         -----------        -----------
                                                                                                              
Operating expenses:
  Asbestos settlement                                                            $     16          $      (4)          $      12

Operating income (loss)                                                               139                 (4)                135

Interest expense                                                                       37                 (2)                 35

Income (loss) from before income taxes                                                103                 (2)                101
Provision for income taxes                                                            (19)                                   (19)
                                                                                 --------          ---------           ---------
Income (loss) before minority interests and equity earnings                            84                 (2)                 82

Equity in earnings of affiliated companies, net of impairments                        166                  3                 169

Net Income                                                                       $    249          $       1           $     250

Basic earnings per common share                                                  $   0.18                              $    0.18
Diluted earnings per common share                                                $   0.17                              $    0.17
- ------------------------------------------------------------------------------------------------------------------------------------








Consolidated Balance Sheets
Summary of Restatement Impact
(Unaudited; in millions)
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                              As of December 31, 2005
                                                                                ----------------------------------------------------
                                                                                Previously
                                                                                 Reported           Adjustments       As Restated
                                                                                ----------          -----------       -----------
                                                                                                             
Investments                                                                     $   1,697            $    32          $    1,729
  Total Assets                                                                  $  11,175            $    32          $   11,207

Other accrued liabilities                                                       $   1,508            $   154          $    1,662
  Total current liabilities                                                     $   2,216            $   154          $    2,370
    Total liabilities                                                           $   5,523            $   154          $    5,677

Accumulated deficit                                                             $  (6,724)           $  (123)         $   (6,847)
Accumulated other comprehensive income                                          $     177            $     1          $      178

    Total shareholders' equity                                                  $   5,609            $  (122)         $    5,487

Total Liabilities and Shareholders' Equity                                      $  11,175            $    32          $   11,207
- ------------------------------------------------------------------------------------------------------------------------------------




Consolidated Statements of Cash Flows
Summary of Restatement Impact
(Unaudited; in millions)
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                            For the three months ended
                                                                                                  March 31, 2005
                                                                                ----------------------------------------------------
                                                                                Previously
                                                                                 Reported          Adjustments        As Restated
                                                                                ----------         -----------        -----------
                                                                                                              
Cash Flows from Operating Activities:
Net income (loss)                                                                $    249          $       1           $     250
Adjustments to reconcile loss from continuing operations to net
  cash provided by operating activities:
      Asbestos settlement charge                                                      (16)                 4                 (12)
      Equity in earnings of affiliated companies
        (in excess of) less than dividends received                                   (23)                (3)                (26)
      Deferred tax (benefit) provision                                                  3                                      3
      Other, net                                                                       34                 (2)                 32
Net Cash Provided by Operating Activities                                        $    142          $       0           $     142
- ------------------------------------------------------------------------------------------------------------------------------------






3.   Restructuring, Impairment and Other Charges

2006 Actions



The  following   table  details  the  charges,   credits  and  balances  of  the
restructuring  reserves as of and for the three  months ended March 31, 2006 (in
millions):
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                         Remaining
                                                                        Revisions          Net           Cash           reserve at
                                                     January 1,        to existing      charges/       payments          March 31,
                                                        2006              plans        (reversals)      in 2006            2006
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                                          
Restructuring charges:
  Employee related costs                             $     36           $    7         $     7         $   (2)           $    41
  Other charges                                            49               (1)             (1)            (2)                46
                                                     ---------------------------------------------------------------------------
     Total restructuring charges                     $     85           $    6         $     6         $   (4)           $    87
                                                     ---------------------------------------------------------------------------

Total restructuring, impairment and other
  charges                                                               $    6         $     6
- ------------------------------------------------------------------------------------------------------------------------------------


2005 Actions

In the first quarter of 2005, we recorded a $19 million impairment charge for an
other-than-temporary  decline  in the fair  value of our  investment  in  Avanex
Corporation (Avanex).



The  following  table  illustrates  the  charges,  credits  and  balances of the
restructuring  reserves as of and for the three  months ended March 31, 2005 (in
millions):
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                   Three months                                          Remaining
                                                                    ended March            Net             Cash          reserve at
                                                January 1,           31, 2005           charges/         payments         March 31,
                                                   2005               charge           (reversals)        in 2005           2005
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           
Restructuring:
   Employee related costs                        $   18                                                   $    5          $    13
   Other charges                                     77                                                        4               73
                                                 --------------------------------------------------------------------------------
      Total restructuring charges                $   95                                                   $    9          $    86
                                                 --------------------------------------------------------------------------------

Impairment of assets:
   Impairment of available-for-sale
     securities                                                      $   19              $   19
                                                                     --------------------------
      Total impairment charges                                       $   19              $   19
                                                                     --------------------------

Total restructuring, impairment and
  other charges                                                      $   19              $   19
- ------------------------------------------------------------------------------------------------------------------------------------


Cash payments for employee related costs will be  substantially  complete by the
end of 2007, while payments for other charges will be substantially  complete by
the end of 2010.






4.   Commitments and Contingencies

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  asbestos  claims against us and Pittsburgh  Corning  Corporation  (PCC),
which might arise from PCC products or operations.  The proposed settlement,  if
the plan is approved and becomes  effective,  will require Corning to relinquish
its equity interest in PCC, contribute its equity interest in Pittsburgh Corning
Europe N.V.  (PCE), a Belgian  corporation,  and contribute 25 million shares of
Corning common stock.  Corning also agreed to make cash payments with a value of
$131  million,  in March  2003,  over six years from the  effective  date of the
settlement  and to assign  certain  insurance  policy  proceeds from its primary
insurance and a portion of its excess insurance at the time of the settlement.

The PCC Plan received a favorable vote from creditors in March 2004. Hearings to
consider  objections  to the PCC Plan were held in the  Bankruptcy  Court in May
2004.  The parties  filed  post-hearing  briefs and made oral  arguments  to the
Bankruptcy  Court in November 2004.  The Bankruptcy  Court allowed an additional
round of briefing to address current case law  developments and heard additional
oral  arguments on March 16, 2005. In mid-April  2005, the proponents of the PCC
Plan  requested that the court rule on the pending  objections.  On February 28,
2006, the Bankruptcy  Court requested the proponents to amend and refile the PCC
Plan. In late April 2006, the Bankruptcy Court allowed another round of briefing
on the objections  leading to additional oral arguments expected to be scheduled
in July  2006.  If the  Bankruptcy  Court does not  approve  the PCC Plan in its
current  form,  changes to the Plan are  probable as it is likely that the Court
will allow the  proponents  time to  propose  amendments.  The  outcome of these
proceedings is uncertain,  and  confirmation  of the current Plan or any amended
Plan is subject to a number of contingencies.  However, apart from the quarterly
mark-to-market  adjustment  in the value of the 25  million  shares  of  Corning
stock,  management  believes that the likelihood of a material adverse impact to
Corning's financial statements is remote.

As discussed in Note 2  (Restatement  of Prior Period  Financial  Statements) we
have  restated  prior  period  financial  statements  to correct the  accounting
related to the asbestos settlement.

In the first quarter of 2006, we recorded  asbestos  settlement  expense of $185
million,  including  $182  million  reflecting  the  increase  in the  value  of
Corning's  common stock from December 31, 2005 to March 31, 2006, and $3 million
to adjust the  estimated  fair  value of the other  components  of the  proposed
asbestos settlement.

In the first quarter of 2005, we recorded a credit of $12 million, including $16
million for the  decrease in the value of Corning's  common stock from  December
31, 2004 to March 31, 2005, and a $4 million charge to adjust the estimated fair
value of the other components of the proposed asbestos settlement.

If the book value of the assets to be  contributed  to the  asbestos  settlement
remains lower than their carrying value, as recorded in the asbestos  settlement
liability, a gain would be recognized at the time of settlement.

Since March 28, 2003,  we have recorded  total net charges of $1,003  million to
reflect the initial  settlement  liability and  subsequent  adjustments  for the
change in the fair value of the components of the liability.

The fair value of the liability  expected to be settled by  contribution  of our
investment  in PCE, the fair value of 25 million  shares of our common stock and
assigned  insurance  proceeds (in  aggregate  totaling $848 million at March 31,
2006) is recorded  in other  accrued  liabilities  in our  consolidated  balance
sheets.  As the timing of this  obligation's  settlement  will  depend on future
judicial  rulings  (i.e.,  controlled  by a third party and not  Corning),  this
portion  of the  PCC  liability  is  considered  a "due on  demand"  obligation.
Accordingly,  this portion of the  obligation  has been  classified as a current
liability, even though it is possible that the contribution could be made beyond
one year.  The remaining  portion of the  settlement  liability  (totaling  $155
million  at March 31,  2006),  representing  the net  present  value of the cash
payments,  is recorded in the other  liabilities  component in our  consolidated
balance sheets.






Other Commitments and Contingencies

In the normal course of our business,  we do not routinely  provide  significant
third-party guarantees.  When provided, these guarantees have various terms, and
none of these guarantees are individually  significant.  Generally,  third party
guarantees  provided  by Corning  are  limited to certain  financial  guarantees
including  stand-by letters of credit and performance  bonds, and the incurrence
of contingent  liabilities in the form of purchase price  adjustment  related to
attainment of milestones.

We have also agreed to provide a credit facility to Dow Corning Corporation (Dow
Corning) as discussed in Note 7 to the consolidated  financial statements in our
2005 Form 10-K/A. The funding of the Dow Corning $150 million credit facility is
subject to events connected to the Dow Corning Bankruptcy Plan.

As of March 31,  2006,  contingent  guarantees  at notional  value  totaled $341
million,  compared  with  $339  million  at  December  31,  2005.  We also  were
contingently  liable for purchase  obligations of $174 million and $219 million,
at March 31, 2006 and December 31, 2005, respectively.  We believe a significant
majority of these  guarantees  and  contingent  liabilities  will expire without
being funded.

Corning  is  a  defendant   in  various   lawsuits,   including   environmental,
product-related  suits,  the Dow Corning and PCC matters  discussed in Note 7 to
the consolidated financial statements in our 2005 Form 10-K/A, and is subject to
various  claims which arise in the normal course of business.  In the opinion of
management,  the likelihood that the ultimate  disposition of these matters will
have a material  adverse effect on Corning's  consolidated  financial  position,
liquidity or results of operations, is remote.

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  $13  million   (undiscounted)  for  the  estimated
liability for environmental cleanup and related litigation at December 31, 2005.
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.

In August 2005,  Corning was named as a fourth party defendant in a class action
claiming an unspecified  amount of damages and asserting various personal injury
and  property  damage  claims  against a number of  corporate  defendants  which
allegedly  arise from the release of  solvents  from the  operations  of several
manufacturers  at  the  Ellsworth  Industrial  Park,  located  in the  state  of
Illinois,  into soil and ground  water.  In March 2006,  Corning was named as an
additional  party  defendant in two actions,  claiming an unspecified  amount of
damages and  asserting  personal  injury and wrongful  death against a number of
corporate  defendants  as a result of  alleged  ground  water  contamination  by
releases of hazardous  substances from the same  manufacturing  operations.  The
sole basis of  liability  against  Corning in all of these cases is the claim of
several  corporate  defendants  that Corning is the  successor  to  Harper-Wyman
Company.  Corning  has  denied  these  allegations  and  management  intends  to
vigorously  contest all claims against Corning.  Corning is currently  assessing
its potential  liability and, as such, an estimate of any possible loss or range
of loss cannot be made at this time.






5.   Debt

In the first quarter of 2005, we completed the following debt transactions:
..    We obtained a loan of approximately $48 million,  bearing interest at 2.1%,
     from a Japanese bank. This loan is part of a 10-year loan agreement entered
     into in 2004 to fund certain capital expansion activities in Japan.
..    We redeemed $100 million of our outstanding 3.50%  convertible  debentures,
     due November 1, 2008. The bondholders  affected by this redemption  elected
     to convert $98 million of their  debentures  into Corning common stock at a
     conversion  ratio  of  103.3592  shares  per  $1,000  debenture,  with  the
     remaining $2 million  repaid in cash.  Separately,  bondholders  elected to
     convert  approximately  $6 million of outstanding  debentures  into Corning
     common stock.  In total, we issued 11 million shares upon the conversion of
     the debentures, resulting in an increase to equity of $105 million.
..    We repaid a total of $192 million of notes in accordance  with their stated
     repayment schedule. This was primarily comprised of our 5.625% Euro notes.

6.   Income Taxes

Our (benefit) provision for income taxes and the related tax rates follow (in
millions):
- --------------------------------------------------------------------------------
                                                  Three months ended March 31,
                                                --------------------------------
                                                  2006                   2005
- --------------------------------------------------------------------------------

(Benefit) provision for income taxes            $    (2)               $    19
Effective tax rate                                (3.6%)                  18.8%
- --------------------------------------------------------------------------------

For the three  months  ended  March 31,  2006,  the tax  benefit  reflected  the
following items:
..    The impact of our inability to record tax benefits on net operating  losses
     generated in the U.S. and certain foreign jurisdictions;
..    The release of a valuation  allowance  on a portion of our German trade tax
     benefits; and
..    The  benefit  of tax  holidays  and  investment  credits  in Taiwan and tax
     holidays in China.

As more fully described in Note 7 (Income Taxes) to the  consolidated  financial
statements  of the 2005 Form  10-K/A,  most of  Corning's  deferred  tax assets,
primarily in the U.S. and Germany, were fully reserved at December 31, 2005. For
the three months ended March 31, 2006, we released a valuation  allowance of $38
million on a portion of our German tax benefits due to achieving an  appropriate
level of  profitability  in  certain  of our  German  operations  leading  us to
conclude  that it is more  likely  than not that tax  benefits  are  realizable.
Otherwise,  we expect to maintain a valuation  allowance  on future tax benefits
until an  appropriate  level of  profitability  is  sustained  or we are able to
develop tax  planning  strategies  that  enable us to  conclude  that it is more
likely than not that our deferred tax assets are realizable. Until then, our tax
provision  will  generally  include  only the net tax  expense  attributable  to
certain foreign operations.

Certain foreign subsidiaries in China and Taiwan are operating under tax holiday
arrangements.  The nature and extent of such arrangements vary, and the benefits
of such arrangements phase out in various years (2007 through 2010) according to
the  specific  terms and  schedules of the relevant  taxing  jurisdictions.  The
impact of the tax holidays on our  effective tax rate is a reduction in the rate
of 38% and 7% for the three months ended March 31, 2006 and 2005, respectively.






7.   Earnings Per Common Share



The  reconciliation  of the amounts  used in the basic and diluted  earnings per
common share computations follows (in millions, except per share amounts):
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                               Three months ended March 31,
                                                     -------------------------------------------------------------------------------
                                                                     2006                                    2005
                                                     -------------------------------------     -------------------------------------
                                                                  Weighted-      Per Share                 Weighted-       Per Share
                                                     Income     Average Shares    Amount       Income    Average Shares     Amount
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                                          
Basic earnings per common share                      $  257        1,541          $  0.17      $  250         1,411         $  0.18
- ------------------------------------------------------------------------------------------------------------------------------------

Effect of dilutive securities:
   Stock options                                                      51                                         31
   7% mandatory convertible preferred stock                                                                      32
   3.50% convertible debentures                                                                     2            29
- ------------------------------------------------------------------------------------------------------------------------------------

Diluted earnings per common share                    $  257        1,592          $  0.16      $  252         1,503         $  0.17
- ------------------------------------------------------------------------------------------------------------------------------------


The following  potential  common shares were  excluded from the  calculation  of
diluted 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 ended March 31,
                                                    ----------------------------
                                                        2006             2005
- --------------------------------------------------------------------------------

Potential common shares excluded from the
  calculation of diluted earnings per
  common share:
     4.875% convertible notes                                              6
     Zero coupon convertible debentures                                    3
                                                     -----------------------
     Total                                                                 9
                                                     =======================

Stock options excluded from the calculation
  of diluted earnings per share because
  the exercise price was greater than the
  average market price of the common shares             27               63
- --------------------------------------------------------------------------------

8.   Significant Customer

For the three months ended March 31, 2006,  AU Optronics  Corporation  (AUO),  a
customer of our Display Technologies  segment,  represented 10% of the company's
consolidated  net sales.  On April 7, 2006,  AUO announced that it had signed an
agreement to merge  Quanta  Display Inc.  (QDI),  another  customer of Corning's
Display Technologies  segment,  with and into AUO. The consolidation date of the
merger is targeted  for October 1, 2006.  For the three  months  ended March 31,
2006, sales to QDI represented 4% of Corning's consolidated revenues. There were
no  customers  in the  first  quarter  of 2005 that  represented  10% or more of
consolidated sales.

9.   Inventories

Inventories comprise the following (in millions):
- --------------------------------------------------------------------------------
                                      March 31, 2006           December 31, 2005
- --------------------------------------------------------------------------------
Finished goods                            $   120                   $   135
Work in process                               226                       198
Raw materials and accessories                 144                       124
Supplies and packing materials                126                       113
- --------------------------------------------------------------------------------
Total inventories                         $   616                   $   570
- --------------------------------------------------------------------------------






10.  Investments



Investments comprise the following (in millions):
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                      Ownership            March 31,             December 31,
                                                                      Interest               2006                    2005
                                                                     ------------          ---------             -----------
                                                                                                           
Affiliated companies accounted for by the equity method
     Samsung Corning Precision Glass Co., Ltd.                            50%               $   985                 $   859
     Dow Corning Corporation                                              50%                   546                     473
     Samsung Corning Co., Ltd.                                            50%                   217                     231
     All other                                                        25%-51% (a)               177                     162
                                                                                            -------                 -------
                                                                                              1,925                   1,725
Other investments                                                                                 4                       4
                                                                                            -------                 -------
Total                                                                                       $ 1,929                 $ 1,729
- ------------------------------------------------------------------------------------------------------------------------------------


(a)  Amounts  reflect  Corning's  direct  ownership  interests in the respective
     affiliated  companies.  Corning does not control any such entities.  In the
     cases where  Corning  owns over 50% of the voting  stock of another  entity
     accounted for by the equity method,  Corning does not have control  because
     the other equity owner has significant participatory rights.

Related  party  information  for these  investments  in  affiliates  follows (in
millions):
- --------------------------------------------------------------------------------
                                                   Three months ended March 31,
                                                   ----------------------------
                                                       2006            2005
- --------------------------------------------------------------------------------
Related Party Transactions:
     Corning sales to affiliates                     $    12          $   28
     Corning purchases from affiliates               $    21          $   12
     Dividends received from affiliates              $   129          $  134
     Royalty income from affiliates                  $    25          $   17
     Corning transfers of assets,
       at cost, to affiliates                        $    13          $   20

- --------------------------------------------------------------------------------
                                                     March 31,      December 31,
                                                       2006            2005
- --------------------------------------------------------------------------------
Related Party Amounts:
     Balances due from affiliates                    $     6          $   34
     Balances due to affiliates                      $    14          $   45

- --------------------------------------------------------------------------------

We have  contractual  agreements  with  several  of our equity  investees  which
include sales, purchasing, licensing and technology agreements.






Summarized results of operations for our three significant investments accounted
for by the equity method follow:

Samsung Corning Precision Glass Co., Ltd. (Samsung Corning Precision)
Samsung Corning Precision is a South Korea-based  manufacturer of liquid crystal
display glass for flat panel displays.  Samsung Corning  Precision's  results of
operations follow (in millions):
- --------------------------------------------------------------------------------
                                                    Three months ended March 31,
                                                    ----------------------------
                                                         2006            2005
- --------------------------------------------------------------------------------

Statement of Operations
  Net sales                                           $   495          $  317
  Gross profit                                        $   362          $  237
  Net income                                          $   285          $  165
  Corning's equity in earnings of
    Samsung Corning Precision                         $   140          $   80

Related Party Transactions:
- --------------------------------------------------------------------------------
  Corning sales to Samsung Corning Precision          $    10          $   27
  Corning purchases from Samsung Corning Precision    $    17          $    8
  Dividends received from Samsung Corning Precision   $   126          $  108
  Royalty income from Samsung Corning Precision       $    19          $   13
  Corning transfers of machinery and equipment to
    Samsung Corning Precision at cost (a)             $    13          $   20
- --------------------------------------------------------------------------------

(a)  Corning  purchases  machinery  and  equipment on behalf of Samsung  Corning
     Precision to support its capital expansion  initiatives.  The machinery and
     equipment are transferred to Samsung  Corning  Precision at our cost basis,
     resulting in no revenue or gain being recognized on the transaction.

As of March 31,  2006,  balances  due from Samsung  Corning  Precision  were $12
million.  No amounts were due to Samsung Corning Precision as of March 31, 2006.
As of December 31, 2005, balances due to and from Samsung Corning Precision were
$41 million and $18 million, respectively.

As of December 31, 2005, Samsung Corning Precision and Samsung Corning Co., Ltd.
were two of approximately 30 co-defendants in a lawsuit filed by Seoul Guarantee
Insurance Co. and 14 other creditors. Refer to Samsung Corning Co., Ltd. section
of this note for additional information.

In  February  2006,  Corning  made a capital  contribution  to  Samsung  Corning
Precision  in the amount of 75 billion  Korean won  (approximately  $77  million
USD). Our ownership percentage was not affected by this capital contribution.

Dow Corning Corporation (Dow Corning)
Dow Corning is a U.S. based  manufacturer  of silicone  products.  Dow Corning's
results of operations follow (in millions):
- --------------------------------------------------------------------------------
                                                   Three months ended March 31,
                                                   -----------------------------
                                                     2006               2005
- --------------------------------------------------------------------------------

Statement of Operations:
  Net sales                                        $  1,027            $  983
  Gross profit                                     $    352            $  346
  Net income                                       $    138            $  136
  Corning's equity in earnings of Dow Corning      $     69            $   68
- --------------------------------------------------------------------------------

Related Party Transactions:
- --------------------------------------------------------------------------------
  Corning purchases from Dow Corning               $      3            $    3
- --------------------------------------------------------------------------------

Balances  due to and from Dow Corning  were each $1 million as of March 31, 2006
and each $1 million as of December 31, 2005.






Corning and The Dow Chemical  Company (Dow  Chemical) each own 50% of the common
stock of Dow Corning.  In May 1995, Dow Corning filed for bankruptcy  protection
to address  pending and claimed  liabilities  arising from many thousand  breast
implant product  lawsuits.  On June 1, 2004, Dow Corning emerged from Chapter 11
with a Plan of  Reorganization  (the Plan) which  provided for the settlement or
other resolution of implant claims.  The Plan also includes releases for Corning
and Dow Chemical as shareholders in exchange for contributions to the Plan.

Under  the terms of the Plan,  Dow  Corning  has  established  and is  funding a
Settlement Trust and a Litigation Facility to provide a means for tort claimants
to settle or litigate their claims. Inclusion of insurance, Dow Corning has paid
approximately  $1.6 billion to the Settlement  Trust.  As of March 31, 2006, Dow
Corning had recorded a reserve for breast implant litigation of $1.8 billion and
anticipates insurance receivables of $242 million.  Certain commercial creditors
have appealed from the denial of their claim for  approximately  $80 million for
interest at default rates and enforcement  costs. This appeal was argued in July
2005 and awaits  decision.  In  addition,  Dow Corning is  vigorously  resisting
claims by the U.S Internal  Revenue  Service  asserting tax  deficiencies of $65
million  relating  to its 1995 and 1996  federal  income  tax  returns  and $117
million with respect to its 1997,  1998 and 1999  returns.  Dow Corning  expects
that  these  IRS  claims  will be  resolved  for  substantially  less  than  the
deficiencies  claimed.  There  are a number of other  claims  in the  bankruptcy
proceedings  against Dow Corning awaiting resolution by the U.S. District Court,
and it is  reasonably  possible  that Dow Corning may record  bankruptcy-related
charges in the future. There are no remaining tort claims against Corning, other
than those that will be channeled by the Plan into facilities established by the
Plan or otherwise defended by the Litigation Facility.

In 1995, Corning fully impaired its investment in Dow Corning after it filed for
bankruptcy  protection.  Corning did not recognize net 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 Dow
Corning's  emergence  from  bankruptcy  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.

As part of their  contributions to the Plan,  Corning and Dow Chemical have each
agreed to  provide a  ten-year  credit  facility  to Dow  Corning  of up to $150
million ($300 million in the aggregate),  subject to the terms and conditions of
the Plan.

Corning received $45 million in dividends from Dow Corning in 2005.

Other - Samsung Corning Co., Ltd. (Samsung Corning)
Samsung Corning is a South Korea-based  manufacturer of glass panels and funnels
for cathode ray tube (CRT) television and display monitors.

Samsung Corning's results of operations follow (in millions):
- --------------------------------------------------------------------------------
                                                    Three months ended March 31,
                                                    ----------------------------
                                                       2006               2005
- --------------------------------------------------------------------------------

Statement of Operations:
     Net sales                                        $  185            $  230
     Gross profit                                     $    8            $   47
     Net (loss) income                                $   (2)           $   12
     Corning's equity in (losses)
       earnings of Samsung Corning                    $  (22)           $    9
- --------------------------------------------------------------------------------

Related Party Transactions:
- --------------------------------------------------------------------------------
     Dividends received from Samsung Corning                                22
- --------------------------------------------------------------------------------

During the first  quarter of 2006,  Corning  reduced its  investment  in Samsung
Corning by $21 million due to an  impairment of  long-lived  assets  incurred by
Samsung Corning.  This impairment  charge also reduced Corning's equity earnings
from Samsung Corning by $21 million.






In the third quarter of 2005,  Samsung  Corning  incurred  impairment  and other
charges  of $212  million as a result of a decline  in the  projected  operating
results  for  its  CRT  glass  business.  The  charge,  which  included  certain
manufacturing  assets and severance  and exit costs,  reduced  Corning's  equity
earnings by $106 million in the third  quarter.  None of the charges is expected
to result in cash expenditures by Corning.

In 2003 and 2005,  Samsung Corning  recorded  significant  fixed asset and other
impairment charges. In the first quarter of 2006 an additional impairment charge
of $21 million was recognized.  As the conventional television glass market will
be  negatively  impacted  by  strong  growth  in the  LCD  glass  market,  it is
reasonably  possible that Samsung Corning may incur additional  restructuring or
impairment  charges  or  operating  losses in the  foreseeable  future.  Samsung
Corning is currently  investing in several  developing  businesses which Samsung
Corning management  believes will offset the decline in conventional  television
glass  market  over time.  Should  these new  businesses  not  achieve  expected
results,  additional  operating  losses,  asset  impairments  and  restructuring
charges are likely to occur or Samsung Corning's  long-term  financial viability
may come into  question.  These  events  could  result in Corning  incurring  an
impairment of its investment in Samsung Corning.  Corning management believes it
is more likely than not that an impairment of our  investment  will occur in the
foreseeable future.  Corning's investment in Samsung Corning was $217 million at
March 31, 2006.

As of December 31, 2005,  Samsung Corning Precision and Samsung Corning were two
of  approximately  30  co-defendants  in a  lawsuit  filed  by  Seoul  Guarantee
Insurance Co. and 14 other  creditors  (SGI and Creditors) for alleged breach of
an agreement that  approximately  thirty affiliates of the Samsung group entered
into with SGI and  Creditors  in September  1999.  The lawsuit is pending in the
courts of Korea.  According to the agreement,  the Samsung  affiliates agreed to
sell 3.5 million  shares of Samsung Life  Insurance  Co., Ltd. (SLI) by December
31, 2000,  which were  transferred  to SGI and Creditors in connection  with the
petition for court  receivership  of Samsung Motor Inc. In the lawsuit,  SGI and
Creditors  allege that, in the event that the proceeds of sale of the SLI shares
is less than 2.45 trillion Korean won (approximately $2.42 billion), the Samsung
affiliates  allegedly  agreed to compensate SGI and Creditors for the shortfall,
by other means, including Samsung affiliates' purchase of equity or subordinated
debentures  to be issued by SGI and  Creditors.  Any excess  proceeds  are to be
distributed  to the  Samsung  affiliates.  As of March 31,  2005,  the shares of
Samsung Life  Insurance  Co., Ltd. have not been sold. The suit asks for damages
of approximately $4.68 billion plus penalty interest.  Samsung Corning Precision
and Samsung Corning  combined  guarantees  should represent no more than 3.1% of
the Samsung  affiliates'  total financial  obligation.  Although noting that the
outcome of these matters is  uncertain,  Samsung  Corning  Precision and Samsung
Corning  have stated  that these  matters are not likely to result in a material
ultimate loss to their financial statements.  No claim in these matters has been
asserted against Corning.

11.  Goodwill and Other Intangibles Assets



The changes in the carrying  amount of goodwill for the three months ended March
31, 2006 follow (in millions):
- ------------------------------------------------------------------------------------------------------------------------------------
                                                    Telecom-              Display
                                                   munications          Technologies           Other (1)             Total
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                                       
Balance at January 1, 2006                         $     118               $     9             $     150           $    277
Foreign currency translation and other
- ------------------------------------------------------------------------------------------------------------------------------------
Balance at March 31, 2006                          $     118               $     9             $     150           $    277
- ------------------------------------------------------------------------------------------------------------------------------------


(1) This balance relates to our Specialty Materials operating segment.







Other intangible assets follow (in millions):
- ------------------------------------------------------------------------------------------------------------------------------------
                                                          March 31, 2006                             December 31, 2005
                                                 -------------------------------------------------------------------------------
                                                           Accumulated                                  Accumulated
                                                 Gross     Amortization      Net             Gross      Amortization      Net
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                                      
Amortized intangible assets:
     Patents and trademarks                      $  143       $    91      $    52           $  143       $   88        $    55
     Non-competition agreements                     112           112                           111          111
     Other                                            4                          4                4            1              3
                                                 ----------------------------------          -----------------------------------
       Total amortized intangible assets            259           203           56              258          200             58
                                                 ----------------------------------          -----------------------------------

Unamortized intangible assets:
     Intangible pension assets                        3                          3                3                           3
                                                 ----------------------------------          -----------------------------------
Total                                            $  262       $   203      $    59           $  261       $  200        $    61
- ------------------------------------------------------------------------------------------------------------------------------------


Amortized  intangible  assets are  primarily  related to the  Telecommunications
segment.

Estimated amortization expense related to these intangible assets is $13 million
in the year 2006, $12 million in 2007,  $11 million in 2008,  and  insignificant
thereafter.

12.  Customer Deposits

In 2005 and 2004, several of Corning's customers entered into long-term purchase
and supply  agreements  in which  Corning's  Display  Technologies  segment will
supply  large-size glass substrates to these customers over periods of up to six
years.  As part of the agreements,  these customers  agreed to make advance cash
deposits to Corning for a portion of the  contracted  glass to be purchased.  In
the first  quarter  of 2006,  we  received a total of $13  million  of  deposits
against orders.

Upon  receipt  of the cash  deposits  made by  customers,  we record a  customer
deposit liability. This liability is reduced at the time of future product sales
over the life of the  agreements.  As product is shipped to a customer,  Corning
recognizes  revenue at the  selling  price and issues  credit  memoranda  for an
agreed  amount of the  customer  deposit  liability.  The credit  memoranda  are
applied against customer  receivables  resulting from the sale of product,  thus
reducing  operating cash flows in later periods as these credits are applied for
cash deposits received in earlier periods.



Customer  deposits  have been or will be received in the  following  periods (in
millions):
- ------------------------------------------------------------------------------------------------------------------------------------
                                                             Three months ended         Remainder      Estimated 2007
                                    2004         2005          March 31, 2006            of 2006         and Beyond         Total
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                                          
Customer deposits received          $204         $457                $13                  $160              $105            $939
- ------------------------------------------------------------------------------------------------------------------------------------


The majority of customer  deposits  will be received  through  2006. In 2005, we
began  issuing  credit  memoranda  which totaled $29 million for the fiscal year
2005 and $21  million  for the first  quarter  of 2006.  These  credits  are not
included in the above amounts.

Customer  deposit  liabilities  were $584  million and $595 million at March 31,
2006 and December 31, 2005, respectively, of which $184 million and $40 million,
respectively,  were recorded in the current portion of other accrued liabilities
in our consolidated balance sheets.

In the event customers do not make all customer deposit installment  payments or
elect not to purchase the agreed upon quantities of product, subject to specific
conditions outlined in the agreements, Corning may retain certain amounts of the
customer deposits.  If Corning does not deliver agreed upon product  quantities,
subject to  specific  conditions  outlined  in the  agreements,  Corning  may be
required to return certain amounts of customer deposits.






13.  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                               Three months
                                                   ended March 31,                            ended March 31,
                                             -------------------------                   ------------------------
                                               2006             2005                       2006             2005
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                              
Service cost                                 $   19            $   16                    $    3           $   2
Interest cost                                    33                45                        12              12
Expected return on plan assets                  (41)              (52)
Amortization of net loss                          9                 1                         3               1
Amortization of prior service cost                2                10                        (1)             (2)
- ------------------------------------------------------------------------------------------------------------------------------------
Total expense                                $   22            $   20                    $   17           $  13
- ------------------------------------------------------------------------------------------------------------------------------------


Corning and certain of its domestic subsidiaries also offer postretirement plans
that provide health care and life  insurance  benefits for retirees and eligible
dependents.  Certain  employees  may  become  eligible  for such  postretirement
benefits upon reaching  retirement  age. Prior to January 1, 2003, our principal
retiree  medical plans  required  retiree  contributions  each year equal to the
excess of medical cost increases over general  inflation  rates.  In response to
rising health care costs, effective January 1, 2003, we changed our cost-sharing
approach for retiree medical coverage. For current retirees (including surviving
spouses) and active employees eligible for the salaried retiree medical program,
we are placing a "cap" on the amount we will  contribute  toward retiree medical
coverage in the future. The cap will equal 120% of our 2005 contributions toward
retiree medical benefits. Once our contributions toward salaried retiree medical
costs reach this cap,  impacted  retirees  will have to pay the excess amount in
addition to their regular contributions for coverage.

14.  Hedging Activities

We operate and conduct  business in many foreign  countries  and as a result are
exposed to  movements  in foreign  currency  exchange  rates.  Our  exposure  to
exchange rate effects includes:

..    exchange  rate  movements  on  financial   instruments   and   transactions
     denominated in foreign currencies which impact earnings, and
..    exchange  rate  movements   upon   conversion  of  net  assets  in  foreign
     subsidiaries  for which the  functional  currency  is not the U.S.  dollar,
     which impact our net equity.

Our most significant  foreign currency exposures relate to Japan,  Korea, Taiwan
and western  European  countries.  We  selectively  enter into foreign  exchange
forward and option contracts with durations generally 15 months or less to hedge
our exposure to exchange rate risk on foreign source income and  purchases.  The
objective  of these  contracts  is to  neutralize  the impact of  exchange  rate
movements on our operating results.

We engage in foreign currency hedging activities to reduce the risk that changes
in exchange  rates will adversely  affect the eventual net cash flows  resulting
from the sale of  products  to foreign  customers  and  purchases  from  foreign
suppliers.  The hedge contracts  reduce the exposure to fluctuations in exchange
rate movements  because the gains and losses  associated  with foreign  currency
balances  and  transactions  are  generally  offset with gains and losses of the
hedge  contracts.  Because the impact of movements in foreign  exchange rates on
the value of hedge contracts  offsets the related impact on the underlying items
being hedged,  these  financial  instruments  help alleviate the risk that might
otherwise result from currency exchange rate fluctuations.






The following table  summarizes the notional  amounts and respective fair values
of Corning's derivative financial instruments, which mature at varying dates, at
March 31, 2006 (in millions):
- --------------------------------------------------------------------------------
                                         Notional Amount             Fair Value
- --------------------------------------------------------------------------------
Foreign exchange forward contracts          $ 1,241                     $  19
Foreign exchange option contracts           $   385                     $   8
- --------------------------------------------------------------------------------

The  forward  and option  contracts  we use in  managing  our  foreign  currency
exposures contain an element of risk in that the counterparties may be unable to
meet the terms of the agreements. However, we minimize this risk by limiting the
counterparties   to  a  diverse  group  of   highly-rated   major  domestic  and
international   financial  institutions  with  which  we  have  other  financial
relationships.   We  are   exposed   to   potential   losses  in  the  event  of
non-performance by these counterparties; however, we do not expect to record any
losses  as a result  of  counterparty  default.  We do not  require  and are not
required to place collateral for these financial instruments.

In the second  quarter  of 2005,  Corning  began  using  derivative  instruments
(forwards)  to limit the exposure to foreign  currency  fluctuations  associated
with certain monetary assets and liabilities.  These derivative  instruments are
not designated as hedging  instruments for accounting purposes and, as such, are
referred to as  undesignated  hedges.  Changes in the fair value of undesignated
hedges  are  recorded  in  current  period  earnings  in the other  income,  net
component,  along with the foreign  currency  gains and losses  arising from the
underlying  monetary assets or  liabilities,  in the  consolidated  statement of
operations.  At  March  31,  2006,  the  notional  amount  of  the  undesignated
derivatives was $527 million.

Cash Flow Hedges
- ----------------
Corning has cash flow hedges that relate to foreign  exchange forward and option
contracts.  The  critical  terms of each cash flow  hedge are  identical  to the
critical  terms of the hedged  item.  Therefore,  Corning  utilizes the critical
terms test under SFAS 133,  "Accounting  for Derivative  Instruments and Hedging
Activities"  (SFAS  133),  and  the  presumption  is  that  there  is  no  hedge
ineffectiveness  as long as the critical  terms of the hedge and the hedged item
do not change. During the first quarter of 2006, the critical terms of the hedge
and the hedged item did not change.  We did not have any gain or loss from hedge
ineffectiveness.  We did not exclude any  components  of a hedge's  gain or loss
from the assessment of hedge effectiveness.

Corning defers net gains and losses from cash flow hedges into accumulated other
comprehensive  income on the consolidated  balance sheet, until such time as the
hedged item impacts  earnings.  At that time Corning  reclassifies net gains and
losses  from  cash  flow  hedges  into the same  line  item of the  consolidated
statement of  operations  as where the effects of the hedged item are  recorded,
typically sales, cost of sales, or royalty income. Amounts are reclassified from
accumulated other  comprehensive  income when the underlying hedged item impacts
earnings. At March 31, 2006, the amount of net gains expected to be reclassified
into earnings within the next 12 months is $21 million.

Fair Value Hedges
- -----------------
Corning  records net gains and losses from fair value  hedges into the same line
item of the  consolidated  statement of  operations  as where the effects of the
hedged item are  recorded.  There were no  outstanding  fair value  hedges as of
March 31, 2006, or December 31, 2005.

Net Investment in Foreign Operations
- ------------------------------------
We have issued foreign  currency  denominated debt that has been designated as a
hedge of the net investment in a foreign operation. The effective portion of the
changes  in fair  value  of the  debt  is  reflected  as a  component  of  other
accumulated  comprehensive  income  (loss)  as  part  of  the  foreign  currency
translation  adjustment.  Net  losses  included  in the  cumulative  translation
adjustment  at March 31, 2006 and  December  31, 2005 were $111 million and $107
million, respectively.






15.  Share-based Compensation

Stock Compensation Plans

Corning's  share-based  compensation  programs include the following:  incentive
stock options, time-based restricted stock,  performance-based  restricted stock
and the Worldwide  Employee Stock Purchase Plan (WESPP).  At March 31, 2006, our
stock  compensation  programs were in accordance  with the 2005 Employee  Equity
Participation  Program  and the  2003  Equity  Plan for  Non-Employee  Directors
Program.  Any  ungranted  shares from prior years will be available for grant in
the current year. Any remaining shares available for grant, but not yet granted,
will be carried over and used in the following  year.  At March 31, 2006,  there
were 106 million shares available for grant.

On January 1, 2006 the Company  adopted  SFAS 123(R).  SFAS 123(R)  requires the
measurement  and recognition of  compensation  cost for all share-based  payment
awards made to  employees  and  directors,  including  grants of employee  stock
options and employee stock  purchases  related to the WESPP,  based on estimated
fair values.  Prior to the adoption of SFAS 123(R),  the Company  accounted  for
share-based  awards to employees and directors  using the intrinsic value method
in accordance  with APB 25 as allowed under SFAS 123. Under the intrinsic  value
method,  no  share-based  compensation  cost  related to stock  options had been
recognized in the Company's Consolidated  Statements of Operations,  because the
exercise price was at least equal to the market value of the common stock on the
grant date. As a result,  the recognition of share-based  compensation  cost was
generally  limited to the expense  attributed  to restricted  stock awards,  and
stock option modifications. SFAS 123(R) is a revision of SFAS 123 and supercedes
APB 25.

The  Company  elected to use the  modified  prospective  transition  method upon
adoption of SFAS  123(R),  which  requires  the  application  of the  accounting
standard as of January 1, 2006, the first day of the Company's fiscal year 2006.
In accordance with the modified  prospective  transition  method,  the Company's
Consolidated  Financial  Statements  for prior periods have not been restated to
reflect, and do not include, the impact of SFAS 123(R).

For share-based payment grants beginning December 1, 2005, the Company estimated
the fair value of such grants  using a  lattice-based  option  valuation  model.
Prior to December 1, 2005,  the Company  estimated the fair value of share-based
payment awards using the Black-Scholes option pricing model. Prior to January 1,
2006,  these fair values were  utilized in  developing  the  Company's pro forma
disclosure information required under SFAS 123.

Under SFAS 123(R), for share-based  payment awards granted subsequent to January
1, 2006, the fair value of awards are expected to ultimately  vest is recognized
as expense over the requisite service periods.  SFAS 123(R) requires forfeitures
to be  estimated  at the time of the grant in order to  estimate  the  amount of
share-based payment awards that will ultimately vest. Forfeiture rates are based
on historical  rates.  The estimated  forfeiture rate will be adjusted if actual
forfeitures  differ  from its  original  estimates.  The effect of any change in
estimated   forfeitures  would  be  recognized  through  a  cumulative  catch-up
adjustment  that would be  included  in  compensation  cost in the period of the
change in estimate.  For share-based  payment awards granted prior to January 1,
2006,  the Company will  recognize  the  remaining  unvested  SFAS 123 pro forma
expense according to their remaining vesting conditions.

Share-based  compensation cost recognized under SFAS 123(R) for the three months
ended March 31, 2006 was $32 million,  and included (i) employee  stock options,
(ii) time-based restricted stock, (iii)  performance-based  restricted stock and
(iv) the WESPP.  Compensation  cost was included in operating  activities on the
consolidated statements of cash flows for the three months ended March 31, 2006.
No tax benefits were attributed to the share-based  compensation  cost because a
valuation  allowance  was  maintained  for  substantially  all net  deferred tax
assets.






On November 10,  2005,  The FASB issued FASB Staff  Position No. SFAS  123(R)-3,
"Transition  Election  Related to  Accounting  for Tax  Effects  of  Share-Based
Payment Awards." The alternative method includes simplified methods to establish
the beginning balance of the additional paid-in capital pool (APIC pool) related
to the tax effects of employee  share-based  compensation,  and to determine the
subsequent impact on the APIC pool and Consolidated  Statements of Cash Flows of
the tax effects of employee share-based compensation awards that are outstanding
upon  adoption of SFAS 123(R).  The Company may take up to one year from initial
adoption of SFAS 123(R) to evaluate its available  transition  alternatives  and
make its on-time election.

Share-based  compensation expense reduced the Company's results of operations as
follows (in millions, except per share amounts):
- --------------------------------------------------------------------------------
                                                              Three months ended
                                                                March 31, 2006

- --------------------------------------------------------------------------------
Income from continuing operations before income taxes             $     32
- --------------------------------------------------------------------------------
Income from continuing operations                                 $     32
- --------------------------------------------------------------------------------
Net income available to common stockholders                       $     32
- --------------------------------------------------------------------------------
Earnings per Common Share - Basic:
   Income from continuing operations                              $   0.02
   Net income                                                     $   0.02
- --------------------------------------------------------------------------------
Earnings per Common Share - Diluted:
   Income from continuing operations                              $   0.02
   Net income                                                     $   0.02
- --------------------------------------------------------------------------------

The following table  illustrates the effect on net income and earnings per share
as if the Company had applied the fair value recognition  provisions of SFAS No.
123, as amended by SFAS No. 148,  "Accounting  for  Stock-Based  Compensation  -
Transition and Disclosure" (SFAS 148) (in millions, except per share amounts):
- --------------------------------------------------------------------------------
                                                              Three months ended
                                                                March 31, 2005

- --------------------------------------------------------------------------------
Net income available to common stockholders, as reported            $    250
Add:  Stock-based employee compensation expense included in
  reported net income, net of related tax effects                          7
Deduct:  Total stock-based compensation expense
  determined under the fair value based method, net
  of related tax effects                                                 (23)
- --------------------------------------------------------------------------------
Net income available to common stockholders, pro forma              $    234
- --------------------------------------------------------------------------------
Earnings per Common Share - Basic:
   As reported                                                      $   0.18
   Pro forma                                                        $   0.17
- --------------------------------------------------------------------------------
Earnings per Common Share - Diluted:
   As reported                                                      $   0.17
   Pro forma                                                        $   0.16
- --------------------------------------------------------------------------------






Stock Options

Our stock option plans  provide  non-qualified  and  incentive  stock options to
purchase  authorized but unissued or treasury  shares at the market price on the
grant date and generally  become  exercisable in  installments  from one to five
years from the grant date. The maximum term of non-qualified and incentive stock
options is 10 years from the grant date.

The  following  table  summarizes  information  concerning  options  outstanding
including the related  transactions under the options plans for the three months
ended March 31, 2006:
- --------------------------------------------------------------------------------
                                                 Number of      Weighted Average
                                              Shares (000's)     Exercise Price
- --------------------------------------------------------------------------------
Options Outstanding as of December 31, 2005       120,504              21.67
     Granted                                        2,545              22.48
     Exercised                                    (18,800)             11.98
     Forfeited and Expired                           (892)             47.44
- --------------------------------------------------------------------------------
Options Outstanding as of March 31, 2006          103,357           $  23.24
- --------------------------------------------------------------------------------
Options Exercisable as of March 31, 2006           85,054           $  25.36
Options Exercisable as of December 31, 2005        97,015           $  24.55
- --------------------------------------------------------------------------------



The following  table  summarizes the status of the Company's stock options as of
March 31, 2006:
- ------------------------------------------------------------------------------------------------------------------------------------
                                          Options Outstanding                                    Options Exercisable
                    ----------------------------------------------------------   ---------------------------------------------
                        Number      Weighted-Average   Weighted-   Aggregate         Number        Weighted-       Aggregate
                       of Shares        Remaining       Average    Intrinsic        of Shares       Average        Intrinsic
     Range of         Outstanding      Contractual     Exercise      Value         Outstanding     Exercise          Value
  Exercise Prices   (in thousands)    Life in Years      Price  (in thousands)   (in thousands)      Price      (in thousands)
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                            
     $1.54 to 3.80        9,397            6.69         $ 3.31    $  222,986            6,365       $ 3.09       $  152,458
      4.06 to 6.93       13,552            6.73           4.83       301,013           13,075         4.81          290,633
      7.08 to 9.95       18,293            6.06           8.36       341,654           18,126         8.37          338,465
    10.05 to 15.87       24,386            7.31          12.54       353,603           15,113        12.65          217,464
    16.02 to 29.58       10,790            6.48          20.42        71,496            5,436        19.28           42,304
    30.01 to 59.35       11,181            4.47          46.84                         11,181        46.84
    60.24 to 74.09       15,330            4.35          69.38                         15,330        69.38
   76.03 to 111.00          428            4.42          92.26                            428        92.26
- ------------------------------------------------------------------------------------------------------------------------------------
                        103,357            6.11         $23.24    $1,290,752           85,054       $25.36       $1,041,324
- ------------------------------------------------------------------------------------------------------------------------------------


The aggregate intrinsic value (market value of stock less option exercise price)
in the preceding table represents the total pretax intrinsic value, based on the
Company's  average stock price on March 31, 2006, which would have been received
by the option holders had all option holders  exercised their options as of that
date. The total number of in-the-money options exercisable on March 31, 2006 was
approximately  63 million.  The weighted average  remaining  contractual life on
March 31, 2006 for outstanding  and exercisable  options is 6.11 and 5.57 years,
respectively.

The  weighted-average  grant-date  fair value for options  granted for the three
months  ended  March 31,  2006 and 2005 was $8.34 and $4.88,  respectively.  The
total fair value of options that vested  during the three months ended March 31,
2006 and 2005 was approximately $24 million and $40 million,  respectively.  The
weighted-average fair value of options that vested during the three months ended
March  31,  2006 and 2005  was  approximately  $2.99  and  $4.24,  respectively.
Compensation cost related to stock options was approximately $19 million for the
three  months  ended March 31,  2006,  and zero for the quarter  ended March 31,
2005.

Proceeds  received  from the exercise of stock options were $219 million for the
three months ended March 31, 2006, which was included in financing activities on
the consolidated  statements of cash flows. The total intrinsic value of options
exercised  for the three months ended March 31, 2006 and 2005 was  approximately
$236 million and $8 million, respectively, which is currently deductible for tax
purposes.  However,  these tax benefits  were not realized due to net  operating
loss carryforwards.






Prior to January 1, 2006, all  share-based  awards granted by Corning  specified
that the employee  will continue to vest in the award after  retirement  without
providing any additional services. Corning accounts for this type of arrangement
by  recognizing  compensation  cost over the nominal  vesting period and, if the
employee retires before the end of the vesting period, recognizing any remaining
unrecognized  compensation  cost at the date of retirement (the "nominal vesting
period  approach").  SFAS  123(R)  specifies  that an award is  vested  when the
employee's  retention  of  the  award  is  no  longer  contingent  on  providing
subsequent service (the "non-substantive  vesting period approach").  That would
be the case for Corning awards that vest when  employees  retire and are granted
to  retirement   eligible   employees.   Effective  January  1,  2006,   related
compensation  cost  must  be  recognized   immediately  for  awards  granted  to
retirement eligible employees or over the period from the grant date to the date
retirement  eligibility  is  achieved,  if that is expected to occur  during the
nominal vesting period.  For those  share-based  awards granted during the three
months  ended March 31, 2006,  Corning  recognized  approximately  $5 million in
additional  compensation  cost in applying the  non-substantive  vesting  period
approach versus the nominal period approach.

As of March 31,  2006,  there was  approximately  $53  million  of  unrecognized
compensation  cost related to stock options  granted under the Plan. The cost is
expected to be recognized over a weighted-average period of 1.45 years.

The  lattice-based  valuation model,  used to estimate the fair values of option
and  restricted   stock  grants  after  November  30,  2005,   incorporates  the
assumptions (including ranges of assumptions) noted in the table below. Expected
volatilities are based on implied  volatilities from traded options on Corning's
stock, historical volatility of Corning's stock, and other factors.

In  estimating  option grant fair value under the lattice  based model,  Corning
uses historical data to estimate future option exercise and employee termination
within the valuation  model and separate  groups of employees  that have similar
historical  exercise behavior are considered  separately for valuation purposes.
The expected  term of options  granted is derived  using a regression  model and
represents  the  period  of  time  that  options  granted  are  expected  to  be
outstanding.  The range given below  results  from  certain  groups of employees
exhibiting  different  behavior.  The  risk-free  rate for  periods  within  the
contractual  life of the  option is based on the U.S.  Treasury  yield  curve in
effect at the time of grant.

The following inputs for the lattice-based  valuation model were used for option
grants under our Stock Option Plans since December 1, 2005:
- --------------------------------------------------------------------------------
                                                     2006                2005
- --------------------------------------------------------------------------------
Expected volatility                                 38-53%              37-53%
Weighted-average volatility                           50%                 49%
Expected dividends                                     0                   0
Expected term (in years)                            3.0-5.6             3.7-4.9
Risk-free rate                                     1.0-8.1%            1.0-9.7%
Expected time to exercise (in years)                3.0-3.8             2.5-3.6
Pre-vesting departure rate                           1-4%                 3%
Post vesting departure rates                         4-7%               10-16%
- --------------------------------------------------------------------------------

The fair value of each  restricted  stock grant under the Incentive  Stock Plans
beginning  December  1,  2005  was  estimated  on the date of  grant  using  the
lattice-based  valuation  model and for  performance  based grants  assumes that
performance  goals  will be  achieved.  The  assumptions  for  annual  departure
probability used in estimating Incentive Stock grant fair values are the same as
those noted in the table above  related to grants under our Stock Option  Plans,
for stock issued since  December 1, 2005. The expected term for grants under the
Incentive Stock Plans is 1 to 10 years.






Incentive Stock Plans

The Corning  Incentive  Stock Plan permits  stock grants,  either  determined by
specific performance goals or issued directly, in most instances, subject to the
possibility  of  forfeiture  and without  cash  consideration.  Shares under the
Incentive Stock Plan are generally granted at-the-money,  contingently vest over
a period of 1 to 10 years, and have contractual lives of 1 to 10 years.

Time-Based Restricted Stock:
- ----------------------------

Time-based  restricted stock is issued by the Company on a discretionary  basis,
and is payable in shares of the Company's  common stock upon  vesting.  The fair
value is based on the market  price of the  Company's  stock on the  grant-date.
Compensation  cost is recognized over the requisite  vesting period and adjusted
for actual forfeitures before vesting.

The  following  table  represents  a  summary  of the  status  of the  Company's
nonvested  time-based  restricted  stock as of December  31,  2005,  and changes
during the three months ended March 31, 2006:
- --------------------------------------------------------------------------------
                                                                Weighted-Average
                                                                   Grant-Date
Nonvested shares                             Shares (000's)        Fair Value
- --------------------------------------------------------------------------------
Nonvested shares at December 31, 2005             861               $  11.86
Granted                                            87                  24.13
Vested                                            (55)                 14.02
Forfeited
- --------------------------------------------------------------------------------
Nonvested shares at March 31, 2006                893               $  12.93
- --------------------------------------------------------------------------------

As of March 31,  2006,  there  was  approximately  $5  million  of  unrecognized
compensation cost related to nonvested time-based  restricted stock compensation
arrangements  granted under the Plan. The cost is expected to be recognized over
a weighted average period of 2.92 years. Compensation cost related to time-based
restricted  stock was  approximately $1 million and less than $1 million for the
three months ended March 31, 2006 and 2005, respectively.

Performance-Based Restricted Stock:
- -----------------------------------

Performance-based  restricted  stock  vests  upon  the  achievement  of  certain
targets,  and are payable in shares of the  Company's  common stock upon vesting
typically over a three-year  period. The fair value is based on the market price
of the  Company's  stock on the grant date and  assumes  that the target  payout
level will be  achieved.  Compensation  cost is  recognized  over the  requisite
vesting period and adjusted for actual  forfeitures  before vesting.  During the
performance  period,  compensation  cost may be adjusted based on changes in the
expected outcome of the performance-related target.

The  following  table  represents  a  summary  of the  status  of the  Company's
nonvested performance-based  restricted stock units as of December 31, 2005, and
changes during the three months ended March 31, 2006:
- --------------------------------------------------------------------------------
                                                                Weighted-Average
                                                                   Grant-Date
Nonvested shares                            Shares (000's)         Fair Value
- --------------------------------------------------------------------------------
Nonvested shares at December 31, 2005           6,718               $  14.33
Granted                                         1,300                  12.70
Vested                                           (192)                 11.84
Forfeited                                         (12)                 11.95
- --------------------------------------------------------------------------------
Nonvested shares at March 31, 2006              7,814               $  14.12
- --------------------------------------------------------------------------------

As of March 31,  2006,  there was  approximately  $85  million  of  unrecognized
compensation  cost  related  to  nonvested  performance-based  restricted  stock
compensation  arrangements  granted  under the Plan.  The cost is expected to be
recognized  over a weighted  average  period of 2.12  years.  Compensation  cost
related to performance-based  restricted stock was approximately $11 million and
$5 million for the three months ended March 31, 2006 and 2005, respectively.






Worldwide Employee Stock Purchase Plan

In  addition to the Stock  Option  Plan and  Incentive  Stock  Plans,  we have a
Worldwide Employee Share Purchase Plan (WESPP).  Under the WESPP,  substantially
all  employees  can elect to have up to 10% of their  annual  wages  withheld to
purchase our common stock.  The purchase  price of the stock is 85% of the lower
of the  beginning-of-quarter  or  end-of-quarter  closing market price.  For the
three months ended March 31, 2006, approximately $2 million of compensation cost
related to the WESPP was  recorded,  and zero for the  quarter  ended  March 31,
2005.  For the three  months  ended March 31,  2006,  approximately  0.4 million
shares were purchased by employees.

16.  Comprehensive Income

Components of comprehensive income (loss), on an after-tax basis where
applicable, follow (in millions):
- --------------------------------------------------------------------------------
                                                  Three months ended March 31,
                                                  ----------------------------
                                                   2006 (b)           2005 (b)
- --------------------------------------------------------------------------------

Net income                                        $    257           $     250
Other comprehensive income:
   Change in unrealized gain (loss) on
     investments, net                                    1                 (33)
   Reclassification adjustment relating to
     investments included in net income, net                                19
   Change in unrealized gain on derivative
     instruments, net                                    5                  26
   Reclassification adjustment relating to
     derivatives, net                                  (11)                (13)
   Foreign currency translation
     adjustment, net (a)                                49                 (15)
   Change in minimum pension liability                  (4)                  2
- --------------------------------------------------------------------------------
Total comprehensive income                        $    297           $     236
- --------------------------------------------------------------------------------

(a)  The  initial  implementation  of  our  Taiwan  subsidiary's  change  in its
     functional  currency  from  the  new  Taiwan  dollar  to the  Japanese  yen
     effective  January 1, 2005 had the  effect of  increasing  the U.S.  dollar
     value of its net  assets and  increasing  accumulated  other  comprehensive
     income by $23 million. The impact of this change is included in the foreign
     currency translation adjustment, net amount.
(b)  Other  comprehensive  income  items in the first  quarter  of 2006 and 2005
     include  zero  net tax  effect.  Refer  to  Note 6  (Income  Taxes)  for an
     explanation of Corning's tax paying position.

17.  Operating Segments

Our   reportable    operating    segments    include    Display    Technologies,
Telecommunications,   Environmental   Technologies,   and  Life  Sciences.   The
Environmental   Technologies   reportable  segment  is  an  aggregation  of  our
Automotive and Diesel  operating  segments,  as these two segments share similar
economic  characteristics,  products,  customer types,  production processes and
distribution methods. The following provides a brief description of the products
and markets served by each reportable segment:

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

All other  operating  segments that do not meet the  quantitative  threshold for
separate reporting have been grouped as "All Other."






On January 1, 2006, Corning changed its measurement of segment profit or loss as
follows:

..    We removed the net impact of financing  costs,  such as interest expense on
     debt  instruments and interest costs  associated  with benefit plans,  from
     reportable  segments and included  these  amounts in Corporate  unallocated
     expense.
..    We changed  the  allocation  method for taxes to more  closely  reflect the
     company's current tax position.
..    We  removed  the  impact  of  non-cash  stock  compensation   expense  from
     reportable  segments  and  included  this amount in  Corporate  unallocated
     expense.
..    We  removed  the  allocation  of  exploratory  research,   development  and
     engineering  expense from reportable segments and included these amounts in
     Corporate unallocated expense.
..    We changed certain other allocation methods for corporate functions.

The  following  provides  segment  information  reflecting  these changes in the
measurement of segment profit or loss for all periods presented.



Operating Segments (in millions)
- ------------------------------------------------------------------------------------------------------------------------------------
                                                           Display     Telecom-    Environmental     Life        All
                                                        Technologies  munications  Technologies    Sciences     Other       Total
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                                       
For the three months ended March 31, 2006
Net sales                                                 $   547      $   397       $    155     $     72   $     91    $  1,262
Depreciation (1)                                          $    62      $    42       $     20     $      5   $     10    $    139
Amortization of purchased intangibles                                  $     3                                           $      3
Research, development and engineering expenses (2)        $    30      $    20       $     30     $     13   $      8    $    101
Restructuring, impairment and other charges and
  (credits) (before-tax and minority interest)                         $     6                                           $      6
Income tax provision                                      $   (29)     $    (6)                              $     (3)   $    (38)
Earnings (loss) before minority interest and equity
  earnings (loss) (3)                                     $   275      $    (2)                   $     (5)  $      2    $    270
Minority interests                                                     $     1                               $     (2)   $     (1)
Equity in earnings (loss) of affiliated companies (4)     $   142      $     2       $     (1)               $    (13)   $    130
- ------------------------------------------------------------------------------------------------------------------------------------
Net income (loss)                                         $   417      $     1       $     (1)    $     (5)  $    (13)   $    399
- ------------------------------------------------------------------------------------------------------------------------------------

For the three months ended March 31, 2005
Net sales                                                 $   320      $   427       $    148     $     74   $     81    $  1,050
Depreciation (1)                                          $    41      $    46       $     17     $      5   $      9    $    118
Amortization of purchased intangibles                                  $     5                                           $      5
Research, development and engineering expenses (2)        $    21      $    17       $     23     $      8   $      7    $     76
Income tax provision                                      $    (8)     $    (8)      $     (3)    $     (1)  $     (2)   $    (22)
Earnings before minority interest and equity earnings (3) $   119      $    18       $      9     $      4   $      3    $    153
Minority interests                                                                                           $     (2)   $     (2)
Equity in earnings of affiliated companies                $    81                                            $     17    $     98
- ------------------------------------------------------------------------------------------------------------------------------------
Net income                                                $   200      $    18       $      9     $      4   $     18    $    249
- ------------------------------------------------------------------------------------------------------------------------------------


(1)  Depreciation expense for Corning's reportable segments is recorded based on
     the assets of each segment and also includes an allocation of  depreciation
     of corporate property not specifically identifiable to a segment.
(2)  Research,  development,  and engineering  expenses  includes direct project
     spending which is identifiable to a segment.
(3)  Many of Corning's  administrative  and staff  functions  are performed on a
     centralized  basis.  Where  practicable,  Corning charges these expenses to
     segments  based upon the extent to which each  business  uses a centralized
     function. Other staff functions, such as corporate finance, human resources
     and legal are allocated to segments, primarily as a percentage of sales.
(4)  Includes  a $21  million  charge  (net of tax) in All Other  related  to an
     impairment charge for Samsung Corning.






A  reconciliation  of reportable  segment net income to consolidated  net income
follows (in millions):
- --------------------------------------------------------------------------------
                                                 Three months ended March 31,
                                                 ----------------------------
                                                   2006               2005
- --------------------------------------------------------------------------------
Net income of reportable segments               $     399           $     249
Unallocated amounts:
    Net financing costs (1)                            (8)                (37)
    Stock-based compensation expense                  (32)                 (6)
    Exploratory research                              (21)                (19)
    Corporate contributions                            (8)                 (5)
    Equity in earnings of affiliated
      companies, net of impairments                    70                  71
    Asbestos settlement (2)                          (185)                 12
    Other corporate items (3)                          42                 (15)
                                                ---------           ---------
Net income                                      $     257           $     250
- --------------------------------------------------------------------------------

(1)  Net financing costs include interest expense, interest income, and interest
     costs and investment gains associated with benefit plans.
(2)  The asbestos settlement  arrangement to be incorporated into the Pittsburgh
     Corning Corporation (PCC) reorganization plan, when the reorganization plan
     becomes  effective,  will require Corning to relinquish its equity interest
     in PCC,  contribute its equity interest in Pittsburgh Corning Europe (PCE),
     and 25 million  shares of Corning  common  stock to a trust.  Corning  also
     agreed to make cash payments over the six years from the effective  date of
     the  settlement and to assign certain  insurance  policy  proceeds from its
     primary  insurance and a portion of its excess insurance at the time of the
     settlement.  The asbestos liability requires adjustment to fair value based
     upon movements in Corning's common stock price prior to contribution of the
     shares to the trust as well as change in the  estimated  fair  value of the
     other components of the settlement  offer. In the first quarter of 2006 and
     2005,  Corning  recorded  a charge  of $182  million  and a  credit  of $16
     million,  respectively,  to reflect the movement in Corning's  common stock
     price in each year and charges of $3 million and $4 million,  respectively,
     to reflect  changes in the estimated fair value of other  components of the
     settlement offer.
(3)  Other corporate items include the tax impact of the unallocated amounts. In
     addition, the following items are also included:
     .    In the first  quarter of 2006,  a $38  million  tax  benefit  from the
          release of our valuation allowance on Germany trade taxes.
     .    In the first quarter of 2005, an impairment  charge of $19 million for
          the other-than-temporary decline in our investment in Avanex below its
          cost basis.

Each of our reportable  operating  segments is concentrated  across a relatively
small number of customers.  For the first  quarter  ended March 31, 2006,  three
customers of the Display Technologies  segment, each of which accounted for more
than 10% of segment net sales,  accounted for 47% of total segment sales. In the
Telecommunications segment, two customers, each of which accounted for more than
10% of this segment's net sales, accounted for 24% of total segment sales in the
first  quarter  of  2006.  In  the  Environmental  Technologies  segment,  three
customers,  each  of  which  accounted  for  more  than  10% of  segment  sales,
represented  74% of total  segment  sales for the first  quarter ended March 31,
2006.  In the Life  Sciences  segment,  one customer  accounted  for 52% of this
segment's sales for first quarter ended March 31, 2006.

A  significant  amount of  specialized  manufacturing  capacity  for our Display
Technologies segment is concentrated in Asia. It is at least reasonably possible
that the use of a facility  located outside of an entity's home country could be
disrupted. Due to the specialized nature of the assets, it would not be possible
to find replacement  capacity quickly.  Accordingly,  loss of the facility could
produce a near-term  severe impact to our display  business and the company as a
whole.

18.  Subsequent Events

In March 2006,  Corning  announced  an  increase in the scope of Advanced  Cable
Systems  (ACS),  its  venture  with  Hitachi  Cable  Ltd.  (Hitachi),  in Japan.
Effective  April  1,  2006,  ACS,  an  equity  company  affiliate,  will  assume
responsibility for optical cable and hardware and equipment sales in Japan. As a
result, sales of the  Telecommunications  segment will be negatively impacted as
ACS,  which is accounted  for under the equity  method,  begins to sell into the
Japanese market.  Sales of optical cable and hardware and equipment in Japan for
the first quarter of 2006 were $23 million.

On April 1, 2006,  Corning  acquired the remaining 44% equity of Shanghai  Fiber
Optics Co.,  Ltd.  (SFOC)  from  certain  unrelated  minority  shareholders  for
approximately $15 million thereby increasing  Corning's ownership of this entity
to 100%.






On April 21,  2006,  the  Company  and its audit  committee  concluded  that the
Company would  restate  previously  issued  historical  financial  statements to
properly account for its asbestos  settlement  charges and liability and for its
investment in and equity earnings of Pittsburgh  Corning Europe (PCE) from March
31, 2003, through December 31, 2005. The Company also changed the classification
of  accretion  on a portion of the  liability  to be paid in cash from  interest
expense to  asbestos  settlement  expense for the same time  period.  See Note 2
(Restatement of Prior Period Financial Statements) to the consolidated financial
statements for additional information.

On April 24, 2006,  Corning  repurchased $97 million of its 6.25% Euro notes due
2010.  Corning expects to record a loss of approximately  $8 million  associated
with this transaction.

On April 28,  2006,  Corning  notified all holders of its 8.3% fixed rate notes,
due April 4, 2025,  of our election to use cash to  repurchase  the $125 million
aggregate principal amount  outstanding.  As provided in the indenture governing
these  debentures,  the redemption price is 103.735 percent per $1,000 principal
amount per note,  together  with accrued and unpaid  interest to the  redemption
date of June 1, 2006.






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


OVERVIEW

Our key  priorities  for 2006  remain  unchanged  from the  previous  two years:
protect  our  financial  health,  improve our  profitability,  and invest in the
future. During the first quarter of 2006, we made the following progress against
these priorities:

Financial Health
Our balance sheet  remains  strong,  and we continued to generate  positive cash
flows from operating activities. Significant activities during the first quarter
of 2006 follow:

..    Our debt to capital ratio declined to 23%.
..    We ended the first quarter of 2006 with $2.5 billion in cash and short-term
     investments.  While  operating cash flow was positive,  cash and short-term
     investments  increased only slightly from December 31, 2005, due to ongoing
     capital  spending  primarily  in our  Display  Technologies  segment  and a
     capital  infusion to an equity company  affiliate offset by cash from stock
     option activity.

Profitability
For the three  months  ended March 31,  2006,  we  generated  net income of $257
million or $0.16 per share compared to a net income of $250 million or $0.17 per
share for the same  period in 2005.  The  improvement  in net  income was due to
strong volume growth in our Display  Technologies  segment driven by LCD monitor
and TV market  penetration  offset by higher asbestos  settlement  expense.  Net
income  for the  Display  Technologies  segment  in the  first  quarter  of 2006
increased $217 million, or 109%, from the first quarter of 2005.

We recorded  non-recurring  charges in the first  quarter of 2006 and 2005 which
impact  the  comparability  of both  periods.  Refer  to Note 3  (Restructuring,
Impairment  and Other  Charges  and  (Credits))  to the  consolidated  financial
statements for additional information.

Investing in Our Future
We continue to invest in a wide array of technologies, with a near-term focus on
LCD glass  substrates,  diesel  filters and substrates in response to tightening
emissions  control  standards,  and  optical  fiber and cable and  hardware  and
equipment to enable fiber-to-the-premises.

Our research,  development and engineering  expenses increased by $26 million in
the first  quarter of 2006 when compared to the same period last year but remain
relatively  constant as percentage of net sales. We believe our current spending
levels are adequate to enable us to execute our longer-term growth strategies.

Our  capital  expenditures  are  primarily  focused on  expanding  manufacturing
capacity for LCD glass substrates in the Display  Technologies segment driven by
strong demand in that market segment.  Total capital  expenditures for the first
quarter of 2006 were $280 million, of which $186 million was directed toward our
Display Technologies  segment. The majority of the remaining capital spending in
the first quarter of 2006 was spent in our Environmental Technologies segment.

Restatement of Prior Period Financial Statements
The Company  and its audit  committee  concluded,  on April 21,  2006,  that the
Company would  restate  previously  issued  historical  financial  statements to
properly account for the asbestos  settlement  charges and liability and for its
investment in and equity earnings of Pittsburgh  Corning Europe (PCE) from March
31, 2003, through December 31, 2005. The Company also changed the classification
of  accretion  on a portion of the  liability  to be paid in cash from  interest
expense to asbestos settlement expense for the same time period.






The  cumulative  effect  of  these  adjustments   resulted  in  an  increase  in
investments in affiliated companies of $32 million, an increase to other accrued
liabilities of $154 million, an increase to accumulated deficit of $123 million,
and an increase to accumulated  other  comprehensive  income of $1 million as of
December  31,  2005.  To correct  these  errors,  the Company has  restated  its
consolidated  financial  statements and, on May 9, 2006, filed an amended Annual
Report on Form 10-K/A for the fiscal year ended  December 31, 2005. In addition,
on May 9,  2006,  the  Company  filed  amended  reports  on Form  10-Q/A for the
quarters ended March 31, 2005, June 30, 2005, and September 30, 2005, to restate
the financial statements provided for those quarterly periods.

The restatement  adjustments had no impact on previously reported revenue,  cash
balances,  compliance with any debt covenants, or the Company's revolving credit
agreement.

All  information  in  this  document  reflects  the  impact  of the  restatement
described in Note 2 (Restatement  of Prior Period  Financial  Statements) to the
consolidated financial statements.

RESULTS OF OPERATIONS



Selected highlights for the third quarter follow (dollars in millions):
- ---------------------------------------------------------------------------------------------------------
                                                             Three months ended March 31,      % Change
                                                             ----------------------------      --------
                                                                2006               2005        06 vs. 05
- ---------------------------------------------------------------------------------------------------------
                                                                                       
Net sales                                                     $   1,262         $  1,050             20%

 Gross margin                                                 $     573         $    429             34%
     (gross margin %)                                               45%              41%

Selling, general and administrative expenses                  $     223         $    184             21%
     (as a % of net sales)                                          18%              18%

Research, development and engineering expenses                $     124         $     98             27%
     (as a % of net sales)                                          10%               9%

Restructuring, impairment and other charges                   $       6         $     19           (68)%
     (as a % of net sales)                                           0%               2%

Asbestos settlement                                           $     185         $   (12)        (1,642)%
     (as a % of net sales)                                          15%             (1)%

Income (loss) before income taxes                             $      56         $    101           (45)%

     (as a % of net sales)                                           4%              10%

Provision for income taxes                                    $       2         $   (19)          (111)%
     (as a % of net sales)                                           0%             (2)%

Equity in earnings of affiliated companies,
  net of impairments                                          $     200         $    169             18%
     (as a % of net sales)                                          16%              16%

Net income                                                    $     257         $    250              3%
     (as a % of net sales)                                          20%              24%
- ---------------------------------------------------------------------------------------------------------







Net Sales
For the three months ended March 31, 2006,  the net sales  increase  compared to
the same period in 2005 was the result of continued  strong demand for LCD glass
substrates in our Display Technologies segment. Net sales for all other segments
were comparable to the respective prior year period. Sales growth was negatively
impacted by approximately $83 million, driven by a weakening of the Japanese yen
between the first quarters of 2006 and 2005.

Gross Margin
As a percentage of net sales,  gross margin improved 4 percentage  points in the
first quarter of 2006 compared to the same period last year. The  improvement in
overall dollars and as a percentage of net sales was driven by increased  volume
in our Display Technologies segment.

Cost of Sales
The types of expenses included in the cost of sales line item are: raw materials
consumption,  including  direct  and  indirect  materials;  salaries,  wages and
benefits;     depreciation    and    amortization;     production     utilities;
production-related purchasing; warehousing (including receiving and inspection);
repairs and maintenance; inter-location inventory transfer costs; production and
warehousing  facility property insurance;  rent for production  facilities;  and
other production overhead.

Selling, General and Administrative Expenses
The  increase  in  selling,  general,  and  administrative  expenses  was caused
principally by an increase in compensation costs including increased stock-based
compensation expense as a result of the company's adoption of FAS 123R effective
January 1, 2006.

The types of  expenses  included  in the  selling,  general  and  administrative
expenses line item are: salaries,  wages and benefits;  stock-based compensation
expense;   travel;  sales  commissions;   professional  fees;  depreciation  and
amortization, utilities, and rent for administrative facilities.

Share Based Compensation
Prior to January 1, 2006, the Company  accounted for share-based  awards granted
under the Company's stock compensation programs using the intrinsic value method
in accordance  with APB 25 and SFAS 123.  Under the intrinsic  value method,  no
share-based  compensation  cost related to stock options had been  recognized in
the Company's consolidated statements of operations,  because the exercise price
was at least equal to the market value of the common stock on the grant date. As
a result, the recognition of share-based compensation cost was generally limited
to  the  expense  attributed  to  restricted  stock  awards,  and  stock  option
modifications.  As  permitted  under SFAS 123,  the Company  reported  pro-forma
disclosures presenting results and earnings per share as if we had used the fair
value  recognition  provisions  of  SFAS  123 in  the  notes  to  the  Company's
consolidated financial statements.

Effective  January 1, 2006,  the Company  adopted the  provisions of SFAS 123(R)
using  the  modified   prospective   application  method.   Under  the  modified
prospective   application  method,   compensation  cost  recognized  during  the
quarterly period ended March 31, 2006 includes:  (a)  compensation  cost for all
share-based  awards  granted  prior to, but not yet vested as of January 1, 2006
based on the grant date fair value  estimated  in  accordance  with the original
provisions of SFAS 123(R),  and (b) compensation cost for all share-based awards
granted  subsequent  to  January  1,  2006,  based on the grant  date fair value
estimated in accordance with the provisions of SFAS 123(R). Compensation cost is
recognized in the  consolidated  statements of operations over the period during
which an employee is required to provide  service in exchange for the award.  In
accordance with the modified prospective  application method,  results for prior
periods  have not been  restated.  The  adoption  of SFAS  123(R)  resulted in a
decrease  of $0.02 in basic and  diluted  earnings  per share for the  quarterly
period  ended March 31, 2006.  See Note 1 and Note 15 for further  detail on the
impact  of  SFAS  123(R)  to  the  Company's  condensed  consolidated  financial
statements.






Research, Development and Engineering Expenses
Research, development and engineering expenses increased in the first quarter of
2006 over the same period last year but remained  consistent  as a percentage of
net sales.  Expenditures  are  currently  focused on our  Display  Technologies,
Environmental  Technologies  and  Telecommunications  segments  as we  strive to
capitalize on the current market opportunities in those segments.

Restructuring, Impairment and Other Charges
In the first quarter of 2006, we recorded $6 million of  restructuring  expenses
for revisions to existing plans.

In  the  first  quarter  of  2005,  we  recorded  an  impairment  charge  for an
other-than-temporary  decline  in the fair  value of our  investment  in  Avanex
Corporation  (Avanex)  below  its cost  basis.  Our  investment  in  Avanex  was
accounted for as an available-for-sale  security under SFAS No. 115, "Accounting
for Certain Investments in Debt and Equity Securities" (SFAS 115). In the fourth
quarter of 2005, we completed the sale of our remaining shares of Avanex.

Refer  to  Note  3  (Restructuring,  Impairment  and  Other  Charges  and to the
consolidated financial statements for additional information.

Asbestos Settlement
The asbestos  settlement activity relates to changes in the estimated fair value
of certain  items to be  contributed  by Corning  under the  Pittsburgh  Corning
Corporation   (PCC)   asbestos   settlement   agreement   if  the  PCC  Plan  of
Reorganization  receives judicial approval.  For additional  information on this
matter,  refer to Note 4 (Commitments  and  Contingencies)  to the  consolidated
financial statements and Part II - Other Information, Item 1. Legal Proceedings.

Income Before Income Taxes
In addition to items identified above, the comparability of income before income
taxes in the first quarter of 2006 and 2005 was impacted by movements in foreign
exchange rates. Movements in exchange rates did not have a significant impact on
results for the first quarter of 2006; however, in the first quarter of 2005, we
incurred an exchange  rate loss of $26 million.  This loss was due to the impact
of currency  movements on unhedged balance sheet exposures,  most notably at our
Taiwan  subsidiary,  which changed its  functional  currency from the new Taiwan
dollar (its local  currency) to the  Japanese yen in the first  quarter of 2005.
Refer to Note 1 (Basis of Presentation) to the consolidated financial statements
for additional information.

Provision for Income Taxes
Our  (benefit)  provision  for income taxes and the related tax rates follow (in
millions):
- --------------------------------------------------------------------------------
                                               Three months ended March 31,
                                              -----------------------------
                                                 2006               2005
- --------------------------------------------------------------------------------

(Benefit) provision for income taxes          $   (2)             $   19
Effective tax rate                              (3.6%)              18.8%
- --------------------------------------------------------------------------------

For the three  months  ended  March 31,  2006,  the tax  benefit  reflected  the
following items:
..    The impact of our inability to record tax benefits on net operating  losses
     generated in the U.S. and certain foreign jurisdictions;
..    The release of a valuation  allowance  on a portion of our German trade tax
     benefits; and
..    The  benefit  of tax  holidays  and  investment  credits  in Taiwan and tax
     holidays in China.






As more fully described in Note 7 (Income Taxes) to the  consolidated  financial
statements  of the 2005 Form  10-K/A,  most of  Corning's  deferred  tax  assets
(primarily  in the U.S. and Germany)  were fully  reserved at December 31, 2005.
For the three months ended March 31, 2006, we released a valuation  allowance of
$38  million  on  a  portion  of  our  German  tax  benefits  due  to  sustained
profitability in certain of our German operations leading us to conclude that it
is more  likely  than not that  the  underlying  tax  benefits  are  realizable.
Otherwise,  we expect to maintain a valuation  allowance  on future tax benefits
until an  appropriate  level of  profitability  is  sustained  or we are able to
develop tax  planning  strategies  that  enable us to  conclude  that it is more
likely than not that our deferred tax assets are realizable. Until then, our tax
provision  will  generally  include  only the net tax  expense  attributable  to
certain foreign operations.

Certain foreign subsidiaries in China and Taiwan are operating under tax holiday
arrangements.  The nature and extent of such arrangements vary, and the benefits
of such arrangements phase out in various years (2007 through 2010) according to
the  specific  terms and  schedules of the relevant  taxing  jurisdictions.  The
impact of the tax holidays on our  effective tax rate is a reduction in the rate
of 38% and 7% for the three months ended March 31, 2006 and 2005, respectively.

Equity in Earnings of Affiliated Companies, Net of Impairments
The following provides a summary of equity in earnings of affiliated  companies,
net of impairments (in millions):
- --------------------------------------------------------------------------------
                                                   Three months ended March 31,
                                                   ----------------------------
                                                     2006               2005
- --------------------------------------------------------------------------------
Samsung Corning Precision                          $   140             $    80
Dow Corning Corporation                                 69                  68
Samsung Corning                                        (22)                  9
All other                                               13                  12
                                                   -------             -------
Total equity earnings                              $   200             $   169
- --------------------------------------------------------------------------------

The improvement in equity earnings  recognized from Samsung Corning Precision is
explained  in the  discussion  of the  performance  of our Display  Technologies
segment. In the first quarter of 2006, Corning reduced its investment in Samsung
Corning by $21 million due to an  impairment of  long-lived  assets  incurred by
Samsung Corning.  This impairment  charge also reduced Corning's equity earnings
from Samsung Corning by $21 million.

In 2003 and 2005,  Samsung Corning  recorded  significant  fixed asset and other
impairment charges. In the first quarter of 2006 an additional impairment charge
of $21 million (net of tax) was recognized. As the conventional television glass
market will be negatively  impacted by strong growth in the LCD glass market, it
is reasonably  possible that Samsung Corning may incur additional  restructuring
or impairment  charges or operating  losses in the foreseeable  future.  Samsung
Corning is currently  investing in several  developing  businesses which Samsung
Corning management  believes will offset the decline in conventional  television
glass  market  over time.  Should  these new  businesses  not  achieve  expected
results,  additional  operating  losses,  asset  impairments  and  restructuring
charges are likely to occur or Samsung Corning's  long-term  financial viability
may come into  question.  These  events  could  result in Corning  incurring  an
impairment of its investment in Samsung Corning.  Corning management believes it
is more likely than not that an impairment of our  investment  will occur in the
foreseeable future.  Corning's investment in Samsung Corning was $217 million at
March 31, 2006.

Refer to Note 10  (Investments)  to the  consolidated  financial  statements for
additional  information relating to Samsung Corning Precision,  Dow Corning, and
Samsung Corning's operating results.






Net Income
As a result of the above, our net income and per share data follow (in millions,
except per share amounts):
- --------------------------------------------------------------------------------
                                                   Three months ended March 31,
                                                   ----------------------------
                                                      2006               2005
- --------------------------------------------------------------------------------

Net income                                          $   257          $     250
Basic earnings per common share                     $  0.17          $    0.18
Diluted earnings per common share                   $  0.16          $    0.17
Shares used in computing per share amounts
     Basic earnings per common share                  1,541              1,411
     Diluted earnings per common share                1,592              1,503
- --------------------------------------------------------------------------------

OPERATING SEGMENTS

Our   reportable    operating    segments    include    Display    Technologies,
Telecommunications,   Environmental   Technologies,   and  Life  Sciences.   The
Environmental   Technologies   reportable  segment  is  an  aggregation  of  our
Automotive and Diesel  operating  segments,  as these two segments share similar
economic  characteristics,  products,  customer types,  production processes and
distribution methods. The following provides a brief description of the products
and markets served by each reportable segment:

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

All other  operating  segments that do not meet the  quantitative  threshold for
separate reporting have been grouped as "All Other."

We prepared the financial results for our reportable segments on a basis that is
consistent  with  the  manner  in  which we  internally  disaggregate  financial
information to assist in making  internal  operating  decisions.  We 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. Segment net income may
not be consistent with measures used by other companies. The accounting policies
of our  reportable  segments are the same as those  applied in the  consolidated
financial statements.

On January 1, 2006, Corning changed its measurement of segment profit or loss as
follows:

..    We removed the net impact of financing  costs,  such as interest expense on
     debt  instruments and interest costs  associated  with benefit plans,  from
     reportable  segments and included  these  amounts in Corporate  unallocated
     expense.
..    We changed  the  allocation  method for taxes to more  closely  reflect the
     Company's current tax position.
..    We  removed  the  impact  of  non-cash  stock  compensation   expense  from
     reportable  segments  and  included  this amount in  Corporate  unallocated
     expense.
..    We  removed  the  allocation  of  exploratory  research,   development  and
     engineering  expense from reportable segments and included these amounts in
     Corporate unallocated expense.
..    We changed certain other allocation methods for corporate functions.

The following  discussion reflects segment information that has been restated to
reflect the changes to segment performance measurement as described above.






Display Technologies
The following table provides net sales and other data for the Display
Technologies segment (in millions):
- --------------------------------------------------------------------------------
                                          For the three months
                                             ended March 31,           % Change
                                          --------------------         ---------
                                             2006       2005           06 vs. 05
- --------------------------------------------------------------------------------

Net sales                                   $  547     $  320              71%
Income before equity earnings               $  275     $  119             131%
Equity earnings of affiliated companies     $  142     $   81              75%
Net income                                  $  417     $  200             109%
- --------------------------------------------------------------------------------

The net sales  increase for the first  quarter of 2006 is largely  reflective of
the overall LCD market growth. During the first quarter of 2006, glass substrate
volumes (measured in square feet of glass sold) increased 111% compared with the
same period in 2005 driven by increased  LCD monitor and TV market  penetration,
demand for larger-size substrates, and shipments of notebook computers. Weighted
average selling prices  decreased 10% compared to the first quarter of 2005. For
the first  quarter of 2006,  large-size  glass  substrates  accounted for 80% of
total sales volumes,  compared to 59% for the first quarter of 2005. Because the
sales of the Display  Technologies  segment are denominated in Japanese yen, our
sales are  susceptible  to movements in the U.S.  dollar - Japanese yen exchange
rate. Sales growth was negatively  impacted by approximately  $66 million from a
weakening of the Japanese yen compared to the first quarter of 2005.

For the first quarter of 2006, the increase in income before equity earnings was
primarily the result of higher volumes as described above.

The increase in our equity  earnings  from  Samsung  Corning  Precision  for the
periods  presented was largely driven by the same market factors  identified for
our  wholly-owned  business.  During the first quarter of 2006,  Samsung Corning
Precision's   earnings  were  negatively  impacted  by  approximately  21%  from
movements  in  exchange  rates  compared  to the first  quarter of 2005.  Equity
earnings  from  Samsung  Corning  Precision,  denominated  in  Korean  won,  are
susceptible  to movements  in the  exchange  rate between the Korean won and the
U.S. dollar.

The Display Technologies  segment has a concentrated  customer base comprised of
LCD panel and color filter makers primarily located in Japan and Taiwan. For the
first  quarter  of  2006,  AU  Optronics  Corporation,  Chi Mei  Optoelectronics
Corporation, and Hannstar Display Corporation,  each of which accounted for more
than 10% of segment net sales,  accounted  for 47% of total  segment  sales.  In
addition,  Samsung Corning  Precision's  sales are  concentrated  across a small
number of its customers.  In the first quarter of 2006, sales to three LCD panel
makers located in Korea, Samsung Electronics Co., Ltd., LG Phillips LCD Co., and
Dong Woo STI, accounted for 99% of total Samsung Corning Precision sales.

In 2005 and 2004,  Corning and several customers entered into long-term purchase
and supply  agreements  in which the Display  Technologies  segment  will supply
large-size glass substrates to the customers over periods of up to six years. As
part of the agreements,  these customers agreed to make advance cash deposits to
Corning  for a portion of the  contracted  glass to be  purchased.  In the first
quarter of 2006, Corning received $13 million of deposits and issued $21 million
in credit  memoranda.  Refer to Note 12 (Customer  Deposits) to the consolidated
financial statements for additional information.

In the event the customers do not make all customer deposit installment payments
or elect not to purchase  the agreed  upon  quantities  of  product,  subject to
specific  conditions  outlined in the  agreements,  Corning  may retain  certain
amounts of the  customer  deposits.  If Corning  does not  deliver  agreed  upon
product  quantities,  subject to specific conditions outlined in the agreements,
Corning may be required to return certain amounts of the customer deposits.

In February  2006,  Corning  announced  that its board of directors had approved
funding  for a new  LCD  glass  substrate  finishing  facility  in the  People's
Republic of China.






Outlook:
- --------
We expect to see a  continuation  of the overall  industry  growth and the trend
toward  large-size  substrates  allowing our customers to more  effectively  and
efficiently produce both large and small sized panels. The Company now estimates
that LCD glass market volume will grow 40% to 50% in 2006. This market growth is
expected  to occur at  varying  rates in the  principal  LCD  markets  of Japan,
Taiwan,  China and Korea.  Sales of our  wholly-owned  business are primarily to
panel and color filter manufacturers in Japan, Taiwan, and China while customers
in Korea are serviced by Samsung Corning  Precision.  The actual growth rates in
these markets will impact our sales and earnings performance.

For the second quarter of 2006, we expect volumes for our wholly-owned  business
and Samsung Corning Precision to be flat to up 5% in the aggregate,  compared to
the first quarter of 2006. Pricing in the second quarter is expected to decline,
resulting  in  second  quarter  sales  consistent  with the  first  quarter.  In
addition,  a power outage at our plant in Japan is expected to negatively impact
second-quarter  earnings  resulting  from a limitation  on  production  and from
equipment  repair costs. In late 2005, we began  production at our new Taichung,
Taiwan  manufacturing  facility.  The  ramp of  production  and our  ability  to
efficiently  start up operations may impact  profitability in 2006. There can be
no assurance that the end-market rates of growth will continue at the high rates
experienced  in  recent  quarters,  that we will  be able to pace  our  capacity
expansions to actual demand, or that the rate of cost declines will offset price
declines in any given  period.  While the industry has grown  rapidly,  consumer
preferences for panels of differing  sizes, or price or other factors,  may lead
to pauses in market growth, and it is possible that glass manufacturing capacity
may exceed  demand from time to time. In addition,  changes in foreign  exchange
rates,  principally  the  Japanese  yen,  will  continue to impact the sales and
profitability of this segment.

Telecommunications
The following table provides net sales and other data for the Telecommunications
segment (in millions):
- --------------------------------------------------------------------------------
                            For the three months ended March 31,       % Change
                            ------------------------------------       ---------
                                 2006                2005              06 vs. 05
- --------------------------------------------------------------------------------

Net sales:
   Optical fiber and cable     $     205           $    212                (3)%
   Hardware and equipment            192                215               (11)%
                               ---------           --------
     Total net sales           $     397           $    427                (7)%
                               =========           ========

Net income                     $       1           $     18               (94)%
- --------------------------------------------------------------------------------

The segment  sales  decline was largely  driven by lower prices and a decline in
hardware and equipment sales due to lower sales to Verizon  Communications  Inc.
(Verizon)  when  compared to strong  Verizon  shipments in the first  quarter of
2005.   The   first   quarter   2005   included   the   ramp-up   of   Verizon's
fiber-to-the-premises  program.  Movements in foreign exchange rates,  primarily
the Euro and Japanese  yen, did not have a  significant  impact on sales for the
first quarter of 2006 when compared to the same period last year.

Net income for the first quarter of 2006 decreased $17 million from the previous
year due largely to lower  hardware  and  equipment  volumes and price  declines
partially  offset by fiber and cable volume gains.  Movements in exchange  rates
did not significantly impact the results for this operating segment.

The  Telecommunications  segment has a concentrated customer base. For the first
quarter of 2006, two customers of the Telecommunications  segment, each of which
accounted  for more than 10% of  segment  net  sales,  represented  24% of total
segment sales.

Outlook:
- --------
In March 2006,  Corning  announced  an  increase in the scope of Advanced  Cable
Systems  (ACS),  its  venture  with  Hitachi  Cable  Ltd.  (Hitachi),  in Japan.
Effective  April  1,  2006,  ACS,  an  equity  company  affiliate,  will  assume
responsibility for optical cable and hardware and equipment sales in Japan. As a
result, sales of the  Telecommunications  segment will be negatively impacted as
ACS,  which is accounted  for under the equity  method,  begins to sell into the
Japanese market.  Sales of optical cable and hardware and equipment in Japan for
the first quarter of 2006 were $23 million.






For the second  quarter of 2006, we expect net sales to increase 10% to 15% from
the first quarter of 2006,  driven by increased  hardware and  equipment  sales.
Fiber and cable sales are expected to be up from the first  quarter of this year
and hardware and equipment sales are expected to increase. Fiber-to-the-premises
sales to Verizon continue to be dependent on Verizon's planned targets for homes
passed and connected in 2006 which are currently expected to be strong.  Changes
in the expected  Verizon  deployment  plan,  or  additional  reductions in their
inventory  levels of  fiber-to-the-premises  products,  could  affect  the sales
level.

Environmental Technologies
The  following  table  provides  net sales and other data for the  Environmental
Technologies segment (in millions):
- --------------------------------------------------------------------------------
                         For the three months ended March 31,        % Change
                         ------------------------------------        ---------
                              2006                  2005             06 vs. 05
- --------------------------------------------------------------------------------

Net sales:
   Automotive               $     121             $    127               (5)%
   Diesel                          34                   21               62%
                            ---------             --------
     Total net sales        $     155             $    148                5%
                            =========             ========

Net (loss) income           $      (1)            $      9             (111)%
- --------------------------------------------------------------------------------

Sales of this segment for the first  quarter of 2006 were  slightly  higher than
the same period last year. The decline in automotive sales was caused by reduced
volumes due largely to a lackluster  automotive market in North America.  Diesel
products  sales  growth was buoyed by demand  from  heavy-duty  diesel  retrofit
markets  particularly  in Asia  and  from the  sales  of our  recently  launched
light-duty  diesel filter product line. The Company  continues to negotiate with
several diesel engine  manufacturers to develop supply agreements for 2007 model
year platforms when tighter  emission  requirements  in the U.S. are expected to
become effective.  Negotiations are ongoing and will likely continue through the
next several  quarters.  Movements in exchange  rates did not have a significant
impact on sales for this segment.

For the first quarter of 2006,  the decrease in net income  compared to the same
period  last  year  was   primarily  the  result  of  higher   engineering   and
manufacturing  start-up costs to support increasing production levels for diesel
products.  Movements in foreign exchange rates did not significantly  impact net
income (loss) for the comparable periods.

The Environmental  Technologies segment sells to a concentrated customer base of
manufacturers  of  catalyzers  and emission  control  systems,  who then sell to
automotive  and  diesel  engine  manufacturers.  Although  our  sales are to the
emission control systems manufacturers, the use of our substrates and filters is
generally  required by the  specifications  of the  automotive and diesel engine
manufacturers.   For  the  first  quarter  of  2006,   three  customers  of  the
Environmental Technologies segment, each of which accounted for more than 10% of
segment net sales, accounted for 74% of total segment sales.

Outlook:
- --------
For the second  quarter of 2006,  we expect net sales to be down  slightly  from
those of the first quarter.  Both automotive  substrate and diesel product sales
are expected to be down  slightly  from the first  quarter of 2006. A portion of
our  automotive  products  are sold to US auto  manufacturers,  and as a result,
changes in automotive  production by these  manufacturers could adversely impact
sales and net income of this segment.

Life Sciences
The  following  table  provides  net sales and other data for the Life  Sciences
segment (in millions):
- --------------------------------------------------------------------------------
                       For the three months ended March 31,            % Change
                       ------------------------------------            ---------
                            2006                  2005                 05 vs. 04
- --------------------------------------------------------------------------------

Net sales                 $      72             $     74                   (3)%
Net (loss) income         $      (5)            $      4                 (225)%
- --------------------------------------------------------------------------------







Net sales for the first  quarter of 2006 were down slightly when compared to the
same period in 2005 due to lower volumes in the US offset by incremental  volume
gains in international markets and higher prices.  Movements in foreign exchange
rates did not have a significant impact on the comparability of sales.

For the first quarter of 2006, the net loss compared to income in the respective
2005 period was largely  attributable to lower volume,  higher  materials costs,
and new product development spending.

In the Life Sciences segment,  one customer  accounted for 52% of this segment's
net sales in the first quarter of 2006.

Outlook:
- --------
For the second  quarter of 2006, we expect net sales to be slightly  higher than
the first quarter of 2006 due to increased volumes in North America and Europe.

LIQUIDITY AND CAPITAL RESOURCES

Customer  Deposits
Certain  customers  of  our  Display  Technologies  segment  have  entered  into
long-term  supply  agreements and agreed to make advance cash deposits to secure
supply of large-size  glass  substrates.  The deposits  will be reduced  through
future product purchases, thus reducing operating cash flows in later periods as
credits are applied for cash deposits received in earlier periods.



Customer  deposits  have been or will be received in the  following  periods (in
millions):
- ------------------------------------------------------------------------------------------------------------------------------------
                                                             Three months ended         Remainder      Estimated 2007
                                      2004       2005          March 31, 2006            of 2006         and Beyond         Total
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                                          
Customer deposits received            $204       $457                $13                  $160              $105            $939
- ------------------------------------------------------------------------------------------------------------------------------------


The majority of the remaining  customer  deposits will be received through 2006.
In 2005,  we issued $29  million in credit  memoranda.  In the first  quarter of
2006, we issued $21 million in credit  memoranda.  These credit  amounts are not
included in the above amounts, and were applied against customer receivables.

In 2006,  we  expect  to issue  credits  approximately  equal to the  amount  of
deposits expected to be received in 2006.

Financing Structure
In the  first  quarter  of  2006,  we did not  have  any  significant  financing
activities.

On April 24, 2006,  Corning  repurchased $97 million of its 6.25% Euro notes due
2010.

On April 28,  2006,  Corning  notified all holders of its 8.3% fixed rate notes,
due April 4, 2025,  of our election to use cash to  repurchase  the $125 million
aggregate principal amount  outstanding.  As provided in the indenture governing
these  debentures,  the redemption price is 103.735 percent per $1,000 principal
amount per note,  together  with accrued and unpaid  interest to the  redemption
date of June 1, 2006.






In the first quarter of 2005, we completed the following debt transactions:
..    We obtained a loan of approximately $48 million,  bearing interest at 2.1%,
     from a Japanese bank. This loan is part of a 10-year loan agreement entered
     into in 2004 to fund certain capital expansion activities in Japan.
..    We redeemed $100 million of our outstanding 3.50%  convertible  debentures,
     due November 1, 2008. The bondholders  affected by this redemption  elected
     to convert $98 million of their  debentures  into Corning common stock at a
     conversion  ratio  of  103.3592  shares  per  $1,000  debenture,  with  the
     remaining $2 million  repaid in cash.  Separately,  bondholders  elected to
     convert  approximately  $6 million of outstanding  debentures  into Corning
     common stock.  In total, we issued 11 million shares upon the conversion of
     the debentures, resulting in an increase to equity of $105 million.
..    We repaid a total of $192 million of notes in accordance  with their stated
     repayment schedule. This was primarily comprised of our 5.625% Euro notes.

In the first  quarter  of 2005 we  entered a written  agreement  with a group of
banks on a new revolving credit facility. The new facility provides us access to
a $975 million unsecured  multi-currency revolving line of credit and expires in
March 2010. The facility includes two financial covenants,  a leverage ratio and
an  interest  coverage  ratio,  both with  which we are in  compliance  and also
includes  restrictions  on the  declaration  of dividends.  Concurrent  with the
closing of this credit facility, we terminated our previous $2 billion revolving
line of credit that was set to expire in August 2005.

Capital Spending
Capital  spending  totaled $280 million and $323 million in the first quarter of
2006 and 2005, respectively. Our 2006 capital spending program is expected to be
in the range of $1.3 billion to $1.5 billion. Of this amount, approximately $900
million to $1.1  billion will be used to expand  manufacturing  capacity for LCD
glass  substrates in the Display  Technologies  segment and  approximately  $200
million will be directed toward our Environmental Technologies segment.

Key Balance Sheet Data
Balance sheet and working  capital  measures are provided in the following table
(dollars in millions):
- --------------------------------------------------------------------------------
                                        As of March 31,       As of December 31,
                                        ---------------       ------------------
                                             2006                    2005
- --------------------------------------------------------------------------------

Working capital                            $  1,661                $  1,490
Working capital, excluding cash,
  cash equivalents, and
  short-term investments                   $  (817)                $  (944)
Current ratio                                 1.7:1                   1.6:1
Trade accounts receivable,
   net of allowances                       $    696                $    629
Days sales outstanding                           50                      49
Inventories                                $    616                $    570
Inventory turns                                 4.6                     4.7
Days payable outstanding                         90                      89
Long-term debt                             $  1,788                $  1,789
Total debt to total capital                     23%                     25%
- --------------------------------------------------------------------------------






Credit Rating
Our credit  ratings were updated from those  disclosed in our 2005 Annual Report
on Form 10-K/A as follows:
- --------------------------------------------------------------------------------
RATING AGENCY                                 Rating
Last Update                               Long-Term Debt              Outlook
- --------------------------------------------------------------------------------

Fitch                                           BBB                   Stable
    April 26, 2006

Standard & Poor's                               BBB                   Stable
    April 10, 2006

Moody's                                        Baa3                   Stable
    September 20, 2005
- --------------------------------------------------------------------------------

Management Assessment of Liquidity
Our major source of funding for 2006 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 for general corporate purposes.  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.

Off Balance Sheet Arrangements
There have been no material  changes  outside the ordinary course of business in
off balance  sheet  arrangements  disclosed  in our 2005  Annual  Report on Form
10-K/A under the caption "Off Balance Sheet Arrangements."

Contractual Obligations
There have been no material  changes  outside the ordinary course of business in
the contractual  obligations  disclosed in our 2005 Annual Report on Form 10-K/A
under the caption "Contractual Obligations."

CRITICAL ACCOUNTING ESTIMATES

The preparation of financial  statements  requires  management to make estimates
and  assumptions  that affect  amounts  reported  therein.  The  estimates  that
required  management's  most  difficult,  subjective  or complex  judgments  are
described in our 2005 Annual Report on Form 10-K/A and remain unchanged  through
the first quarter of 2006.

SFAS  123R  was  adopted  on  January  6,  2006.  Refer  to Note 1 and 15 to our
unaudited consolidated financial statements for further information.  There were
no other  accounting  policies  adopted  during the first quarter of fiscal 2006
that had a material effect on our financial condition and results of operations.

NEW ACCOUNTING STANDARDS

In May  2005,  the FASB  issued  SFAS No.  154,  "Accounting  Changes  and Error
Corrections"  (SFAS  154),  which  replaces  APB  Opinion  No.  20,  "Accounting
Changes,"  (APB 20) and SFAS No. 3,  "Reporting  Accounting  Changes  in Interim
Financial  Statements." SFAS 154 changes the requirements for the accounting for
and reporting of a change in accounting principle. Upon the adoption of SFAS 154
beginning  January 1, 2006,  Corning  has  applied  the  standard's  guidance to
changes in  accounting  methods as  required.  The  adoption of SFAS 154 was not
material  to  Corning's   consolidated   results  of  operations  and  financial
condition.

In February 2006, the FASB issued SFAS No. 155,  "Accounting  for Certain Hybrid
Financial  Instruments - an amendment of FASB  Statements No. 133 and 140" (SFAS
155).  SFAS 155 is effective  for all financial  instruments  acquired or issued
after  January 1, 2007,  and amends SFAS No.  133,  "Accounting  for  Derivative
Instruments and Hedging Activities," and SFAS No. 140, "Accounting for Transfers
and  Servicing of Financial  Assets and  Extinguishments  of  Liabilities.  This
Statement  resolves issues addressed in Statement 133  Implementation  Issue No.
D1,  "Application  of  Statement  133 to  Beneficial  Interests  in  Securitized
Financial  Assets."  Corning  does not expect the adoption of SFAS 155 to have a
material  impact  on  its  consolidated  results  of  operations  and  financial
condition.






In March  2006,  the FASB  issued SFAS No. 156,  "Accounting  for  Servicing  of
Financial  Assets--an  amendment  of FASB  Statement  No. 140" (SFAS 156).  This
Statement  amends SFAS No. 140,  "Accounting  for  Transfers  and  Servicing  of
Financial  Assets  and  Extinguishments  of  Liabilities,"  with  respect to the
accounting for separately recognized servicing assets and servicing liabilities.
Corning adopted SFAS No. 156 on January 1, 2006. The impact of adopting SFAS 156
was not material to Corning's  consolidated  results of operations and financial
condition.

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  $13  million   (undiscounted)  for  the  estimated
liability for  environmental  cleanup and related  litigation at March 31, 2006.
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

Many  statements  in  this  Quarterly  Report  Form  10-Q  are   forward-looking
statements.  These  typically  contain  words  such  as  "believes,"  "expects,"
"anticipates,"   "estimates,"   "forecasts,"  and  similar  expressions.   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;
- -    interest costs;
- -    credit rating and ability to obtain  financing and capital on  commercially
     reasonable terms;
- -    adequacy and availability of insurance;
- -    financial risk management;
- -    capital spending;
- -    acquisition and divestiture activities;
- -    rate of technology change;
- -    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;
- -    customer  ability,  most notably in the Display  Technologies  segment,  to
     maintain   profitable   operations  and  obtain  financing  to  fund  their
     manufacturing expansions;
- -    fluctuations in supply chain inventory levels;
- -    equity company activities,  principally at Dow Corning Corporation, Samsung
     Corning Precision, and Samsung Corning;
- -    movements in foreign exchange rates,  primarily the Japanese yen, Euro, and
     Korean won; and
- -    other risks detailed in Corning's SEC filings.






ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market Risk Disclosures

There have been no  material  changes to our market  risk  exposures  during the
first three  months of 2006.  For a  discussion  of our exposure to market risk,
refer to Item 7A,  Quantitative and Qualitative  Disclosures About Market Risks,
contained in our 2005 Annual Report on Form 10-K/A.


ITEM 4.  CONTROLS AND PROCEDURES

(a)  Restatement

As  discussed  in  Note 2 to the  consolidated  financial  statements  contained
herein, the Company has restated its consolidated  financial  statements for the
years 2003 through 2005 and its quarterly  consolidated financial statements for
each of the  quarterly  periods in the years ended  December  31, 2005 and 2004.
Specifically,  between  March 31, 2003,  and December  31, 2005,  the  following
accounting errors occurred:

..    Corning's  asbestos  settlement  charges and the related  liability for the
     asbestos  settlement  did not reflect the  estimated  fair value at initial
     recognition or subsequent  changes in fair value, of certain  components of
     the proposed settlement offer. As a result, asbestos settlement charges for
     the  years  2005,  2004,  and 2003 were  understated  by $13  million,  $24
     million, and $117 million, respectively.
..    Corning  incorrectly  suspended  recording  equity  earnings of  Pittsburgh
     Corning  Europe,  N.V.  between March 31, 2003, and December 31, 2005. As a
     result,  equity in earnings  of  affiliated  companies  for the years 2005,
     2004, and 2003 was understated by $13 million, $11 million, and $7 million,
     respectively.
..    Accretion  on  the  cash  portion  of the  asbestos  settlement  offer  was
     incorrectly recorded as interest expense resulting in both an overstatement
     of interest expense and an  understatement of asbestos  settlement  expense
     for the years  2005,  2004,  and 2003,  by $8 million,  $8 million,  and $5
     million, respectively.

In  the  restated  consolidated   financial  statements,   the  higher  asbestos
settlement  charges  are  tax-effected  in 2003 and the first  half of 2004.  As
Corning provided a valuation allowance on most of its deferred tax assets in the
third  quarter of 2004,  that  quarter  reflects an  increase  in the  valuation
allowance  of $55  million  for the  deferred  tax assets  related to the higher
asbestos settlement charges.

(b)  Evaluation of disclosure controls and procedures

The Company  maintains  disclosure  controls and procedures that are designed to
ensure that  information  required to be disclosed by the Company in the reports
that it files or submits under the Securities Exchange Act of 1934 (the Exchange
Act) is accumulated and communicated to our management,  including our principal
executive and principal financial officers,  or other persons performing similar
functions,   as  appropriate  to  allow  timely  decisions   regarding  required
disclosure.

In the first quarter of 2006,  management identified errors in the accounting of
its  Pittsburgh  Corning  Corporation  (PCC) Asbestos  Litigation  liability and
investments  in  affiliates  and as noted  above,  has  recorded  the  necessary
adjustments in the unaudited interim  consolidated  financial statements for the
quarter ended March 31, 2006 to correct these errors and has restated previously
issued financial statements. In its Form 8-K filed on April 25, 2006, management
indicated  that the  evaluation  of internal  control over  financial  reporting
related to the above mentioned errors was still in process.

The evaluation has been completed,  and  management,  under the direction of its
principal  executive  and  principal  financial  officers,   has  evaluated  the
effectiveness  of our  disclosure  controls and  procedures (as defined in Rules
13a-15(e) and 15d-15(e) under the Exchange Act) as of March 31, 2006. Based upon
this evaluation and as a result of the material weaknesses  discussed below, the
Company's principal  executive and principal financial officers,  have concluded
that its disclosure  controls and procedures  were not effective as of March 31,
2006.






A  material  weakness  is a control  deficiency,  or a  combination  of  control
deficiencies,  that  results  in more than a remote  likelihood  that a material
misstatement of the annual or interim financial statements will not be prevented
or detected.  Management  determined  that the  following  control  deficiencies
constitute  material  weaknesses in internal control over financial reporting at
March 31, 2006:

     (i)  The Company did not maintain  effective controls over the valuation of
          its asbestos  settlement  charges and the valuation and reconciliation
          of the related  liability  pertaining to the 2003  Pittsburgh  Corning
          Corporation Asbestos Litigation Bankruptcy  Settlement.  Specifically,
          the Company did not maintain effective controls to ensure that certain
          components of the liability,  which may be settled by contributing the
          Company's  equity  interest in  Pittsburgh  Corning  Europe,  N.V. and
          assignment  of  rights  to  insurance  proceeds,   were  appropriately
          recorded at fair value rather than book value as required by generally
          accepted  accounting  principles.  This control deficiency resulted in
          the restatement of our annual  consolidated  financial  statements for
          the years ended  December 31, 2005,  2004,  and 2003 and the quarterly
          consolidated  financial  statements  for each of the  three  quarterly
          periods in the years ended  December 31, 2005 and 2004.  Additionally,
          this control deficiency could result in a misstatement of our asbestos
          settlement  charges  and  related  liability  that  would  result in a
          material misstatement to the annual or interim consolidated  financial
          statements that would not be prevented or detected.

     (ii) The Company did not maintain  effective controls over the completeness
          and accuracy of its equity investments.  Specifically, the Company did
          not maintain  effective controls to ensure that earnings of its equity
          investments  were  accurately  and completely  recorded.  This control
          deficiency  resulted  in the  restatement  of our annual  consolidated
          financial  statements for the years ended December 31, 2005, 2004, and
          2003 and the quarterly  consolidated  financial statements for each of
          the three  quarterly  periods in the years ended December 31, 2005 and
          2004.  Additionally,   this  control  deficiency  could  result  in  a
          misstatement  of our  investments and equity in earnings of affiliated
          companies that would result in a material  misstatement  to the annual
          or  interim  consolidated  financial  statements  that  would  not  be
          prevented or detected.

Plan for  Remediation  of Material  Weaknesses - We believe the steps  described
below,  some of which have  already  been taken,  will  remediate  the  material
weaknesses described above.

..    We have  enhanced the  procedures  and  documentation  associated  with the
     reconciliation of our PCC Asbestos Litigation  liability in order to ensure
     that  all  components  are  included  in the  evaluation  process  and  are
     accounted for in accordance with generally accepted accounting principles.
..    We have augmented the resources in our Accounting  Services department that
     will enable us to have a stronger segregation of duties associated with the
     reconciliation of the PCC Asbestos  Litigation  liability account to ensure
     1) the analysis and  preparation  of the  reconciliation  and 2) a detailed
     review of this work is done by separate  individuals who have the requisite
     skill set and training.
..    We are in the process of updating our key controls  within the  Investments
     in Affiliates cycle to specifically  address 1) our ability to achieve full
     inclusion of all less than 100% owned entities in our  accounting  analysis
     of  Investments  in  Affiliates  and 2) to  ensure  proper  monitoring  and
     accounting for these entities.
..    We  are  in  the  process  of  improving  our   investments  in  affiliates
     reconciliation  procedures  and  documentation  in order to  ensure  1) the
     analysis and preparation of the  reconciliation and 2) a detailed review of
     the  reconciliation is done by separate  individuals who have the requisite
     skill set and training.

As  discussed  above,  since  March 31,  2006,  we are in the  process of making
improvements  to our  internal  control  over  financial  reporting  that have a
material effect,  or are reasonably  likely to materially  affect,  our internal
control  over  financial  reporting  and  anticipate  the  control  deficiencies
described above can be remediated on or before September 30, 2006.


(c) Changes in internal control over financial reporting

No changes in the Company's  internal control over financial  reporting occurred
during the quarter ending March 31, 2006 that have materially  affected,  or are
reasonably  likely to materially  affect,  the Company's  internal  control over
financial reporting.





                           Part II - Other Information

ITEM 1.  LEGAL PROCEEDINGS

Environmental Litigation. Corning has been named by the Environmental Protection
Agency (the  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 $13 million  (undiscounted)  for its estimated
liability for environmental cleanup and litigation at March 31, 2006. Based upon
the information  developed to date, management believes that the accrued reserve
is a  reasonable  estimate of the  Company's  liability  and that the risk of an
additional loss in an amount materially higher than that accrued is remote.

Dow Corning Bankruptcy. Corning and The Dow Chemical Company (Dow Chemical) each
own 50% of the common stock of Dow Corning.  In May 1995,  Dow Corning filed for
bankruptcy  protection to address pending and claimed  liabilities  arising from
many thousand  breast  implant  product  lawsuits.  On June 1, 2004, Dow Corning
emerged from Chapter 11 with a Plan of Reorganization  (the Plan) which provided
for the settlement or other resolution of implant claims. The Plan also includes
releases  for  Corning  and  Dow  Chemical  as   shareholders  in  exchange  for
contributions to the Plan.

Under  the terms of the Plan,  Dow  Corning  has  established  and is  funding a
Settlement Trust and a Litigation Facility to provide a means for tort claimants
to settle or litigate their claims. Inclusion of insurance, Dow Corning has paid
approximately  $1.6 billion to the Settlement  Trust.  As of March 31, 2006, Dow
Corning had recorded a reserve for breast implant litigation of $1.8 billion and
anticipates insurance receivables of $242 million.  Certain commercial creditors
have appealed from the denial of their claim for  approximately  $80 million for
interest at default rates and enforcement  costs. This appeal was argued in July
2005 and awaits  decision.  In  addition,  Dow Corning is  vigorously  resisting
claims by the U.S Internal  Revenue  Service  asserting tax  deficiencies of $65
million  relating  to its 1995 and 1996  federal  income  tax  returns  and $117
million with respect to its 1997,  1998 and 1999  returns.  Dow Corning  expects
that  these  IRS  claims  will be  resolved  for  substantially  less  than  the
deficiencies  claimed.  There  are a number of other  claims  in the  bankruptcy
proceedings  against Dow Corning awaiting resolution by the U.S. District Court,
and it is  reasonably  possible  that Dow Corning may record  bankruptcy-related
charges in the future. There are no remaining tort claims against Corning, other
than those that will be channeled by the Plan into facilities established by the
Plan or otherwise defended by the Litigation Facility.

Pittsburgh Corning Corporation.  Corning and PPG Industries, Inc. (PPG) each own
50% of the capital stock of Pittsburgh Corning  Corporation (PCC). Over a period
of more than two decades,  PCC and several other  defendants  have been named in
numerous  lawsuits  involving  claims alleging  personal injury from exposure to
asbestos. On April 16, 2000, PCC filed for Chapter 11 reorganization in the U.S.
Bankruptcy Court for the Western District of Pennsylvania.  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. As a result of PCC's bankruptcy  filing,  Corning recorded an
after-tax  charge of $36 million in 2001 to fully impair its  investment  in PCC
and  discontinued  recognition  of  equity  earnings.  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  43,600  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 in April 2000,  PCC 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 in  which to
negotiate a plan of reorganization for PCC (the 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 reached  agreement  with the
representatives  of asbestos  claimants  for the  settlement  of all current and
future  asbestos  claims against us and Pittsburgh  Corning  Corporation  (PCC),
which might arise from PCC products or operations.  The proposed settlement,  if
the Plan is approved and becomes  effective,  will require Corning to relinquish
its equity interest in PCC, contribute its equity interest in Pittsburgh Corning
Europe N.V.  (PCE), a Belgian  corporation,  and contribute 25 million shares of
Corning common stock.  Corning also agreed to make cash payments with a value of
$131  million,  in March  2003,  over six years from the  effective  date of the
settlement.

Since March 28, 2003,  we have recorded  total net charges of $1,003  million to
reflect the initial  settlement  liability and  subsequent  adjustments  for the
change in the fair value of the components of the liability.

The fair value of the liability  expected to be settled by  contribution  of our
investment in PCE, assigned insurance proceeds, and the fair value of 25 million
shares of our common stock (totaling $849 million at March 31, 2006) is recorded
in the other accrued liabilities  component in our consolidated  balance sheets.
As the timing of this  obligation's  settlement  will depend on future  judicial
rulings (i.e., controlled by a third party and not Corning), this portion of the
PCC  liability is  considered a "due on demand"  obligation.  Accordingly,  this
portion of the  obligation  has been  classified  as a current  liability,  even
though it is possible that the  contribution  could be made beyond one year. The
remaining  portion of the settlement  liability  (totaling $154 million at March
31, 2006),  representing the net present value of the cash payments, is recorded
in the other liabilities component in our consolidated balance sheets.

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.
The  parties  filed  post-hearing  briefs and made final oral  arguments  to the
Bankruptcy  Court in November 2004.  The Bankruptcy  Court allowed an additional
round of briefing to address current case law  developments and heard additional
oral  arguments on March 16, 2005. In mid-April  2005, the proponents of the PCC
Plan  requested that the court rule on the pending  objections.  On February 28,
2006, the Bankruptcy Court requested the Plan proponents to delete references to
Section  105(a) of the  Bankruptcy  Code and resubmit the Plan.  On February 28,
2006, the Bankruptcy  Court requested the proponents to amend and refile the PCC
Plan. In late April 2006, the Bankruptcy Court allowed another round of briefing
on the objections  leading to additional oral arguments expected to be scheduled
in July  2006.  If the  Bankruptcy  Court does not  approve  the PCC Plan in its
current  form,  changes to the Plan are  probable as it is likely that the Court
will allow the  proponents  time to  propose  amendments.  The  outcome of these
proceedings is uncertain,  and  confirmation  of the current Plan or any amended
Plan is subject to a number of contingencies.  However, apart from the quarterly
mark-to-market  adjustment  in the value of the 25  million  shares  of  Corning
stock,  management  believes that the likelihood of a material adverse impact to
Corning's financial statements is remote.






Astrium. In December 2000, Astrium,  SAS and Astrium,  Ltd. filed a complaint in
the United States 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)  with  the  result  that  the  amount  of
electricity  the satellite can produce is allegedly  materially  reduced,  which
then reduces the effective life and value of each satellite. NetOptix has denied
causing the damages alleged and denied legal  liability.  In 2002,  co-defendant
Pilkington settled for $20 million and is no longer in this case. In April 2002,
the Court granted motions for summary  judgment by NetOptix and other defendants
on 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 had stayed the appeal  pending a decision  in the  Robinson  case
before  the  California  Supreme  Court  involving  similar  issues of law.  The
Robinson case was decided on December 23, 2004 and  reversed.  The Court granted
the  defendants'  request  for a briefing  schedule  under  which all  appellate
briefing was completed by March 15, 2006. In its  appellate  briefing,  NetOptix
continued to advocate for affirmance of the lower court's ruling.  Oral argument
is not likely to be set by the Ninth Circuit until the second half of 2006.

Grand Jury Investigation of Conventional  Cathode Ray Television Glass Business.
In August 2003,  Corning  Asahi Video  Products  Company (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.  A number of employees or former  employees  have 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.

Seoul  Guarantee  Insurance Co. and other  creditors  against  Samsung Group and
affiliates.  As of March 31, 2005,  Samsung  Corning  Precision  Glass Co., Ltd.
(Samsung Corning  Precision) and Samsung Corning Co. Ltd. (Samsung Corning) were
two of approximately  thirty co-defendants in a lawsuit filed by Seoul Guarantee
Insurance Co. and 14 other  creditors  (SGI and Creditors) for alleged breach of
an agreement that  approximately  thirty affiliates of the Samsung group entered
into with SGI and  Creditors  in September  1999.  The lawsuit is pending in the
courts of Korea.  According to the agreement,  the Samsung  affiliates agreed to
sell 3.5 million  shares of Samsung Life  Insurance  Co., Ltd. (SLI) by December
31, 2000,  which were  transferred  to SGI and Creditors in connection  with the
petition for court  receivership  of Samsung Motor Inc. In the lawsuit,  SGI and
Creditors  allege that, in the event that the proceeds of sale of the SLI shares
is less than 2.45 trillion Korean won (approximately $2.42 billion), the Samsung
affiliates  allegedly  agreed to compensate SGI and Creditors for the shortfall,
by other means, including Samsung affiliates' purchase of equity or subordinated
debentures  to be issued by SGI and  Creditors.  Any excess  proceeds  are to be
distributed  to the  Samsung  affiliates.  As of March 31,  2005,  the shares of
Samsung Life  Insurance  Co., Ltd. have not been sold. The suit asks for damages
of approximately $4.68 billion plus penalty interest.  Samsung Corning Precision
and Samsung Corning  combined  guarantees  should represent no more than 3.1% of
the Samsung  affiliates'  total financial  obligation.  Although noting that the
outcome of these matters is  uncertain,  Samsung  Corning  Precision and Samsung
Corning  have stated  that these  matters are not likely to result in a material
ultimate loss to their financial statements.  No claim in these matters has been
asserted against Corning Incorporated.






Ellsworth Industrial Park, Downers Grove, IL Environmental Litigation. In August
2005, Corning was named as a fourth party defendant in a class action, Ann Muniz
v.  Rexnord  Corp,  filed  in the U.S.  District  Court  for the N.D.  Illinois,
claiming an unspecified  amount of damages and asserting various personal injury
and  property  damage  claims  against a number of corporate  defendants.  These
claims  allegedly  arise from the release of  solvents  from the  operations  of
several  manufacturers  at the  Ellsworth  Industrial  Park into soil and ground
water.  In  March  2006,  the  District  Court  allowed  two   cross-claims  for
contribution  against  Corning and in April 2006, a second  amended  third-party
complaint for contribution against Corning.

In March  2006,  Corning  was  named as an  additional  party  defendant  in two
actions,  Bendik and Pote, filed in the Circuit Court of Cook County,  Illinois,
claiming an  unspecified  amount of damages and  asserting  personal  injury and
wrongful  death against a number of corporate  defendants as a result of alleged
ground   water   contamination   by  releases  of  hazardous   substances   from
manufacturing  operations at the Ellsworth  Industrial Park site. The sole basis
of  liability  against  Corning  in all of these  cases is the claim of  several
corporate  defendants  that Corning is the  successor to  Harper-Wyman  Company.
Corning  has denied  these  allegations  and  management  intends to  vigorously
contest  all  claims  against  Corning.  Management  is not able at this time to
estimate the range of outcomes in this matter.






ITEM 1A.  RISK FACTORS

In addition to other information set forth in this report,  you should carefully
consider  the factors  discussed  in Part I, Item 1A. Risk Factors in our Annual
Report  on Form  10-K/A  for the  year  ended  December  31,  2005  which  could
materially  impact our business,  financial  condition or future results.  Risks
disclosed in our Annual  Report on Form 10-K/A are not the only risks facing our
Company. Additional risks and uncertainties not currently known to us or that we
currently  deem  immaterial  may  materially   adversely  impact  our  business,
financial condition or operating results.

The information presented below updates, and should be read in conjunction with,
the risk factor  information  disclosed in our Annual  Report on Form 10-K/A for
the year ended December 31, 2005.

The Company has material weaknesses in internal control over financial reporting
and cannot assure you that additional material weaknesses will not be identified
in the future.  Our failure to implement and maintain effective internal control
over financial reporting could result in material misstatements in the financial
statements.

Management  has  identified  material  weaknesses  in our internal  control over
financial  reporting  as  defined  in the Public  Company  Accounting  Oversight
Board's  Auditing  Standard  No.  2  that  resulted  in the  restatement  of the
Company's annual consolidated financial statements as of and for the years ended
December 31,  2005,  2004,  and 2003 and the  quarterly  consolidated  financial
statements  for each of the  quarterly  periods in the years ended  December 31,
2005 and 2004. See "Item 9A. Controls and Procedures."

The  material  weaknesses  in the  Company's  internal  control  over  financial
reporting  during  the  periods  related  to  ineffective  controls  over 1) the
valuation   of  its  asbestos   settlement   charges  and  the   valuation   and
reconciliation of the related  liability related to the 2003 Pittsburgh  Corning
Corporation Asbestos Litigation Bankruptcy  Settlement,  and 2) the completeness
and accuracy of its equity investments.

Additionally,  this control  deficiency  could result in a  misstatement  of our
investments and equity in earnings of affiliated  companies that would result in
a  material  misstatement  to  the  annual  or  interim  consolidated  financial
statements that would not be prevented or detected.

We cannot assure you that additional material weaknesses in our internal control
over financial  reporting  will not be identified in the future.  Any failure to
maintain or implement  required new or improved  controls,  or any  difficulties
that may be  encountered  in their  implementation,  could result in  additional
significant  deficiencies or material  weaknesses,  cause the Company to fail to
meet its periodic reporting  obligations or result in material  misstatements in
the Company's financial statements. Any such failure could also adversely affect
the  results of  periodic  management  evaluations  and annual  auditor  reports
regarding the  effectiveness  of the Company's  internal  control over financial
reporting  required under Section 404 of the  Sarbanes-Oxley Act of 2002 and the
rules  promulgated under Section 404. The existence of a material weakness could
result in errors in our financial  statements that could result in a restatement
of financial statements.







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 first quarter of 2006:

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 (a)         Share (a)          Announced Plan (b)             Under the Plan (b)
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                                          
January 1-31, 2006                       262,285             $23.65                    0                              $0
February 1-28, 2006                      202,715             $24.21                    0                              $0
March 1-31, 2006                          54,414             $26.74                    0                              $0
- ------------------------------------------------------------------------------------------------------------------------------------
Total                                    519,414             $24.92                    0                              $0
- ------------------------------------------------------------------------------------------------------------------------------------


(a)  This column  reflects the  following  transactions  during the fiscal first
     quarter of 2006: (i) the deemed surrender to us of 457,793 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 61,621 shares of common stock to satisfy tax withholding
     obligations  in connection  with the vesting of restricted  stock issued to
     employees.

(b)  During  the  quarter  ended  March  31,  2006,  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.








ITEM 6.  EXHIBITS

(a) Exhibits

    Exhibit Number  Exhibit Name
    --------------  ------------

       3 (ii) 1     Bylaws  of  Corning   effective   as  of  December  6,  2000
                    (Incorporated  by  reference  to Exhibit  3(ii) of Corning's
                    Annual  Report on Form 10-K for the year ended  December 31,
                    2000).

       3 (ii) 2     Amendment  to Article  III,  Section 9, of Bylaws of Corning
                    effective as of February 5, 2003  (Incorporated by reference
                    to Exhibit  3(ii)2 of Corning's  Annual  Report on Form 10-K
                    for the year ended December 31, 2003).

        3(ii) 3     Amendment  to Article  III,  Section 8, of Bylaws of Corning
                    Incorporated effective as of April 27, 2006 (Incorporated by
                    reference  to Exhibit 99.1 of  Corning's  Current  Report on
                    Form 8-K filed on May 1, 2006).

          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










                                   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)






 May 10, 2006                                     /s/ JAMES B. FLAWS
- --------------                         -----------------------------------------
     Date                                           James B. Flaws
                                       Vice Chairman and Chief Financial Officer
                                             (Principal Financial Officer)




 May 10, 2006                                     /s/ JANE D. POULIN
- --------------                         -----------------------------------------
     Date                                           Jane D. Poulin
                                               Chief Accounting Officer
                                            (Principal Accounting Officer)




 May 10, 2006                                   /s/ KATHERINE A. ASBECK
- --------------                         -----------------------------------------
     Date                                        Katherine A. Asbeck
                                            Senior Vice President - Finance








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


Exhibit Number    Exhibit Name                                           Page
- --------------    ------------                                           ----

  3 (ii) 1        Bylaws of Corning effective as of December 6, 2000      57
                  (Incorporated by reference to Exhibit 3(ii) of
                  Corning's Annual Report on Form 10-K for the year
                  ended December 31, 2000).

  3 (ii) 2        Amendment to Article III, Section 9, of Bylaws of       69
                  Corning effective as of February 5, 2003
                  (Incorporated by reference to Exhibit 3(ii)2 of
                  Corning's Annual Report on Form 10-K for the year
                  ended December 31, 2003).

   3(ii) 3        Amendment to Article III, Section 8, of Bylaws of       70
                  Corning Incorporated effective as of April 27, 2006
                  (Incorporated by reference to Exhibit 99.1 of
                  Corning's Current Report on Form 8-K filed on
                  May 1, 2006).

     12           Computation of Ratio of Earnings to Fixed Charges       71

    31.1          Certification of Chief Executive Officer Pursuant       72
                  to Rule 13a-14(a) under the Exchange Act

    31.2          Certification of Chief Financial Officer Pursuant       73
                  to Rule 13a-14(a) under the Exchange Act

     32           Certification Pursuant to 18 U.S.C. Section 1350        74





                                                                Exhibit 3 (ii) 1

                              CORNING INCORPORATED

                                   -----------

                                     BY-LAWS
                                   -----------


                                   ARTICLE I.

                           Offices of the Corporation

ss.1.  Principal  Office.  The  principal  office and place of  business  of the
       -----------------
corporation shall be located in the City of Corning, Steuben County, New York.

ss.2. Other Offices. The Board of Directors may establish and discontinue,  from
      -------------
time to time,  other  offices and places of business as it deems  advisable  and
proper for the conduct of the company's business.

                                   ARTICLE II.

                            Meetings of Stockholders

ss.1.  Place of Meeting.  All meetings of stockholders of the corporation may be
       ----------------
held at such  place,  within or without  the State of New York,  as may be fixed
from time to time by the Board of Directors.

ss.2.  Annual Meeting.  The annual meeting of  stockholders  for the election of
       --------------
directors  and  consideration  of such  other  business  as may come  before the
meeting  shall be held on the last  Thursday  in April of each year,  or on such
other day,  which shall not be a legal  holiday,  as shall be  determined by the
Board of Directors.  Any previously scheduled annual meeting of stockholders may
be postponed by  resolution  of the Board of Directors  upon public notice given
prior to the date previously scheduled for such annual meeting of stockholders.

ss.3.  Special  Meetings.  Special meetings of the stockholders may be called at
       -----------------
any time by the Chairman of the Board, the Chairman of the Executive  Committee,
a Vice  Chairman or the  President  and shall be called by the  Secretary  or an
Assistant  Secretary  upon order of the Board of Directors,  the Chairman of the
Board of Directors or a majority of the directors.

ss.4.  Notice of  Meetings.  Notice of each  annual or  special  meeting  of the
       -------------------
stockholders shall be served either personally or by mail or electronically upon
each stockholder  entitled to vote thereat.  If served by mail, the notice shall
be sent postpaid  addressed to the  stockholder  at his address as it appears on
the stock record of the corporation. If served electronically,  the notice shall
be sent to the e-mail or  electronic  address on file with the  Corporation  and
verified as accurate and current prior to such  service.  Service of such notice
shall be made not less than ten nor more than  sixty  days  before  the  meeting
date,  unless the meeting is to be held elsewhere than at the principal  office,
in which case  service of the notice shall be made not less than twenty nor more
than sixty days before the meeting.

ss.5.  Waiver of Notice.  Notice of meeting need not be given to any stockholder
       ----------------
who submits a signed waiver of notice,  in person or by proxy,  either before or
after the meeting.  The attendance of any stockholder at a meeting, in person or
by proxy,  without protesting prior to the conclusion of the meeting the lack of
notice of such meeting, shall constitute a waiver of notice by him.

ss.6. Chairman and Secretary of Meeting. The Chairman of the Board of Directors,
      ---------------------------------
or, in his  absence  and in the  order  named,  the  Chairman  of the  Executive
Committee, a Vice Chairman or the President present at the meeting shall call to
order and preside at all  meetings of  stockholders,  and the  Secretary  of the
corporation,  or in  his  absence,  the  senior  of  the  Assistant  Secretaries
(determined by the order of their election)  present at the meeting shall act as
secretary.






ss.7.   Stockholders   Entitled  to  Vote.  Unless  otherwise  provided  in  the
        ---------------------------------
Preliminary  Certificate  of  Consolidation  forming this  corporation  or other
certificate filed pursuant to law, every stockholder of record shall be entitled
at  every  meeting  of the  corporation  to one vote  for  every  share of stock
standing in his name on the books of the corporation. The Board of Directors may
prescribe a period, not exceeding sixty days prior to the date of any meeting of
the  stockholders  or prior to the last day on which the consent or dissent of a
stockholder  may be  effectively  expressed  for any purpose  without a meeting,
during which no transfer of stock on the books of the  corporation  may be made;
or in lieu of  prohibiting  the  transfer  of stock may fix a time not more than
sixty days prior to the date of any meeting of stockholders or prior to the last
day on which the consent or dissent of stockholders may be effectively expressed
for any purpose without a meeting as the time as of which stockholders  entitled
to  notice of and to vote at such a  meeting  or whose  consent  or  dissent  is
required  or may be  expressed  for any  purpose,  as the case may be,  shall be
determined,  and all persons who were  holders of record of voting stock at such
time and no others shall be entitled to notice of and to vote at such meeting or
to express their consent or dissent as the case may be.

ss.8.  Quorum  and  Adjournment.  Holders  of  a  majority  of  the  issued  and
       ------------------------
outstanding  stock entitled to vote at the meeting shall  constitute a quorum at
all  meetings,   except  as  otherwise  provided  by  law,  by  the  Preliminary
Certificate of Consolidation  forming this corporation or by these By-Laws.  If,
however, such majority, represented either in person or by proxy, be not present
at any meeting, the stockholders entitled to vote thereat,  present in person or
by proxy,  shall have power to adjourn  the meeting  from time to time,  without
other notice than  announcement  at the meeting,  until the requisite  amount of
voting  stock  shall be  present;  provided,  however,  that  any  stockholders'
meeting, annual or special, whether or not a quorum is present, may be adjourned
from time to time by the Chairman of the meeting.  When the requisite  amount of
voting stock is present at an adjourned meeting,  any business may be transacted
which might have been transacted at the meeting as originally called.

ss.9. Vote of Stockholders.  At each meeting of stockholders,  every stockholder
      --------------------
entitled  to vote  shall  have the  right  to vote in  person  or by proxy  duly
appointed  by an  appropriate  instrument,  such as a  writing,  a  telegram,  a
cablegram or other means of electronic transmission,  in each case subscribed by
or on behalf of such stockholder, and dated not more than eleven months prior to
the meeting,  unless such instrument  provides for a longer period. The vote for
directors  shall be by ballot.  In a vote by ballot each ballot  shall state the
number of shares voted and the name of the  shareholder or proxy voting.  Except
as otherwise provided by law, or by the Preliminary Certificate of Consolidation
forming  this  corporation  or other  certificate  filed  pursuant  to law,  all
elections  and all  questions  shall be decided by a majority  vote of the stock
present.

                                  ARTICLE III.

                                    Directors

ss.1. Election and Term.
      -----------------

(a) At the 1985 annual meeting of  stockholders,  the directors shall be divided
into three  classes,  as nearly  equal in number as  possible,  with the term of
office of the first class to expire at the 1986 annual meeting of  stockholders,
the term of office of the second  class to expire at the 1987 annual  meeting of
stockholders  and the term of office  of the  third  class to expire at the 1988
annual  meeting of  stockholders.  Commencing  with the 1986  annual  meeting of
stockholders,  directors  elected to succeed  those  directors  whose terms have
thereupon  expired  shall be elected for a term of office to expire at the third
succeeding annual meeting of stockholders after their election. If the number of
directors is changed,  any increase or decrease shall be  apportioned  among the
classes so as to maintain or attain, if possible,  the equality of the number of
directors  in each  class,  but in no case  will a  decrease  in the  number  of
directors  shorten the term of any incumbent  director.  If such equality is not
possible,  the increase or decrease  shall be  apportioned  among the classes in
such a way that the  difference  in the number of  directors  in any two classes
shall not exceed one.

(b) Whenever the holders of any one or more series of Preferred  Stock issued by
the  corporation  shall have the right,  voting  separately by series,  to elect
directors at an annual or a special meeting of stockholders,  the election, term
of office,  filling of vacancies and other features of such directorships  shall
be governed  by  Sections  1(a),  5 and 6 of this  Article III unless  expressly
otherwise  provided by the resolution or resolutions  providing for the creation
of such series.






ss.2. Nominations and Stockholder Business.
      ------------------------------------

(a) Annual Meeting of Stockholders.
    ------------------------------

(1)  Nominations  of  persons  for  election  to the Board of  Directors  of the
corporation  and the proposal of business to be considered  by the  stockholders
may  be  made  at  an  annual  meeting  of  stockholders  (i)  pursuant  to  the
corporation's  notice of meeting,  (ii) by or at the  direction  of the Board of
Directors or (iii) by any  stockholder of the  corporation who was a stockholder
of record at the time of giving of notice provided for in this Section 2, who is
entitled to vote at the meeting and who complied with the notice  procedures set
forth in this Section 2.

(2) For  nominations or other  business to be properly  brought before an annual
meeting by a  stockholder  pursuant to clause (iii) of paragraph  (a)(1) of this
Section 2, the  stockholder  must have given timely notice thereof in writing to
the Secretary of the corporation.  To be timely, a stockholder's notice shall be
delivered to the Secretary at the principal executive offices of the corporation
not less than 90 days nor more than 120 days prior to the first  anniversary  of
the preceding year's annual meeting;  provided,  however, that in the event that
the date of the annual  meeting is  advanced  by more than 30 days or delayed by
more than 60 days from such  anniversary  date,  notice by the stockholder to be
timely must be so delivered  not earlier than the 120th day prior to such annual
meeting  and not later than the close of  business  on the later of the 90th day
prior to such annual  meeting or the 10th day  following the day on which public
announcement  of the date of such  meeting is first made.  In no event shall the
public  announcement of an adjournment of an annual meeting  commence a new time
period  for the  giving of a  stockholder's  notice  as  described  above.  Such
stockholder's  notice shall set forth (i) as to each person whom the stockholder
proposes to nominate for election or  reelection  as a director all  information
relating to such person that is required to be  disclosed  in  solicitations  of
proxies for  election  of  directors,  or is  otherwise  required,  in each case
pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended
(the "Exchange Act")  (including such person's written consent to being named in
the proxy statement as a nominee and to serving as a director if elected);  (ii)
as to any other  business  that the  stockholder  proposes  to bring  before the
meeting,  a brief  description of the business  desired to be brought before the
meeting,  the  reasons  for  conducting  such  business  at the  meeting and any
material interest in such business of such stockholder and the beneficial owner,
if any, on whose  behalf the proposal is made;  and (iii) as to the  stockholder
giving  the  notice  and the  beneficial  owner,  if any,  on whose  behalf  the
nomination or proposal is made (A) the name and address of such stockholder,  as
they appear on the corporation's books, and of such beneficial owner and (B) the
class and number of shares of the corporation  which are owned  beneficially and
of record by such stockholder and such beneficial owner.

(3) Notwithstanding  anything in the second sentence of paragraph (a)(2) of this
Section 2 to the  contrary,  in the event  that the  number of  directors  to be
elected to the Board of Directors of the  corporation  is increased and there is
no public announcement naming all of the nominees for Director or specifying the
size of the increased  Board of Directors  made by the  corporation  at least 90
days prior to the first  anniversary of the preceding  year's annual meeting,  a
stockholder's notice required by this Section 2 shall also be considered timely,
but only with respect to nominees for any new position created by such increase,
if it shall be delivered to the Secretary at the principal  executive offices of
the  corporation  not later than the close of business on the 10th day following
the day on which such public announcement is first made by the corporation.

(b) Special Meetings of Stockholders. Only such business shall be conducted at a
    --------------------------------
special  meeting of  stockholders  as shall have been brought before the meeting
pursuant  to the  corporation's  notice of meeting.  Nominations  of persons for
election  to the  Board  of  Directors  may be  made  at a  special  meeting  of
stockholders at which directors are to be elected pursuant to the  corporation's
notice of meeting (i) by or at the  direction  of the Board of Directors or (ii)
by any stockholder of the corporation who is a stockholder of record at the time
of giving of notice  provided  for in this  Section 2, who shall be  entitled to
vote at the meeting and who  complies  with the notice  procedures  set forth in
this Section 2. Nominations by stockholders of persons for election to the Board
of  Directors  may be made at such a  special  meeting  of  stockholders  if the
stockholder's  notice  required by  paragraph  (a)(2) of this Section 2 shall be
delivered to the Secretary at the principal executive offices of the corporation
not earlier than the 120th day prior to such special  meeting and not later than
the close of business on the later of the 90th day prior to such special meeting
or the 10th day following the day on which public  announcement is first made of
the date of the  special  meeting and of the  nominees  proposed by the Board of
Directors to be elected at such meeting.






(c) General.
    -------

(1) Only such persons who are nominated in accordance  with the  procedures  set
forth in this  Section 2 shall be eligible to serve as  directors  and only such
business  shall be  conducted  at a meeting of  stockholders  as shall have been
brought  before the meeting in accordance  with the procedures set forth in this
Section  2.  The  Chairman  of the  meeting  shall  have the  power  and duty to
determine whether a nomination or any business proposed to be brought before the
meeting was made in accordance  with the  procedures set forth in this Section 2
and, if any  proposed  nomination  or business  is not in  compliance  with this
Section 2, to declare that such defective proposal shall be disregarded.

(2) For purposes of this Section 2, "public  announcement" shall mean disclosure
in a press release  reported by the Dow Jones News Service,  Associated Press or
comparable  national  news  service  or in a  document  publicly  filed  by  the
corporation with the Securities and Exchange Commission pursuant to Sections 13,
14 or 15(d) of the Exchange Act.

(3)  Notwithstanding  the foregoing  provisions of this Section 2, a stockholder
shall also comply with all applicable  requirements  of the Exchange Act and the
rules and  regulations  thereunder with respect to the matters set forth in this
Section 2. Nothing in this Section 2 shall be deemed to affect any rights of (i)
stockholders  to request  inclusion  of  proposals  in the  corporation's  proxy
statement  pursuant to Rule 14a-8 under the  Exchange Act or (ii) the holders of
any Series Preferred Stock to elect Directors under specific circumstances.

ss.3.  Qualification.  Directors  need not be  stockholders.  Acceptance  of the
       -------------
office may be expressed  orally or in writing,  except as otherwise  provided in
these By-Laws.

ss.4. Number. The number of directors constituting the Board of Directors of the
      ------
corporation  shall be not less than nine nor more  than  twenty-four,  the exact
number within such minimum and maximum limitations to be fixed from time to time
by the Board of Directors  pursuant to a resolution  adopted by the  affirmative
vote of a majority of the whole Board of Directors;  and such exact number shall
be  twenty-one  unless  otherwise  determined  by a  resolution  so adopted by a
majority of the whole Board of Directors.  As used in these  By-Laws,  the terms
"whole Board of Directors" and "whole Board" mean the total authorized number of
directors which the corporation would have if there were no vacancies.

ss.5. Vacancies. Subject to the rights of the holders of any series of Preferred
      ---------
Stock or any other  class of capital  stock of the  corporation  (other than the
Common Stock) then  outstanding,  vacancies in any class of directors  resulting
from death, resignation,  retirement,  disqualification,  removal from office or
other cause shall, if occurring prior to the expiration of the term of office of
such  class,  be  filled  only  by the  affirmative  vote of a  majority  of the
remaining  directors  of the whole Board of Directors  then in office,  although
less than a quorum or by the sole  remaining  director.  Any director so elected
shall hold office until the next annual  meeting of  stockholders  and until his
successor is elected and qualified.

ss.6.  Removal of Directors.  Subject to the rights of the holders of any series
       --------------------
of Preferred Stock or any other class of capital stock of the corporation (other
than the Common Stock) then outstanding, (i) any director, or the whole Board of
Directors,  may be removed by the stockholders  from office at any time prior to
the  expiration  of his  term of  office,  but only  for  cause  and only by the
affirmative vote of the holders of record of outstanding  shares  representing a
majority of the voting power of all of the  outstanding  shares of capital stock
of the corporation entitled to vote generally in the election of directors,  and
(ii) any  director  may be  removed  from  office by the  affirmative  vote of a
majority of the whole Board of Directors, at any time prior to the expiration of
his term of office, but only for cause.






ss.7.  General Powers.  The business,  properties and affairs of the corporation
       --------------
shall be managed by the Board of Directors.  Notwithstanding any other provision
of the Preliminary Certificate of Consolidation and these By-Laws and subject to
the other  provisions  of Sections 1(a) and (b), 4, 5 and 6 of this Article III,
the Board of  Directors  shall  determine  the rules and  procedures  that shall
affect the directors' power to manage and direct the business and affairs of the
corporation.  Without  limiting  the  foregoing,  the Board of  Directors  shall
designate  and empower  committees  of the Board of  Directors,  shall elect and
empower  the  officers  of the  corporation  and fix  their  salaries  and other
compensation,  may  appoint  and  empower  other  officers  and  agents  of  the
corporation,  may grant  general  or  limited  authority  to its  Chairman,  the
Chairman of the Executive  Committee,  the Vice Chairmen,  the President and the
Group  Presidents  and other  officers  and agents of the  corporation  to make,
execute and deliver  contracts and other  instruments  and documents in the name
and on behalf of the corporation and under its seal without  specific  authority
in each case,  and shall  determine  to the extent not  inconsistent  with these
By-Laws the time and place of, and the notice  requirements for, Board meetings,
as well as quorum and voting  requirements for, and the manner of taking,  Board
action. In addition, the Board may exercise all of the powers of the corporation
and do all lawful acts and things which are not reserved to the  stockholders by
statute, the Preliminary Certificate of Consolidation or the By-Laws.

ss.8. Executive Committee.  The Board of Directors may, by resolution adopted by
      -------------------
vote of a majority  of the whole  Board,  appoint  an  Executive  Committee,  to
consist  of the  Chairman  of the  Board of  Directors  ex  officio,  the  chief
executive  officer of the  corporation  and at least one other  Director,  which
shall be empowered  to perform  such  functions as may be delegated to it by the
Board.  The  Chairman  of the Board of  Directors  shall act as  chairman of the
Executive  Committee unless another member shall have been appointed chairman by
the Board of Directors.

ss.9. Audit Committee.  The Board of Directors,  not later than April 30 in each
      ---------------
year,  shall by  resolution  adopted  by vote of a majority  of the whole  Board
appoint an Audit  Committee to consist of three or more Directors  (none of whom
shall be an officer of the  corporation or of any of its  subsidiary  companies)
and may appoint one of the members of such  Committee  to be its  Chairman.  The
Committee shall recommend,  annually,  a firm of certified public accountants to
be  appointed  by the Board of  Directors to audit the books and accounts of the
corporation  and its subsidiary  companies and to report to the  Committee.  The
Committee  shall confer with such  accountants  and shall determine the scope of
the  audits of the books and  accounts  of the  corporation  and its  subsidiary
companies and shall bring to the attention of the Board of Directors those items
relating  to the  audits or the  corporation's  accounting  practices  which the
Committee and the auditors believe to merit Board review. As soon as practicable
after the close of each fiscal year the Committee shall transmit to the Board of
Directors the  consolidated  balance sheet of the corporation and its subsidiary
companies  as at the end of each such  fiscal  year and  related  statements  of
consolidated  income and  surplus  for such year,  with the  certificate  of the
accountants with respect thereto;  and such financial statements and certificate
shall  be  incorporated  in  the  Annual  Report  to  the  stockholders  of  the
corporation.  The Audit  Committee  shall establish the rules for the conduct of
its  meetings;  shall keep  minutes of its acts and  proceedings,  which in each
instance  shall be reported at the next meeting of the Board of  Directors;  and
shall appoint one of its members to act as its Secretary.

ss.10. May Adopt Savings Plans and Sell Stock to Employees.  The Board may, from
       ---------------------------------------------------
time to time, adopt,  modify and discontinue  savings plans for the promotion of
saving  and  thrift  among  the   company's   employees   and  make   reasonable
contributions  on behalf of the corporation for such purposes.  It may also sell
Preferred  stock to the  employees  on an  installment  basis  whereby  payments
therefor are deducted from salaries and wages.  In addition it may, from time to
time,  issue  and sell  over a period of time and on a  deferred  payment  basis
unissued common stock, for not less than the par value thereof but for less than
its market value, to employees of the company,  as it may deem advisable for the
best interests of the corporation.  The term "employees" as used in this section
shall include officers and directors.






ss.11. May Make Provision for the Payment of Retirement Annuities or Pensions to
       -------------------------------------------------------------------------
Employees.  The Board may from time to time make such  provision for the payment
- ---------
of retirement  annuities or pensions to the  employees of the company  including
officers of the company,  as in its  discretion the Board may deem advisable and
the  Board  may  from  time to time  adopt  and  carry  out any plan or plans of
providing  such  annuities or pensions or modify,  discontinue  or terminate any
such plan as may then be in force.  If any such  retirement  annuity  or pension
plan entitles  members of the Board to  participate as employees of the company,
every member of the Board shall be entitled to vote upon any matter  relating to
the adoption,  administration,  carrying out,  modification,  discontinuance  or
termination of any such plan. The Board shall have power to appropriate funds of
the  company  to defray,  in whole or in part,  the cost of  providing  any such
retirement  annuities or pensions  which may be based upon services  rendered by
employees  prior to the date of  establishment  or modification of such plan and
upon services to be rendered  thereafter  prior to the retirement  date provided
therein and may obligate the company to make payments toward  defraying any such
expenses over a period of years, subject always to the power of the Board in its
discretion to modify, discontinue and terminate any such plan to the extent then
permitted in existing tax or other laws.  The Board shall have full power in its
discretion to provide for the  administration of any such retirement  annuity or
pension  plan  and the  investment  and  reinvestment  of  funds  therein  by an
insurance company,  trustee,  or other agency under such terms and conditions as
the Board may deem advisable or to provide for the  administration  of such plan
and the investment  and  reinvestment  of the funds therein by the company.  The
Board shall have full power in its  discretion  to delegate to such  committees,
individuals  or  independent  consultants  such part of the carrying out of such
plan as in its discretion it may deem advisable.

ss.12.  Meetings  of the  Board;  Quorum  and  Manner  of  Acting.  The Board of
        ---------------------------------------------------------
Directors  may meet and  organize  immediately  after and at the place where the
annual meeting of stockholders is held, without notice of such meeting, provided
a majority of the whole Board  shall be present.  Regular  meetings of the Board
may be held  without  notice  at such time and place as from time to time may be
determined  by the  Board.  Special  meetings  of the Board or of any  Committee
thereof may be called by the Chairman of the Board of Directors, the Chairman of
the Executive Committee, a Vice Chairman or the President and shall be called by
the Secretary or, in his absence, an Assistant Secretary, on the written request
of any  two  directors.  Notice  of any  special  meeting  of the  Board  or any
Committee  thereof shall be mailed to each director,  or each Committee  member,
including  alternates  as the case may be,  addressed to him at his residence or
usual place of  business,  not later than the second day before the day on which
the meeting is to be held, or shall be sent to him at such place by rapifax,  by
telegraph,  or by  other  means  such  as  electronic  advice  or  be  delivered
personally,  or by telephone, not later than the day before the day on which the
meeting is to be held.  Notice of any  meeting of the Board or of any  Committee
need not be given, however, to any director, if waived by him in writing, either
before or after such meeting be held,  or if he shall be present at the meeting;
and any meeting of the Board of Directors or of any  Committee  shall be a legal
meeting  without any notice thereof having been given,  if all the members shall
be present  thereat.  A majority of the  directors  in office at the time of any
regular  or  special  meeting  of the Board or any  Committee  thereof  shall be
present  in person  at such  meeting  in order to  constitute  a quorum  for the
transaction  of business.  Any one or more  directors  or Committee  members may
participate  in any meeting of the Board or any Committee  thereof by means of a
conference telephone or similar communications  equipment permitting all persons
participating in such meeting to hear each other at the same time, participation
by such  means to  constitute  presence  in  person at such  meeting.  Except as
otherwise required by statute or by the Preliminary Certificate of Consolidation
forming this  corporation or other  certificate  filed pursuant to law or by the
By-Laws,  the act of a majority of the directors or Committee members present at
any such  meeting at which a quorum is present  shall be the act of the Board of
Directors or any Committee  thereof.  In the absence of a quorum,  a majority of
the directors or Committee  members present may adjourn the meeting from time to
time until a quorum be had.  Notice of any adjourned  meeting need not be given.
Action  by the Board or any  Committee  thereof  may be taken  without a meeting
provided  that all members of the Board or  Committee  consent in writing to the
adoption of a resolution  authorizing  such action,  such resolution and written
consent  thereto  by the  directors  or  Committee  members to be filed with the
minutes of the proceedings of the Board or Committee.

ss.13.  Directors' Fees. In consideration of his serving in such capacity,  each
        ---------------
director  of the  corporation,  other than  directors  who are  officers  of the
corporation or any of its subsidiary companies,  shall be entitled to receive an
annual fee in such  amount and  payable  in such  installments,  as the Board of
Directors,  by vote of a  majority  of the  whole  Board,  may from time to time
determine.  The Board of Directors shall also have authority to determine,  from
time to time, the amount of compensation  which shall be paid to its members for
attendance  at meetings of any committee of the Board as well as to any director
rendering special services to the corporation.






                                   ARTICLE IV.

                                    Officers

ss.1.  Officers.  The elected officers of the corporation shall be a Chairman of
       --------
the Board of Directors  (who shall be a director),  a Chairman of the  Executive
Committee,  one or  more  Vice  Chairmen,  a  President  or one  or  more  Group
Presidents,  a Controller,  a General Counsel, a Secretary and a Treasurer.  The
Board of  Directors  may elect or appoint an  Honorary  Chairman of the Board of
Directors,  an Honorary  Vice  Chairman of the Board of  Directors,  an Honorary
Chairman of the Executive Committee,  one or more Honorary Vice Presidents,  and
corresponding  Officers  Emeriti:  and  either  the  Board of  Directors  or the
Executive  Committee may elect or appoint one or more Executive Vice Presidents,
one or more Senior Vice  Presidents,  one or more Vice  Presidents,  one or more
Assistant Secretaries,  one or more Assistant Treasurers,  one or more Assistant
Controllers, and such other assistant officers and agents as, from time to time,
may appear to be  necessary  or  advisable  in the conduct of the affairs of the
Corporation. The Board of Directors may designate an officer as the principal or
chief executive officer of the corporation who, under the direction of the Board
of Directors,  shall have the general management,  direction and superintendence
of the business and affairs of the corporation.  The Board of Directors may also
designate an officer (or two or more officers acting  together) as the principal
operating  officer of the  corporation  with  responsibility  for the  business,
property  and affairs of the  corporation.  Either the Board of Directors or the
Executive  Committee may designate one or more officers or assistant officers as
the principal  financial officer of the corporation or the principal  accounting
officer of the  corporation.  The same person may be elected or appointed to two
or more offices except that no person shall  simultaneously  hold the offices of
President or Group President and Secretary.  So far as practicable,  all elected
officers  shall be elected  at the  organization  meeting of the Board,  in each
year, and shall hold office until the  organization  meeting of the Board in the
next subsequent year and until their respective  successors are chosen;  but any
officer, elected or appointed, may be removed at any time, either for or without
cause,  by vote of a majority of the whole Board of  Directors,  at any meeting.
All officers shall hold office during the pleasure of the Board.  If any vacancy
occurs in any office,  the Board of Directors  or the  Executive  Committee,  as
provided  above,  may elect or appoint a successor  to fill such vacancy for the
remainder of the term.

ss.2. Chairman of the Board of Directors. The Chairman of the Board of Directors
      ----------------------------------
shall  preside,  when present,  at all meetings of the Board of Directors and of
the shareholders  and at all meetings of the Executive  Committee in the absence
of a chairman  of such  Committee  appointed  by the  Board.  He shall have such
further  powers and duties as may be given to him by the Board of  Directors  or
the Executive Committee.

ss.3.  Chairman  of the  Executive  Committee.  The  Chairman  of the  Executive
       --------------------------------------
Committee  shall  preside,  when  present,  at all  meetings  of  the  Executive
Committee.  He shall act in a general  consultative and advisory capacity to the
Chairman of the Board of Directors and shall have such further powers and duties
as may be given to him by the Board of Directors,  the Executive  Committee,  or
the Chairman of the Board of Directors.

ss.4.  Vice  Chairmen.  The Vice  Chairmen  shall  perform,  in the  absence  or
       --------------
incapacity  of the  Chairman of the Board of  Directors  and the Chairman of the
Executive  Committee or when so directed by either,  the duties of such officer.
They shall have such further powers and duties as may be given them by the Board
of Directors, the Executive Committee, the Chairman of the Board of Directors or
the Chairman of the Executive Committee.

ss.5. President. The President, under the direction of the Chairman of the Board
      ---------
of Directors, shall have superintendence of the business, properties and affairs
of the corporation. He shall have such further powers and duties as may be given
him by the Board of Directors,  the Executive Committee,  or the Chairman of the
Board of Directors. In the absence or incapacity of the Chairman of the Board of
Directors,  the Chairman of the Executive  Committee and the Vice  Chairmen,  he
shall perform the duties of those officers.

ss.6. Group President. A Group President shall, under the direction of the chief
      ---------------
operating officer of the corporation,  or if no one has been so designated,  the
Chairman of the Board of Directors, have superintendence of such segments of the
business,  properties and affairs of the corporation and such further powers and
duties  as may be given  or  assigned  to him by the  Board  of  Directors,  the
Executive  Committee,  the Chairman of the Board of Directors or the Chairman of
the Executive Committee.






ss.7.  Executive Vice  Presidents.  The Executive Vice Presidents  shall perform
       --------------------------
such  duties  and shall  have such  powers as may be given  them by the Board of
Directors,  the Executive Committee, the Chairman of the Board of Directors, the
Chairman of the Executive Committee, a Vice Chairman or the President or a Group
President.

ss.8.  Senior Vice  Presidents.  The Senior Vice  Presidents  shall perform such
       -----------------------
duties  and  shall  have  such  powers  as may be  given  them by the  Board  of
Directors,  the Executive Committee, the Chairman of the Board of Directors, the
Chairman of the  Executive  Committee,  the Vice  Chairmen or the President or a
Group  President.  From time to time one of the Senior  Vice  Presidents  may be
designated as the Senior Vice  President for Finance.  The Senior Vice President
for Finance may hold any other office in the corporation.

ss.9. Vice  Presidents.  The Vice Presidents shall perform such duties and shall
      ----------------
have such powers as may be given them by the Board of  Directors,  the Executive
Committee, the Chairman of the Board of Directors, the Chairman of the Executive
Committee,  the  Vice  Chairmen,  the  President  or a  Group  President,  or an
Executive Vice President.

ss.10. Treasurer. The Treasurer shall have the care and custody of the corporate
       ---------
funds and securities.  He shall deposit all moneys and other valuable effects in
the name and to the credit of the  corporation  in such  depositories  as may be
designated  by the  Board of  Directors.  He  shall  disburse  the  funds of the
corporation  in the manner  ordered by the Board He shall upon request render an
account of all his  transactions  as  Treasurer  to the Board of  Directors.  He
shall, at all reasonable  hours,  exhibit his books and accounts to any director
upon application. He or an Assistant Treasurer or such other officers, directors
or agents as may be designated by the Board of Directors  shall endorse  checks,
notes or drafts payable to the order of the corporation and sign and countersign
checks,  drafts and orders for the payment or withdrawal of moneys or securities
on deposit in the corporate  accounts in such manner as the Board may direct. He
shall  have such  further  powers and duties as may be given him by the Board of
Directors,  the Executive Committee, the Chairman of the Board of Directors, the
Chairman of the Executive Committee, a Vice Chairman, or the President.

ss.11.  Secretary.  The Secretary  shall keep the minutes of the meetings of the
        ---------
Board of Directors and of the Executive  Committee and of the  stockholders.  He
shall  attend to the giving and  serving of all notices of the  corporation.  He
shall affix the seal of the corporation to all certificates of stock,  except in
cases where the transfer  agent of the  corporation  is  authorized to affix the
seal. He shall have charge of the stock certificate  books,  other than those in
the hands of the  transfer  agent,  and such other books and papers as the Board
may direct.  He shall attend to such  correspondence  as may be assigned to him,
and perform all other  duties  incidental  to his office.  He shall keep a stock
record  containing the names,  alphabetically  arranged,  of all persons who are
stockholders of the corporation,  showing their places of residence,  the number
of  shares of stock  held by them  respectively,  and the time when they  became
owners.  He shall have such further powers and duties as may be given him by the
Board of  Directors,  the  Executive  Committee,  the  Chairman  of the Board of
Directors,  the  Chairman of the  Executive  Committee,  a Vice  Chairman or the
President.

ss.12.  General  Counsel.  The General Counsel shall be the legal adviser of the
        ----------------
corporation. The General Counsel may hold any other office in the corporation.

ss.13.  Controller.  The  Controller  shall be  responsible  for and have active
        ----------
control of all matters  pertaining to the accounts of the corporation.  He shall
audit all payrolls and  vouchers and shall direct the manner of  certifying  the
same;  shall  supervise  the manner of keeping all vouchers for payments and all
other documents relating to such payments;  shall receive, audit and consolidate
all operating and financial  statements of the corporation and its subsidiaries;
and shall have the care,  custody and supervision of the books of account of the
corporation.  He shall, at all reasonable hours,  exhibit his books and accounts
to any director upon application.  He shall, upon request,  render an account of
the financial  condition of the corporation to the Board of Directors.  He shall
have  such  further  powers  and  duties  as may be  given  him by the  Board of
Directors,  the Executive Committee, the Chairman of the Board of Directors, the
Chairman of the Executive Committee, a Vice Chairman or the President.

ss.14. Assistant Secretaries.  Assistant Secretaries shall perform the duties of
       ---------------------
the  Secretary  in the  absence of the  Secretary,  and shall have such  further
powers  and  duties  as may be given  to them by the  Board  of  Directors,  the
Executive Committee, the Chairman of the Board of Directors, the Chairman of the
Executive Committee, a Vice Chairman, the President or the Secretary.






ss.15.  Assistant  Treasurers.  Assistant Treasurers shall perform the duties of
        ---------------------
the  Treasurer  in the  absence of the  Treasurer,  and shall have such  further
powers  and  duties  as may be given  to them by the  Board  of  Directors,  the
Executive Committee, the Chairman of the Board of Directors, the Chairman of the
Executive Committee, a Vice Chairman, the President or the Treasurer.

ss.16. Assistant Controllers.  Assistant Controllers shall perform the duties of
       ---------------------
the  Controller  in the absence of the  Controller,  and shall have such further
powers  and  duties  as may be given  to them by the  Board  of  Directors,  the
Executive Committee, the Chairman of the Board of Directors, the Chairman of the
Executive Committee, a Vice Chairman of the Board of Directors, the President or
the Controller.

ss.17.  Emeriti and Honorary Officers.  No individual elected or appointed to an
        -----------------------------
Honorary  Office or an Emeritus Office pursuant to this Article IV shall have as
a result of such election or appointment any rights,  duties or responsibilities
with respect to the business or affairs of this corporation as determined by law
or the By-Laws of this corporation.

                                   ARTICLE V.

                                  Capital Stock

ss.1.  Payments.  All payments for stock of the corporation shall be received by
       --------
the Treasurer.  Failure to pay an  installment  upon a stock  subscription  when
required to be paid by the Board of  Directors  shall work a  forfeiture  of the
shares of stock in arrears,  pursuant to Section 503 of the Business Corporation
Law of the State of New York.

ss.2.  Certificates of Stock. The stock of the corporation  shall be represented
       ---------------------
by certificates  signed by the Chairman of the Board of Directors,  the Chairman
of the Executive  Committee,  a Vice Chairman or the President and the Secretary
or an Assistant Secretary or the Treasurer or an Assistant Treasurer, and may be
sealed with the seal of the corporation or a facsimile  thereof.  Where any such
certificate is manually  countersigned by either a transfer agent or a registrar
(other than the corporation  itself or its employee) any other signature on such
certificate  may be a  facsimile,  engraved,  stamped  or  printed.  In case any
officer who has signed or whose  facsimile  signature  has been placed upon such
certificate  shall have ceased to be such officer  before such  certificate  was
issued,  it may be issued by the corporation  with the same effect as if he were
such officer at the date of issue.

ss.3.  Transfer  Agents  and  Registrars.  The Board of  Directors  may,  in its
       ---------------------------------
discretion,  appoint  responsible  banks or trust  companies or other  qualified
institutions  in the Borough of  Manhattan,  in the City of New York and in such
other  cities or states as the  Board  may deem  advisable,  to act as  transfer
agents  or  registrars  of  the  stock  of  the  corporation;   and,  upon  such
appointments   being  made,   no  stock   certificates   shall  be  valid  until
countersigned  by one of such  transfer  agents  and  registered  by one of such
registrars.

ss.4.  Transfers.  Transfers  of  stock  shall  be  made  on  the  books  of the
       ---------
corporation only by the person named in the certificate or by attorney  lawfully
constituted in writing and upon surrender and  cancellation  of a certificate or
certificates  for a like number of shares of the same class of stock,  with duly
executed  assignment and power of transfer endorsed thereon or attached thereto,
and with such proof of the  authenticity of the signatures as the corporation or
its agents may reasonably require.

ss.5. Determination of Stockholders of Record for Certain Purposes. The Board of
      ------------------------------------------------------------
Directors may fix a time, not exceeding  sixty days preceding the date fixed for
the  payment  of any  dividend,  or the  making of any  distribution  or for the
delivery of  evidences  of rights or  evidences  of interest  arising out of any
change,  conversion  or  exchange  of capital  stock,  as a record  time for the
determination  of the  stockholders  entitled  to  receive  any  such  dividend,
distribution,  rights or interest. The Board of Directors at its option, in lieu
of so fixing a record  time,  may  prescribe a period not  exceeding  sixty days
prior to the date for such  payment,  distribution  or delivery  during which no
transfer of stock on the books of the corporation may be made.






ss.6.  Stockholders of Record  Recognized.  The corporation shall be entitled to
       ----------------------------------
treat the  holder of record of any stock  certificate  as the holder in fact and
owner of the shares represented  thereby and shall not be bound to recognize any
equitable  claim to or interest  in such stock on the part of any other  person,
whether or not it shall have express or other  notice  thereof save as expressly
provided by the laws of New York.

ss.6.  Lost  Certificate.  In case any  certificate  of  stock  shall be lost or
       -----------------
destroyed, the Board of Directors, in its discretion, may authorize the issue of
a substitute  certificate in place of the certificate so lost or destroyed,  and
may cause such  substitute  certificate to be  countersigned  by the appropriate
transfer agent and registered by the appropriate registrar;  provided,  that, in
each such case, the applicant for a substitute  certificate shall furnish to the
corporation and to such of its transfer agents and registrars as may require the
same,  evidence  to  their  satisfaction,  in their  discretion,  of the loss or
destruction  of such  certificate  and of the  ownership  thereof  and also such
security and indemnity as may by them be required.

                                   ARTICLE VI.

                             Inspectors of Election

ss.1. Inspectors of Election. At every meeting of stockholders the vote shall be
      ----------------------
conducted  by one or more  inspectors  of  election  elected at the last  annual
meeting of stockholders or, if not so elected, appointed for that purpose by the
Board of Directors or, if not so elected or  appointed,  elected by a per capita
vote of the  stockholders  present at the meeting in person or by proxy; and all
questions  respecting the  qualification of voters,  the validity of the proxies
and the  acceptance  or rejection  of votes shall be decided by such  inspectors
who,  before  entering upon the  discharge of their duties,  shall be duly sworn
faithfully  to execute  the duties of  inspectors  at such  meeting  with strict
impartiality,  and  according  to the best of their  ability.  If any  inspector
elected or appointed to act at any meeting  shall be absent or refuse to act, or
if his office shall become vacant,  the  stockholders  present at the meeting in
person or by proxy shall, by a per capita vote, appoint another inspector to act
in his place.

                                  ARTICLE VII.

                                      Seal

ss.1.  Seal.  The seal of the  corporation  shall be in the form of a circle and
       ----
shall bear the name of the corporation followed by the words "Corning,  NY", the
year of its  incorporation,  and in the center of the circle the words  "Founded
1851".

ss.2.  Affixing  and  Attesting.  The  seal of the  corporation  shall be in the
       ------------------------
custody  of the  Secretary,  who  shall  have  power to  affix it to the  proper
corporate instruments and documents,  and who shall attest it. In his absence it
may be affixed and attested by an Assistant Secretary or affixed and attested by
the Treasurer or an Assistant Treasurer.  The transfer agent of the stock of the
corporation  may  have  a  facsimile   thereof  and  affix  the  same  to  stock
certificates issued by it. ARTICLE VIII.

                                  Miscellaneous

ss.1.  Signatures  to  Negotiable  Paper.  All checks,  drafts,  notes and other
       ---------------------------------
negotiable  instruments of the corporation  shall be signed,  countersigned  and
endorsed by such  directors,  officers and agents as the Board of Directors  may
designate from time to time.

ss.2.  Delegation  of Duties.  In the absence of any  officer,  or for any other
       ---------------------
reason,  the Board of Directors  may delegate the powers or duties of an officer
to another officer or director.

ss.3.  Dividends.  Dividends  upon  the  shares  of  the  capital  stock  of the
       ---------
corporation may be declared and paid out of the net assets of the corporation in
excess of its capital,  as often and at such times as the Board of Directors may
determine,  subject to the limitations set forth in the Preliminary  Certificate
of Consolidation  forming this corporation or any certificate  filed pursuant to
law.






ss.4(a).   Indemnification  of  Directors  and  Officers.  To  the  full  extent
           ---------------------------------------------
authorized or permitted by law, the corporation shall indemnify any person made,
or threatened to be made, a defendant to an action or proceeding,  whether civil
or  criminal,  including  an action by or in the  right of the  corporation,  by
reason of the fact that he, his testator or  intestate,  is or was a director or
officer of the corporation, or is serving or served as an officer or director of
any other  corporation,  joint venture,  trust,  employee  benefit plan or other
enterprise,  in which the corporation has a financial interest as an investor or
creditor,  and such person is serving or served at the express request of and on
behalf  of  this  corporation.   Without  limitation  of  the  foregoing,   such
indemnification  shall include  indemnification  against all  judgments,  fines,
amounts paid in settlement and reasonable  expenses,  including  attorneys' fees
and costs of investigation or defense, reasonably incurred by any such person in
connection with any such action or proceeding or any appeal  therein,  and which
expenses have not been recouped by him in any other manner, unless a judgment or
other final adjudication adverse to the director or officer establishes that his
acts were  committed in bad faith,  or were the result of active and  deliberate
dishonesty and were material to the cause of action so  adjudicated,  or that he
personally  gained in fact a financial profit or other advantage to which he was
not legally entitled;  provided that no such  indemnification  shall be required
with  respect  to any  settlement  or other  nonadjudicated  disposition  of any
threatened or pending action or proceeding  unless the corporation has given its
prior consent to such settlement or other disposition.  If any unexhausted right
of recoupment shall exist, payment of this indemnification  shall be conditioned
upon its release or assignment to the corporation.

ss.4(b).  Indemnification Procedure; Expenses. A person who has been successful,
          -----------------------------------
on the merits or  otherwise,  in the  defense of a civil or  criminal  action or
proceeding of the character described in Section 4(a) of this Article VIII shall
be entitled to  indemnification  as provided therein.  Except as provided in the
preceding  sentence  and unless  ordered by a court,  indemnification  hereunder
shall be made by the  corporation  if, and only if,  authorized  in the specific
case:  (i) by the  board of  directors  of the  corporation  acting  by a quorum
consisting of directors who are not parties to such action or proceeding  upon a
finding  that the  director or officer has met the standard of conduct set forth
in Section 4(a) of this Article VIII, or (ii) if such a quorum is not obtainable
or, even if obtainable,  a quorum of disinterested  directors so directs: (a) by
the board of  directors  of the  corporation  upon the  opinion  in  writing  of
independent  legal counsel that  indemnification  is proper in the circumstances
because the  standard of conduct set forth in Section  4(a) of this Article VIII
has been met by such  director or  officer,  or (b) by the  shareholders  upon a
finding that the director or officer has met the applicable  standard of conduct
set  forth  in  such  Section.  Upon  the  request  of any  person  entitled  to
indemnification  pursuant to Section 4 of this  Article  VIII,  the  corporation
shall pay  promptly  to such  person all  expenses  reasonably  incurred by such
person in  connection  with an action or  proceeding  with respect to which such
person  is, in the  absence  of a final  adjudication  adverse  to such  person,
entitled to  indemnification  hereunder;  provided  that such  payment  shall be
subject to the receipt by the corporation of that person's  undertaking to repay
the portion of such expenses to which it is finally  determined that such person
is not  entitled;  and provided  further that no such payment shall be made if a
majority of disinterested  directors of the corporation,  provided such majority
constitutes a quorum of the Board, or if there is not a quorum of  disinterested
directors,  independent  legal  counsel not a party to such action or proceeding
and not regular counsel to the corporation,  determines in good faith that it is
likely that such person will be found not to be entitled to such indemnification
and will not in that event fulfill his  undertaking  to repay such  advances.  A
person  entitled  to  indemnification  shall  cooperate  in good  faith with any
request by the  corporation  that  common  counsel be  utilized by parties to an
action  or  proceeding  who are  similarly  situated  unless  to do so  would be
inappropriate  due to actual or potential  differing  interests between or among
such parties.

ss.4(c).  Contractual Article. Section 4 of this Article VIII shall be deemed to
          -------------------
constitute  a  contract  between  the  corporation  and  a  person  entitled  to
indemnification  and may not, without the consent of such person,  be amended to
effect  adversely  such  person  with  respect  to any  event,  act or  omission
occurring  or allegedly  occurring  prior to the end of the term of office he is
serving when such amendment is adopted.  The  corporation is authorized to enter
into  agreements  with any of its  directors  or  officers  extending  rights to
indemnification and advancement of expenses to such person to the fullest extent
permitted by  applicable  law, but the failure to enter into any such  agreement
shall not affect or limit the  rights of such  person  pursuant  to Section 4 of
this Article VIII, it being expressly recognized that all directors and officers
of the corporation,  by serving as such after the adoption hereof, are acting in
reliance hereon and the corporation is estopped to contend otherwise.

ss.4(d). Insurance. The corporation may, but need not, maintain insurance at its
         ---------
expense  insuring persons  entitled to  indemnification  under Section 4 of this
Article  VIII  against   liabilities   whether  or  not  such   liabilities  are
indemnifiable pursuant to Section 4 of this Article VIII.






ss.4(e).  Non-exclusivity.  The  indemnification  provided  by Section 4 of this
          ---------------
Article  VIII  shall not be  deemed  exclusive  of any  other  rights to which a
director or officer of the corporation may be entitled.

ss.4(f).  Amendment to Conform to Business Corporation Law. If and to the extent
          ------------------------------------------------
that any  provision  of  Section 4 of this  Article  VIII is  inconsistent  with
Article  7 of the  Business  Corporation  Law of the  State  of New  York,  such
provision  shall be deemed to have been amended to the extent  necessary to make
it consistent with such Article 7.

ss.5.  Signatures to Contracts.  Except as otherwise  prescribed by the Board of
       -----------------------
Directors, the Chairman of the Board of Directors, the Chairman of the Executive
Committee,  the Vice Chairmen, the President, any Group President, any Executive
Vice President, any Senior Vice President or any other Vice President shall sign
and  execute  all  contracts,  instruments  and  documents  in the  name  of the
corporation.

                                   ARTICLE IX.

                                   Amendments

ss.1. Amendments.
      ----------

(a)  The  affirmative  vote of the  holders  of  record  of  outstanding  shares
representing  at  least  eighty  percent  (80%) of the  voting  power of all the
outstanding  shares  of  capital  stock  of the  corporation  entitled  to  vote
generally  in the  election of  directors  shall be required to amend,  alter or
repeal, or adopt any provision or provisions inconsistent with, any provision of
Sections  1(a) and (b), 4, 5, 6 and 7 of Article  III of these  By-Laws and this
Section 1(a); provided,  however, that this Section 1(a) shall not apply to, and
such  eighty  percent  (80%)  vote shall not be  required  for,  any  amendment,
alteration,  repeal,  or adoption of any  inconsistent  provision or provisions,
declared  advisable  by the  Board  of  Directors  by the  affirmative  vote  of
two-thirds of the whole Board of Directors.

(b) Subject to the  provisions of Section 1(a) of this Article IX, these By-Laws
may be altered or repealed, in any particular, and new By-Laws, not inconsistent
with any provision of the Preliminary  Certificate of Consolidation forming this
corporation  or any  certificate  filed pursuant to law or any provision of law,
may be  adopted,  either by the  affirmative  vote of the holders of record of a
majority in number of the outstanding shares of stock entitled to vote, given at
an annual  meeting,  or at any special meeting the notice of which shall include
the form of the proposed amendment or repeal or of the proposed new By-Laws,  or
a summary  thereof,  or by vote of a majority of the whole  Board of  Directors,
given at any meeting thereof,  the notice of which shall include the form of the
proposed  amendment  or  repeal or of the  proposed  new  By-Laws,  or a summary
thereof.

ss.2.  Repeal of Old  By-Laws.  All prior  By-Laws  of the  Company  are  hereby
       ----------------------
repealed.

                    - - - - - - - - - - - - - - - - - - - - -







                                                                Exhibit 3 (ii) 2


                       AMENDMENT TO ARTICLE III, SECTION 9
                       -----------------------------------
                       OF BY-LAWS OF CORNING INCORPORATED
                       ----------------------------------
                        EFFECTIVE AS OF FEBRUARY 5, 2003
                        --------------------------------


At the  February  5, 2003  meeting of the Corning  Incorporated  ("Corporation")
Board of Directors,  it was proposed that Article III,  Section 9 of the By-Laws
of the  Corporation be amended to provide that the Audit Committee shall appoint
annually a firm of certified public  accountants to audit the books and accounts
of the Corporation and its subsidiary  companies and to report to the Committee.
The previous By-Laws section had provided for the Audit Committee to recommend a
firm of  certified  public  accountants  to be  appointed  by the full  Board of
Directors.

Upon motion duly made and seconded, the following resolution was approved:

     RESOLVED,  that the By-Laws of the Corporation be, and the same hereby are,
     amended in the following respects:

     A.   ARTICLE III - DIRECTORS

          To amend Article III ss.9 by deleting the words "recommend" and "to be
          appointed by the Board of Directors"  and inserting the word "appoint"
          in place of the deleted word  "recommend,"  so "appoint"  shall appear
          after the words "The Committee shall" in such sentence.

          The second sentence of ss.9 shall then read as follows:

          "The Committee  shall appoint,  annually,  a firm of certified  public
          accountants to audit the books and accounts of the Corporation and its
          subsidiary companies and to report to the Committee."





                                                                Exhibit 3 (ii) 3



                       AMENDMENT OF ARTICLE III, SECTION 8
                       -----------------------------------
                       OF BY-LAWS OF CORNING INCORPORATED
                       ----------------------------------
                         EFFECTIVE AS OF APRIL 27, 2006
                         ------------------------------


At the April 27, 2006 meeting of the Corning  Incorporated  ("Corning") Board of
Directors,  it was proposed  that  Article III,  Section 8 of the By-Laws of the
Corporation be amended to provide that the Chairman of the Board of Directors is
not  required  to be a  member  of  the  Executive  Committee  of the  Board  of
Directors.

Upon motion duly made and seconded, the following resolution was approved:

     RESOLVED,  that the  By-Laws of the  Corporation  hereby are amended in the
     following respects:

     A.   ARTICLE III - DIRECTORS

          To amend  Article III ss.8 by deleting the words "the  Chairman of the
          Board of Directors ex officio" and "one other Director", and inserting
          the words "two other  Directors"  in place of the  deleted  words "one
          other Director."

          The first sentence of ss.8 shall then read as follows:

          "The  Board of  Directors  may,  by  resolution  adopted  by vote of a
          majority  of the whole  Board,  appoint  an  Executive  Committee,  to
          consist of the chief executive officer of the corporation and at least
          two  other  Directors,  which  shall  be  empowered  to  perform  such
          functions as may be delegated to it by the Board."

After amendment, Article III, Section 8 of the By-Laws states:

     "Article III, ss. 8.  Executive  Committee.  The Board of Directors may, by
                           --------------------
resolution  adopted  by  vote of a  majority  of the  whole  Board,  appoint  an
Executive  Committee,   to  consist  of  the  chief  executive  officer  of  the
corporation  and at least two  other  Directors,  which  shall be  empowered  to
perform such  functions as may be delegated to it by the Board.  The Chairman of
the Board of Directors shall act as chairman of the Executive  Committee  unless
another member shall have been appointed chairman by the Board of Directors."











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

                                                              Three months ended
                                                                March 31, 2006
                                                              ------------------

Income before income taxes                                        $     56
Adjustments:
    Distributed income of equity investees                             137
    Fixed charges net of capitalized interest                           31
                                                                  --------

Income before taxes and fixed charges, as adjusted                $    224
                                                                  ========

Fixed charges:
   Interest expense (a)                                           $     27
   Portion of rent expense which represents an
     appropriate interest factor (b)                                     4
   Capitalized interest                                                  9
                                                                  --------

Total fixed charges                                                     40
Capitalized interest                                                    (9)
                                                                  --------

Total fixed charges, net of capitalized interest                  $     31
                                                                  ========

Ratio of earnings to fixed charges                                    5.6x
                                                                  ========

(a)  Interest expense includes amortization expense for capitalized interest and
     debt costs.
(b)  One-third of net rent expense is the portion deemed  representative  of the
     interest factor.





                                                                    Exhibit 31.1

                      CHIEF EXECUTIVE OFFICER CERTIFICATION

I,  Wendell  P.  Weeks,   President  and  Chief  Executive  Officer  of  Corning
Incorporated, certify that:

1.   I have reviewed this Quarterly Report on Form 10-Q of Corning  Incorporated
     (the registrant);

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 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))  and internal  control over
     financial  reporting  (as  defined  in  Exchange  Act Rules  13a-15(f)  and
     15d-15(f)) for the registrant and 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)   designed such internal  control over  financial  reporting,  or caused
          such internal  control over  financial  reporting to be designed under
          our  supervision,   to  provide  reasonable  assurance  regarding  the
          reliability  of financial  reporting and the  preparation of financial
          statements for external purposes in accordance with generally accepted
          accounting principles;

     c)   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

     d)   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; and

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 the 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.

May 10, 2006

/s/           Wendell P. Weeks
     -------------------------------------
     Wendell P. Weeks
     President and Chief Executive Officer
     (Principal Executive Officer)





                                                                    Exhibit 31.2

                      CHIEF FINANCIAL OFFICER CERTIFICATION

I, James B. Flaws, Vice Chairman and Chief Financial Officer, certify that:

1.   I have reviewed this Quarterly Report on Form 10-Q of Corning  Incorporated
     (the registrant);

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 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))  and internal  control over
     financial  reporting  (as  defined  in  Exchange  Act Rules  13a-15(f)  and
     15d-15(f)) for the registrant and 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)   designed such internal  control over  financial  reporting,  or caused
          such internal  control over  financial  reporting to be designed under
          our  supervision,   to  provide  reasonable  assurance  regarding  the
          reliability  of financial  reporting and the  preparation of financial
          statements for external purposes in accordance with generally accepted
          accounting principles;

     c)   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

     d)   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; and

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 the 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.

May 10, 2006

/s/               James B. Flaws
     -----------------------------------------
     James B. Flaws
     Vice Chairman and Chief Financial Officer
     (Principal Financial Officer)






                                                                      Exhibit 32



CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION
906 OF THE SARBANES-OXLEY ACT OF 2002



In connection with the Quarterly Report of Corning Incorporated (the Company) on
Form 10-Q for the period ended March 31, 2006 as filed with the  Securities  and
Exchange  Commission  on the date hereof  (the  Report),  we,  Wendell P. Weeks,
President and Chief  Executive  Officer,  and James B. Flaws,  Vice Chairman and
Chief Financial Officer, of the Company, certify, pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that:

(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.


Dated:  May 10, 2006


/s/  Wendell P. Weeks
     -----------------------------------------
     Wendell P. Weeks
     President and Chief Executive Officer


/s/  James B. Flaws
     -----------------------------------------
     James B. Flaws
     Vice Chairman and Chief Financial Officer