SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of report (Date of earliest event reported): December 5, 2002
CORNING INCORPORATED
(Exact name of registrant as specified in its charter)
New York 1-3247 16-0393470
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(State or other jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
One Riverfront Plaza, Corning, New York 14831
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (607) 974-9000
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N/A
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(Former name or former address, if changed since last report.)
Page 1 of 4 Pages
Exhibit Index on Page 4
Item 5. Other Events and Regulation FD Disclosure.
On December 5, 2002, Corning Incorporated announced that its fourth quarter 2002
results will include additional pretax non-cash charges in the range of $800 to
$825 million, including approximately $400 million to impair goodwill in the
company's telecommunications segment and $400 to $425 million of impairment
charges related to the tangible and intangible assets in the company's
conventional television glass and photonic technologies businesses. The press
release relating to this announcement is filed herewith as Exhibit 99.1 and is
incorporated herein by reference.
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
99.1 Press Release dated December 5, 2002.
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: December 5, 2002
CORNING INCORPORATED
By: /s/ Katherine A. Asbeck
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Katherine A. Asbeck
Senior Vice President & Controller
INDEX TO EXHIBITS
(c) Exhibits
99.1 Press Release dated December 5, 2002
FOR RELEASE - DECEMBER 5, 2002
Corning Contacts:
Media Relations Investor Relations
Daniel F. Collins Kenneth C. Sofio
(607) 974-4197 (607) 974-7705
collinsdf@corning.com sofiokc@corning.com
Corning to Take Fourth Quarter Goodwill and Impairment
Charges of $800 to $825 Million
CORNING, N.Y. - Corning Incorporated (NYSE:GLW) today announced that its fourth
quarter results will include additional pretax non-cash charges in the range of
$800 to $825 million. The charges will include approximately $400 million to
impair goodwill in the company's telecommunications segment and $400 to $425
million of impairment charges related to the tangible and intangible assets in
Corning's conventional television glass and photonic technologies businesses.
The company determined its goodwill charge after completing its annual
assessment of goodwill as required under Statement of Financial Accounting
Standards No. 142, (SFAS142) of the Financial Accounting Standards Board. At the
end of the third quarter, Corning had $2.1 billion in goodwill, with
approximately $1.9 billion related to the telecommunications segment.
"The goodwill charge is consistent with what we told investors they might expect
during our third-quarter conference call," James B. Flaws, vice chairman and
chief financial officer said. "The accounting for SFAS142 is complex, but at its
core is Corning's long-term view of the telecommunications marketplace and the
resulting estimated cash flow and fair market values of its telecommunications
segment. Our outlook does not anticipate any significant growth in the
telecommunications segment until late 2004. However, we expect longer term
improvement as bandwidth demand continues to grow absorbing existing network
capacity. This recovery could be enhanced by public policy changes,
consolidation of the industry and the introduction of new broadband
applications."
(more)
Corning to Take Fourth Quarter Goodwill and Impairment Charges of $800 to
$825 Million
Page Two
Corning said its other pretax impairment charges of $400 to $425 million are
related to the decline in expected future cash flows from its conventional
television glass and photonic technologies businesses. The charge related to the
conventional television glass business of approximately $150 million reflects
the impact of the decline in the conventional television tube industry in North
America. The charge related to photonic technologies of $250 to $275 million
reflects the very significant decline and the prolonged expected downturn in the
optical components marketplace.
Overview of 2002 charges
Corning has recorded restructuring and impairment pretax charges totaling $619
million through September 30, 2002. In October, Corning announced that it would
record a pretax restructuring and impairment charge in the range of $550 to $650
million in the fourth quarter. Today's announcement will bring the company's
total 2002 pretax restructuring and impairment charges to approximately $2
billion.
The company also expects to record an after-tax gain of approximately $400
million from the previously announced sale of its precision lens business to 3M
for $850 million. The transaction is scheduled to be completed by the end of the
year.
Flaws said, "This has been a very difficult year for Corning, our employees, our
communities and our shareholders. The long and deep depression in
telecommunications industry capital spending has challenged us. Yet we continue
to make progress against our goals. Our restructuring should help us achieve
profitability in 2003 and we are prepared to do more if necessary.
"Our financial health remains strong with significant cash and short-term
investment balances, the expected proceeds from the sale of the precision lens
business and continued access to our committed revolving credit line."
About Corning Incorporated
Established in 1851, Corning Incorporated (www.corning.com) creates leading-edge
technologies that offer growth opportunities in markets that fuel the world's
economy. Corning manufactures optical fiber, cable and photonic products for the
telecommunications industry; and high-performance display glass and components
for television, information technology and other communications-related
industries. The company also uses advanced materials to manufacture products for
scientific, semiconductor and environmental markets.
(more)
Corning to Take Fourth Quarter Goodwill and Impairment Charges of $800 to
$825 Million
Page Three
Forward-Looking and Cautionary Statements
This press release contains forward-looking statements that involve a variety of
business risks and other uncertainties that could cause actual results to differ
materially. These risks and uncertainties include the possibility of changes or
fluctuations in global economic conditions; currency exchange rates; product
demand and industry capacity; competitive products and pricing; availability and
costs of critical components and materials; new product development and
commercialization; order activity and demand from major customers; capital
spending by larger customers in the telecommunications industry and other
business segments; the mix of sales between premium and non-premium products;
possible disruption in commercial activities due to terrorist activity and armed
conflict; ability to obtain financing and capital on commercially reasonable
terms; acquisition and divestiture activities; the level of excess or obsolete
inventory; the ability to enforce patents; product and components performance
issues; and litigation. These and other risk factors are identified in Corning's
filings with the Securities and Exchange Commission. Forward-looking statements
speak only as of the day that they are made, and Corning undertakes no
obligation to update them in light of new information or future events.
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