.
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For fiscal year ended December 31, 2004
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________ to _____________
Commission File number 1-3247
A. Full title of the plan and the address of the plan, if different
from that of the issuer named below:
THE CORNING INCORPORATED
INVESTMENT PLAN
B. Name of issuer of the securities held pursuant to the plan and
the address of its principal executive office:
CORNING INCORPORATED
ONE RIVERFRONT PLAZA
CORNING, NY 14831
Explanatory Note:
Effective February 2, 2004, the net assets of the Corning Cable Systems
Retirement Plan ("CCSRP") and the Corning Cable Systems Investment Plan
("CCSIP") merged into the Corning Incorporated Investment Plan. The CCSRP and
the CCSIP were sponsored by Corning Incorporated.
Documents filed as part of this report:
(a) Index to financial statements filed as part of this report:
The Statement of Net Assets Available for Benefits as at December
31, 2004 and 2003, the Statement of Changes in Net Assets
Available for Benefits for the year ended December 31, 2004 and
supplementary information, together with the report thereon of
each of the Independent Registered Public Accounting Firms dated
June 28, 2005. The required financial statement schedules, if
any, are included in the supplementary information referred to
above and should be read in conjunction with the above financial
statements.
(b) Exhibits:
Exhibit 23.1 - The consent of Insero, Kasperski, Ciaccia & Co., P.C.
Exhibit 23.2 - The consent of PricewaterhouseCoopers LLP
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Benefits Committee has duly caused this annual report to be signed by the
undersigned thereunto duly authorized.
THE CORNING INCORPORATED
INVESTMENT PLAN
By: /s/ Deborah G. Lauper
---------------------
Deborah G. Lauper
Chair
Benefits Committee
Date: June 29, 2005
Corning Incorporated
Investment Plan
Financial Statements and Supplemental Schedule
December 31, 2004 and 2003
Corning Incorporated Investment Plan
Index
December 31, 2004 and 2003
--------------------------------------------------------------------------------
Page(s)
Report of Independent Registered Public Accounting Firms..................6-7
Financial Statements
Statements of Net Assets Available for Benefits.............................8
Statement of Changes in Net Assets Available for Benefits...................9
Notes to Financial Statements...........................................10-15
Supplemental Schedule*
Schedule of Assets (Held at End of Year)...................................16
* Other schedules required by Section 2520.103-10 of the Department of
Labor's Rules and Regulations for Reporting and Disclosures under the
Employee Retirement Income Security Act of 1974 ("ERISA") have been omitted
because they are not applicable.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
-------------------------------------------------------
To the Corning Incorporated Benefits Plan Committee and
the Participants of the Corning Incorporated Investment Plan
We have audited the accompanying statement of net assets available for benefits
of Corning Incorporated Investment Plan (the Plan) as of December 31, 2004, and
the related statement of changes in net assets available for benefits for the
year then ended. These financial statements are the responsibility of the Plan's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with the auditing standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of Corning
Incorporated Investment Plan as of December 31, 2004, and the changes in net
assets available for benefits for the year then ended, in conformity with U.S.
generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplemental schedule of assets (held at end of
year) as of December 31, 2004, is presented for the purpose of additional
analysis and is not a required part of the basic financial statements, but is
supplementary information required by the United States Department of Labor
Rules and Regulations for Reporting and Disclosure under the Employee Retirement
Income Security Act of 1974. This supplemental schedule is the responsibility of
the Plan's management. The supplemental schedule has been subjected to the
auditing procedures applied in the audit of the basic financial statements and,
in our opinion, is fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
Respectfully Submitted,
Insero, Kasperski, Ciaccia & Co., P.C.
Certified Public Accountants
Rochester, New York
May 20, 2005
Report of Independent Registered Public Accounting Firm
To the Corning Incorporated Benefits Committee and the
Participants in the Corning Incorporated Investment Plan
In our opinion, the accompanying statement of net assets available for benefits
("statement of net assets") presents fairly, in all material respects, the net
assets available for benefits of the Corning Incorporated Investment Plan (the
"Plan") at December 31, 2003 in conformity with accounting principles generally
accepted in the United States of America. This financial statement is the
responsibility of the Plan's management; our responsibility is to express an
opinion on this financial statement based on our audit. We conducted our audit
of this statement in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the statement
of net assets is free of material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the statement
of net assets, assessing the accounting principles used and significant
estimates made by management, and evaluating the overall statement of net assets
presentation. We believe that our audit of the statement of net assets provides
a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
New York, New York
June 22, 2004
Corning Incorporated Investment Plan
Statements of Net Assets Available for Benefits
December 31, 2004 and 2003
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(in thousands of dollars)
2004 2003
Assets
Interest in Corning Incorporated
Master Investment Trust $ 1,324,124 $ 1,029,892
Loans to participants 6,805 6,136
Participant - Contributions Receivable 356 -
Employer - Contributions Receivable 170 -
------------- -------------
Net assets available for benefits $ 1,331,455 $ 1,036,028
============= =============
The accompanying notes are an integral part of these financial statements.
Corning Incorporated Investment Plan
Statements of Changes in Net Assets Available for Benefits
Year Ended December 31, 2004
--------------------------------------------------------------------------------
(in thousands of dollars)
Additions to net assets attributed to:
Investment income
Interest in the Corning Incorporated Master
Investment Trust, investment income $ 116,133
Interest from participant loans 481
-------------
116,614
-------------
Contributions
Employer, net of forfeitures 17,635
Participant 42,522
Transfer from the Corning Cable System Plans 222,439
-------------
282,596
-------------
Total additions 399,210
-------------
Deductions from net assets attributed to:
Benefits paid directly to participants 103,085
Administrative expenses 698
-------------
Total deductions 103,783
-------------
Net increase 295,427
Net assets available for plan benefits
Beginning of year 1,036,028
-------------
End of year $ 1,331,455
=============
The accompanying notes are an integral part of these financial statements.
Corning Incorporated Investment Plan
Notes to Financial Statements
December 31, 2004 and 2003
--------------------------------------------------------------------------------
(in thousands of dollars)
1. Description of Plan
General
The following brief description of the Corning Incorporated Investment Plan
(the "Plan") is provided for general information purposes only.
Participants should refer to the Plan document and summary plan description
for a more complete description of the Plan's provisions.
The Plan is a defined contribution profit-sharing plan established in
January 1967 and is subject to the provisions of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA").
Effective February 2, 2004, the net assets of the Corning Cable Systems
Retirement Plan ("CCSRP") and the Corning Cable Systems Investment Plan
("CCSIP") merged into the Plan. Both CCSRP and CCSIP were sponsored by
Corning Incorporated (the "Company").
Administration
The Plan is administered by the Corning Incorporated Benefits Committee
(the "Committee"), which is appointed by the Board of Directors of the
Company. The Committee administers the Plan in accordance with its terms
and applicable laws and has all necessary and appropriate powers to carry
out the provisions of the Plan.
Trustee and Recordkeeper
The Plan's assets are held by JPMorgan Chase Bank (the "Trustee"), as
trustee. The recordkeeper is Affiliated Computer Services, Inc. (formerly
known as Mellon Human Resource and Investor Solutions).
Eligibility
The Plan covers all employees of the Company and participating subsidiaries
who are not members of a union. An employee is eligible for participation
in the Plan upon reaching the age of 18 and completing one year of eligible
service. Notwithstanding the foregoing, an employee who has attained age 18
and is scheduled on a normal basis to work at least 16 hours a week shall
be immediately eligible.
Participant Accounts
Each participant's account is credited with the participant's contribution
and allocations of (a) the Company's contribution and (b) Plan earnings,
and charged for administrative expenses. Trustee and investment management
fees are deducted from the earnings credited to participant's accounts. A
flat monthly fee is charged to each participant's account to subsidize
administrative expenses of the Plan and is determined by the plan
administrator. Administrative fees, such as investment management fees, are
pro-rated among the investment funds as of the last business day of each
month. The benefit to which a participant is entitled is the benefit that
can be provided from the participant's vested balance.
Corning Incorporated Investment Plan
Notes to Financial Statements
December 31, 2004 and 2003
--------------------------------------------------------------------------------
(in thousands of dollars)
Vesting
Participants are vested immediately in their contributions plus actual
earnings thereon. Company contributions to the Plan are fully vested after
three years of service. All Company contributions become fully vested upon
total and permanent disability, early retirement or normal retirement.
Contributions - Employer
Depending upon date of hire or employee election, Company matching
contributions will be determined under the following provisions:
1) Employees hired on or after July 1, 2000 (and employees hired
before July 1, 2000 who so elected) receive matching
contributions that equal 100% of the first 2% of eligible pay
contributed and 50% of the next 4% of eligible pay contributed,
up to 6% of eligible pay.
2) Certain employees hired before July 1, 2000 receive Company
matching contributions as a percentage of a participant's first
5% of eligible pay contributed according to years of service as
of December 31 of the prior year as follows:
Less than 19 years of service 50%
19 but less than 24 years of service 75%
24 or more years of service 100%
3) In 2003, the Company reduced its contributions to the Plan by
2.5% of eligible pay. This applied to all participants except
union-free hourly participants. If a participant was entitled to
receive both matching and the supplemental contribution, the 2.5%
reduction was made proportionally between the two contributions.
Effective January 1, 2004, the plan provision adopted in 2003
prescribing a 2.5% of pay reduction in Company contributions was
eliminated.
With respect to all employees eligible to participate in the Plan and
covered by the service-based match described above, beginning in January of
the year the participant is expected to reach ten years of vesting service
and irrespective of whether such employee has elected to contribute to the
Plan, the Company contributes weekly, bi-weekly or monthly (based on the
employee's pay frequency) a supplemental contribution to the Corning Common
Stock Fund equal to 1.175% of such employee's compensation. Employees hired
on or after July 1, 2000 do not receive the supplemental contribution.
All Company contributions are invested in the Corning Common Stock Fund.
Effective January 1, 2003, participants may transfer Company contributions
and associated earnings into any other plan fund.
Corning Incorporated Investment Plan
Notes to Financial Statements
December 31, 2004 and 2003
--------------------------------------------------------------------------------
(in thousands of dollars)
Forfeiture credits of $603 were used to reduce employer contributions in
2004. As of December 31, 2004, the amount of forfeitures available to
reduce future employer contributions to this plan and the other plan
sponsored by the Company with a specific interest in the Corning
Incorporated Master Investment Trust is $1,477.
Contributions - Participants
Generally, participants may contribute up to 75% of their eligible salary
on a before-tax basis, after-tax basis or any combination of the two, to
the Plan. Prior to October 1, 2003, contributions of highly compensated
participants were limited to 1% to 11% of their base salary before tax, and
1% to 4% of their base salary after tax, not to exceed 15% in total. These
limits were eliminated July 1, 2004. Effective January 1, 2004, the Plan
was amended to limit employees' elections to invest future contributions
into the Corning Common Stock Fund. The maximum investment direction
election under this new restriction is 20%.
The maximum amount a participant can contribute to the Plan on a before-tax
basis is $13 per year in 2004 as adjusted by the Internal Revenue Code
("IRC"). The Plan was amended effective July 1, 2004 to permit employees
who will have attained age 50 or older during a given year to contribute
additional before-tax amounts up to the prescribed IRC limitation for
"catch-up contributions."
Participants may also elect to have their contributions invested in the
Corning Common Stock Fund on a before or after-tax basis.
Fund Transfers
Participants are allowed to transfer their accumulated contributions
between funds. Effective January 1, 2004, the Plan was amended to prohibit
the transfer of amounts invested in other Plan investment funds to the
Corning Common Stock Fund.
Payment of Benefits
Benefit payments are made upon retirement (i.e., at least age 55 with five
years of service), or in the event of a participant's death, total and
permanent disability or other termination of employment. A retired
participant can elect to receive distributions in a lump sum, installments,
or intermittent withdrawals. The Plan also provides for withdrawals by
participants prior to termination.
Participant Loans
Participants are eligible to obtain loans from the Plan. Loans are limited
to one loan per participant with a repayment term not to exceed 4.5 years,
except for primary residence loans in which the term may not exceed ten
years. The maximum amount of any loan is the lesser of one-half of the
vested account balance or $50 (with a $1 minimum). The interest rate on a
loan is established by the Committee. Also, participants are charged a loan
fee which reduces the loan proceeds.
Corning Incorporated Investment Plan
Notes to Financial Statements
December 31, 2004 and 2003
--------------------------------------------------------------------------------
(in thousands of dollars)
2. Summary of Significant Accounting Policies
Basis of Presentation
The accompanying financial statements are prepared on the accrual basis of
accounting.
Use of Estimates
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported
amounts of net assets available for benefits and changes therein. Due to
the inherent uncertainty involved in making estimates, actual results
reported in future periods could differ from those estimates.
Basis of Allocation from the Corning Incorporated Master Investment Trust
The Plan has a specific interest in the Corning Incorporated Master
Investment Trust (the "Master Trust") in which another plan sponsored by
the Company also participates. The Plan's specific interest in the Master
Trust is credited or charged for contributions, transfers, and benefit
payments relating to its participants. Realized gains and losses and
changes in net unrealized appreciation or depreciation on investments,
income from investments and expenses are allocated to the Plan based on the
Plan's specific interest in the net assets of the Master Trust. At
December 31, 2004 and 2003, the Plan's percentage interest in the net
assets of the Master Trust was approximately 84% and 81%, respectively.
Valuation of Master Trust Investments
Master Trust investments in mutual and collective trust funds are recorded
at fair value based upon the net asset value announced by the fund on the
last business day of the year. Investment contracts are valued at contract
value, representing contributions made plus interest at the contract rate,
less funds withdrawn and administrative expenses. There are no reserves
against contract values for credit risk of the contract issuers or
otherwise. Investment contracts are fully benefit-responsive. The Company
does not expect any employer initiated events that may cause premature
liquidation of a contract at market value. At December 31, 2004 and 2003,
investment contracts held by the Master Trust were $407,345 and $421,447,
respectively, at contract value. The contract values approximate fair
value. The average yield and crediting interest rates were approximately 6%
for 2004 and 2003. The crediting interest rates are based on a formula
agreed upon with the issuers.
Interest is accrued by the Master Trust as earned, and dividends are
recorded on the ex-dividend date.
Purchases and sales of securities are recorded by the Master Trust on a
trade-date basis. Realized gains and losses for security transactions are
reported using the average cost method. Unrealized gains and losses
represent the difference between the cost and fair value of securities.
Valuation of Participant Loans
Participant loans are valued at cost plus accrued interest which
approximates fair value.
Corning Incorporated Investment Plan
Notes to Financial Statements
December 31, 2004 and 2003
--------------------------------------------------------------------------------
(in thousands of dollars)
Payment of Benefits
Benefits are recorded when paid.
Risks and Uncertainties
The Plan's investment securities are exposed to various risks, such as
changes in interest rates and market returns. Due to the level of risk
associated with certain investments and the level of uncertainty related to
changes in the value of these investments, it is at least reasonably
possible that changes in valuations in the near term would materially
affect participants' account balances and the amounts reported in the
Plan's financial statements.
3. Investments
The following presents the Master Trust's investments at December 31:
2004 2003
Fixed Income Funds $ 422,902 $ 401,922
Mutual Funds 601,636 410,421
Short-Term Investment Funds 56,120 25,828
Corning Common Stock 497,250 429,456
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$ 1,577,908 $ 1,267,627
============= =============
Investments that represent 5% or more of net assets available for benefits
as of December 31, 2004 and 2003 were the Plan's interest in the Master
Trust.
During 2004, the Master Trust's investments (including gains and losses on
investments bought and sold, as well as held during the year) appreciated
in value by $103,256, as follows:
Mutual Funds $ 66,192
Corning Common Stock 37,064
-------------
$ 103,256
=============
During 2004, the Master Trust's investments earned interest and dividends
in the amount of $35,135. For 2004, investment expenses totaled $832.
Corning Incorporated Investment Plan
Notes to Financial Statements
December 31, 2004 and 2003
--------------------------------------------------------------------------------
(in thousands of dollars)
4. Plan Termination
Although it has not expressed any intent to do so, the Company has the
right to terminate the Plan subject to the provisions of ERISA. In the
event of Plan termination, all amounts credited to participants' accounts
will become 100% vested and will be distributed to participants in
accordance with Plan provisions.
5. Tax Status
The Plan received a favorable determination letter dated November 5, 2003
from the Internal Revenue Service indicating that it meets the requirements
of Section 401(a) and 501(a) of the IRC and has qualified status as an
employee retirement plan. The Plan has been amended since receiving the
determination letter. However, the plan administrator and the Plan's
benefits counsel believe that the Plan is designed and is currently being
operated in compliance with the applicable provisions of the IRC.
6. Subsequent Events
Effective January 1, 2005, participants of the Corning Oak Holding, Inc.
Section 401(k) Savings Plan (the Oak Plan) became eligible to participate
in the Plan. On February 2, 2005, the assets of the Oak Plan were merged
into the Plan.
Effective April 1, 2005, the Fidelity Low Priced Stock Fund was eliminated
as an investment option for participants. In addition, the Fidelity Mid-cap
Stock Fund was replaced with the Vanguard Mid-cap Index Fund.
Effective March 28, 2005, the mandatory lump-sum distribution threshold was
lowered to $1 to comply with the restrictions set forth under The Economic
Growth and Tax Relief Reconciliation Act of 2001 ("EGTRRA").
Corning Incorporated Investment Plan
Schedule of Assets (Held at End of Year)
December 31, 2004
--------------------------------------------------------------------------------
(in thousands of dollars)
Identity of Issuer, Description of Investment Including
Borrower, Lessor or Maturity Date, Rate of Interest, Current
Similar Party Collateral, Par, or Maturity Value Value
Participant loans Maturity dates through 2014 and interest $ 6,805
rates ranging from 4.75% - 10.50%
Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
--------------------------------------------------------
We consent to the incorporation by reference in the Registration Statement of
Corning Incorporated on Form S-8 (No. 333-82926 and No. 333-26049) of our
report, dated May 20, 2005, relating to the financial statements of Corning
Incorporated Investment Plan, which appears in this Annual Report on Form 11-K.
Respectfully Submitted,
Insero, Kasperski, Ciaccia & Co., P.C.
Certified Public Accountants
Rochester, New York
June 24, 2005
Exhibit 23.2
Consent of Independent Registered Public Accounting Firm
We hereby consent to the incorporation by reference in the Registration
Statements on Form S-8 (Nos. 333-18329 and 333-26049) of Corning Incorporated of
our report dated June 22, 2004 relating to the statement of net assets available
for benefits of the Corning Incorporated Investment Plan, which appears in this
Form 11-K.
PricewaterhouseCoopers LLP
New York, New York
June 28, 2005