PROSPECTUS
Corning Incorporated
5,000,000 Shares of Common Stock
($.50 par value)
This prospectus relates to the sale by and on behalf of Corning
Incorporated, from time to time, by the Corning Incorporated Retirement Master
Trust (the "Trust") created as a part of, and on behalf of, the Corning
Incorporated Pension Plan (the "Plan"), of 5,000,000 shares of our common stock,
par value $.50 per share. We have been authorized by our Board of Directors to
make voluntary contributions of up to 10,000,000 shares of our common stock to
the Trust. The shares of our common stock will be issued and contributed, from
time to time, by us to the Trust to fund certain of our obligations to the Plan.
Our common stock is listed on the New York Stock Exchange under the symbol
"GLW." On November 2, 2005, the closing price of our common stock, as reported
on the New York Stock Exchange, was $20.38 per share.
The shares, when issued, may be sold, from time to time, in brokerage
transactions on the New York Stock Exchange, in privately negotiated
transactions, or otherwise. These sales may be for negotiated prices or on the
open market at prevailing market prices. We will not receive any portion of the
proceeds of the sale of the common stock offered by this prospectus and we will
bear all expenses incident to registration of the common stock. The Trust will
be responsible for expenses incurred in selling the common stock, which expenses
may include, among other things, underwriting discounts, brokerage fees and
commissions.
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Investing in our common stock involves risks. See the section entitled "Risk
Factors" beginning on page 8 to read about the risks you should consider before
buying our common stock.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
accuracy or adequacy of this prospectus. Any representation to the contrary is a
criminal offense.
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The date of this Prospectus is November 3, 2005
Table of Contents
Page
Important Notice To Readers.................................................2
Forward-Looking Statements..................................................3
Prospectus Summary..........................................................5
Risk Factors................................................................8
Use Of Proceeds............................................................15
Price Range Of Common Stock................................................16
Description Of Corning Capital Stock.......................................17
Plan Of Distribution.......................................................19
Legal Matters..............................................................21
Experts ..................................................................21
Where You Can Find More Information........................................21
IMPORTANT NOTICE TO READERS
This prospectus is part of a registration statement that we filed with the
Securities and Exchange Commission, or SEC, using a "shelf" registration
process. Under this shelf registration process, the Trust may, from time to
time, offer shares of our common stock owned by it. Each time the Trust offers
common stock under this prospectus, it will provide a copy of this prospectus
and, if applicable, a copy of a prospectus supplement. You should read both this
prospectus and, if applicable, any prospectus supplement together with the
information incorporated by reference in this prospectus. See "Where You Can
Find More Information" for more information.
You should rely only on the information contained in this prospectus. We
have not authorized anyone to provide you with information different from that
contained in this prospectus. The Trust is offering to sell, and seeking offers
to buy shares of our common stock only in jurisdictions where offers and sales
are permitted. The information contained in this prospectus is accurate only as
of the date of this prospectus, regardless of the time of delivery of this
prospectus or of any sale of our common stock. In this prospectus, "Corning,"
"we," "us," and "our" refer to Corning Incorporated and its consolidated
subsidiaries, and the "Trust" refers to the Corning Incorporated Retirement
Master Trust.
Forward-Looking Statements
Statements included in this prospectus and in the documents we incorporate
by reference, which are not historical facts, are forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933 and Section 21E
of the Securities Exchange Act of 1934, and include, among other things,
estimates and assumptions related to economic, competitive and legislative
developments. Words such as "anticipates," "expects," "intends," "plans,"
"believes," "seeks," "estimates," variations of such words and similar
expressions are intended to identify such forward-looking statements. Similarly,
statements that describe our objectives, plans or goals are or may be
forward-looking statements. These forward-looking statements have been made
based upon management's expectations and beliefs concerning future developments
and their potential effect upon us. These forward-looking statements involve
known and unknown risks, uncertainties and other factors that may cause our
actual results, performance or achievements to be different from any future
results, performance and achievements expressed or implied by these statements.
In connection with forward-looking statements, which appear in these
disclosures, investors should carefully review the factors set forth in this
prospectus under "Risk Factors." 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;
- rate of substitution by end-users purchasing LCDs for notebook computers,
desktop monitors and televisions;
- 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 and
Samsung Corning Co., Ltd.;
- movements in foreign exchange rates, primarily the Japanese yen, Euro and
Korean won; and
- other risks detailed in Corning's Securities and Exchange Commission
filings.
PROSPECTUS SUMMARY
This summary highlights information contained elsewhere in this prospectus.
It is not complete and is qualified in its entirety by, and should be read in
conjunction with, the more detailed information (including "Risk Factors" and
financial information) appearing elsewhere in this prospectus, as well as in the
documents incorporated by reference in this prospectus.
Our Company
We trace our origins to a glass business established in 1851. The present
corporation was incorporated in the State of New York in December 1936, and our
name was changed from Corning Glass Works to Corning Incorporated on April 28,
1989.
We are a global, technology-based corporation that operates in four
reportable business segments:
o Display Technologies:
o Telecommunications;
o Environmental Technologies; and
o Life Sciences.
The Display Technologies segment manufactures glass substrates for active
matrix liquid crystal displays (LCD's) which are used primarily in notebook
computers, flat panel desktop monitors, and LCD televisions. The
Telecommunications segment produces optical fiber and cable, and hardware and
equipment products for the worldwide telecommunications industry. The
Environmental Technologies Segment includes ceramic technologies and solutions
for emissions and pollution control in mobile and stationary applications around
the world, including gasoline and diesel substrate and filter products. The Life
Sciences Segment manufactures laboratory products including microplate products,
coated slides, filter plates for genomics sample preparation, plastic cell
culture dishes, flasks, cryogenic vials, roller bottles, mass cell culture
products, liquid handling instruments, Pyrex(R) glass beakers, pipettors,
serological pipettes, centrifuge tubes and laboratory filtration products.
Our principal office is located at One Riverfront Plaza, Corning, New York
14831. Our telephone number is (607) 974-9000. We maintain a Web site at
www.corning.com. Our Web site, and the information contained therein, is not a
part of this prospectus.
The Trust
The Trust is a part of, and was created to hold certain assets of the
Corning Incorporated Pension Plan, which we refer to as the Plan, in segregated
accounts. This prospectus covers the sale by and on behalf of Corning
Incorporated, from time to time, by the Trust of 5,000,000 shares of our common
stock. The Plan and the Trust are intended to be tax-qualified within the
meaning of Sections 401(a) and 501(a) of the Internal Revenue Code of 1986, as
amended. The Trust is funded by individual participant and Corning
contributions, which are held for the sole benefit of plan participants and
beneficiaries and which pay for proper expenses of plan administration.
JP Morgan Chase Bank, N.A., the Trustee, serves as trustee of the
segregated accounts in the Trust in accordance with a Trust Agreement dated as
of September 6, 1978 and a Master Trust Agreement dated as of January 1, 1986,
each as amended.
We have been authorized by our Board of Directors to make voluntary
contributions of up to
10,000,000 shares of our common stock to the Trust on or before December 31,
2005. We will make contributions to the Trust from time to time in amounts that
are not greater than ten percent of the total assets held by the Trust pursuant
to the Employee Retirement Income Security Act of 1974, as amended ("ERISA").
Our Board of Directors has directed that the Trustee promptly sell the shares of
our common stock upon contribution. The Trustee is responsible for custody of
the shares, and will be responsible for the disposition of the shares of our
common stock.
As of the date of this prospectus, the Trust beneficially owned 549,000
shares of our common stock. We cannot estimate the number of shares of our
common stock that the Trust will hold in the future.
The Trustee will receive customary compensation in its role as Trustee. It
is currently intended that JP Morgan Securities, Inc. will serve as broker in
effecting the sale of the shares of common stock for the Trust, for which JP
Morgan Securities, Inc. will receive customary compensation for serving as
broker. The Trustee serves, and may in the future serve, as trustee for debt
securities issued or to be issued under our Indentures. The Trustee has provided
commercial banking and other services for us and our related companies in the
past and may do so in the future.
The Offering
Issuer...................... Corning Incorporated
The Trust................... Corning Incorporated Retirement Master Trust
Shares of common stock...... 5,000,000 shares
Use of proceeds .......... We will not receive any proceeds from the
sale of shares of common stock by the Trust.
The Trust will receive all of the net
proceeds from the sale of shares of our
common stock offered by this prospectus.
See "Use of Proceeds."
Listing ................... Our shares of common stock are listed on the
New York Stock Exchange, under the symbol "GLW".
Risk factors .............. See "Risk Factors" on page 8 of this
prospectus for a discussion of factors you
should carefully consider before deciding to
invest in our common stock.
RISK FACTORS
Set forth below are some of the principal risks and uncertainties that
could cause our actual business results to differ materially from any
forward-looking statements or other projections contained in this prospectus. In
addition, future results could be materially affected by general industry and
market conditions, changes in laws or accounting rules, general U.S. and
non-U.S. economic and political conditions, including a global economic
slowdown, fluctuation of interest rates or currency exchange rates, terrorism,
political unrest or international conflicts, political instability or major
health concerns, natural disasters or other disruptions of expected economic and
business conditions. These risk factors should be considered in addition to our
cautionary comments concerning forward-looking statements in this prospectus,
including statements related to markets for our products and trends in our
business that involve a number of risks and uncertainties. Our separate
statement labeled Forward-Looking Statements should be considered in addition to
the statements below.
Our sales could be negatively impacted if one or more of our key customers
substantially reduce orders for our products
Our customer base is relatively concentrated with 10 or fewer significant
customers accounting for a high percentage (greater than 50%) of net sales in
most of our businesses. Corning's twelve largest customers account for about 50%
of our sales. However, no individual customer accounts for more than 10% of
consolidated sales.
Our Display Technologies, Telecommunications, Environmental Technologies,
and Life Sciences segments have concentrated customer bases. If we lose a
significant customer in any of these businesses, or if one or more significant
customers reduce orders, our sales could be negatively impacted. Corning's
Display Technologies segment manufactures and sells glass substrates to a
concentrated customer base comprised of LCD panel and color filter makers
primarily located in Japan and Taiwan. The most significant customers in these
markets are AU Optronics Corp., Chi Mei Optoelectronics Corp., Hannstar Display
Corp., Dai Nippon Printing Co., Ltd., Sharp Corporation, and Toppan CFI (Taiwan)
Co., Ltd. For the nine months ended September 30, 2005, these LCD customers
accounted for 73% of the Display Technologies segment sales. In addition,
Samsung Corning Precision's sales were also concentrated, with three LCD panel
makers in Korea (Samsung Electronics Co., Ltd., LG Philips LCD Co., and BOE
Hydis Technology Co., Ltd.) accounting for 88% of sales for the nine months
ended September 30, 2005.
Although the sale of LCD glass substrates has increased from quarter to
quarter in 2005, there can be no assurance that this positive trend will
continue. Our customers are LCD panel and color filter makers, and as they
switch to larger size glass, the pace of their orders may be uneven while they
adjust their manufacturing processes and facilities. Additionally, consumer
preferences for panels of differing sizes, or price or other factors, may lead
to pauses in market growth from time to time. There is further risk that our
customers may not be able to maintain profitable operations or access sufficient
capital to fund ongoing expansions, which may limit their pace of orders to us.
Our Telecommunications segment customers' purchases of our products are
affected by their
capital expansion plans, general market and economic uncertainty and regulatory
changes, including broadband policy. For the nine months ended September 30,
2005, one customer accounted for 15% of our Telecommunications segment sales,
and 10 customers accounted for 51% of total segment sales. Sales in the
Telecommunications segment continue to be impacted by Verizon's
fiber-to-the-premises project. Fiber-to-the-premises sales to Verizon are
dependent on Verizon's planned targets for homes passed and connected. Changes
in Verizon's deployment plan, or additional reductions in their inventory levels
of fiber-to-the-premises products, could adversely affect future sales.
In the Environmental Technologies segment, sales of our ceramic substrate
and filter products for automotive and diesel emissions and pollution control
fluctuate with production and sales of automobiles and other vehicles, as well
as changes in governmental laws and regulations for air quality and emission
controls. Sales in our Environmental Technologies segment are primarily to four
manufacturers of emission control systems who then sell to automotive and diesel
engine manufacturers. A portion of our automotive products are sold to U.S.
engine manufacturers, and as a result, our future sales could be adversely
impacted by slowdowns in automotive production by these manufacturers.
Sales in our Life Sciences segment in 2004 were primarily through two large
distributors to government entities, pharmaceutical and biotechnology companies,
hospitals, universities and other research facilities. One of Life Sciences
primary distributors changed its business strategy, and Corning notified this
distributor that it would not renew its existing distribution agreement, which
expired in April 2005. We are actively working to transition the sales through
this distributor to our remaining primary distributor and other existing and
developing channels. However, this change will likely adversely impact sales
volumes in the short term. For the full year, sales may be adversely impacted by
approximately 10% as a result of this change in our distribution channel. For
the nine months ended September 30, 2005, our remaining primary distributor
accounted for 50% of total segment sales.
If we do not successfully adjust our manufacturing volumes and fixed cost
structure, or achieve manufacturing yields or sufficient product reliability,
our operating results could suffer, and we may not achieve profitability levels
anticipated
We are investing heavily in additional manufacturing capacity of certain
businesses, including forecasted 2005 capital spending of $1.1 billion to $1.2
billion to expand our liquid crystal display glass facilities in response to
anticipated increases in customer demand and approximately $160 million in
anticipation of the emerging market for diesel emission control systems. The
speed of constructing the new facilities presents challenges. We may face
technical and process issues in moving to commercial production. There can be no
assurance that Corning will be able to pace its capacity expansion to the actual
demand. While the LCD industry has grown rapidly, it is possible that glass
manufacturing capacity may exceed customer demand during certain periods.
The manufacturing of our products involves highly complex and precise
processes, requiring production in highly controlled and clean environments.
Changes in our manufacturing processes or those of our suppliers could
significantly reduce our manufacturing yields and product reliability. In some
cases, existing manufacturing may be insufficient to achieve the volume or
requirements of our customers. We will need to develop new manufacturing
processes and techniques to achieve targeted volume, pricing and cost levels
that will permit profitable operations. While we continue to fund projects
to improve our manufacturing techniques and processes, we may not achieve
satisfactory cost levels in our manufacturing activities that will fully satisfy
our yield and margin targets.
Our future operating results depend on our ability to purchase a sufficient
amount of materials, parts and components to meet the demands of our customers.
Our ability to meet customer demand depends, in part, on our ability to
obtain timely and adequate delivery of materials, parts and components from our
suppliers and our internal manufacturing capacity. We may experience shortages
that could adversely affect our operations. Although we work closely with our
suppliers to avoid these types of shortages, there can be no assurances that we
will not encounter these problems in the future. Furthermore, certain of our
components are available only from a single source or limited sources. We may
not be able to find alternate sources in a timely manner. A reduction or
interruption in supplies, or a significant increase in the price of supplies
could have a material adverse effect on our businesses.
During the third quarter of 2005, certain suppliers suffered disruptions
from hurricanes in the southern United States. Although we have not encountered
any significant supply shortages, we cannot guarantee we will not in the future.
We have incurred, and may in the future incur, restructuring and other charges,
the amounts of which are difficult to predict accurately
We have recorded several charges for restructuring, impairment of assets,
and the write-off of cost and equity based investments. It is possible we may
record additional charges for restructuring or other asset impairments if
additional actions become necessary to align costs to a reduced level of demand,
or respond to increased competition, regulatory actions, or other factors
impacting our businesses.
If the markets for our products do not develop and expand as we anticipate,
demand for our products may decline, which would negatively impact our results
of operations and financial performance
The markets for our products are characterized by rapidly changing
technologies, evolving industry government standards and frequent new product
introductions. Our success is expected to depend, in substantial part, on the
timely and successful introduction of new products, upgrades of current products
to comply with emerging industry government standards, and our ability to
compete with new technologies and products of other suppliers. In addition, the
following factors related to our products and the markets for them, if not
achieved, could have an adverse impact on our results of operations:
o our ability to introduce leading products such as glass substrates for
liquid crystal displays, optical fiber and cable and hardware and
equipment, and environmental substrate products that can command
competitive prices in the marketplace;
o our ability to maintain or achieve a favorable sales mix of large
generation sizes of liquid
crystal display glass;
o our ability to anticipate technological and market trends;
o our ability to develop new products in response to favorable
government regulations and laws, particularly environmental substrate
diesel filter products in the Environmental Technologies segment;
o continued strong demand for notebook computers;
o the rate of substitution by end-users purchasing LCD monitors to
replace cathode ray tube monitors;
o the rate of growth in purchases of LCD televisions to replace other
technologies;
o the rate of growth of the fiber-to-the-premises build-out in North
America.
We face pricing pressures in each of our leading businesses that could adversely
affect our results of operations and financial performance
We periodically face pricing pressures in each of our leading businesses as
a result of intense competition, emerging new technologies, or over-capacity.
While we will work toward reducing our costs to respond to the pricing pressures
that may continue, we may not be able to achieve proportionate reductions in
costs. As a result of overcapacity and the current economic and industry
downturn in the Telecommunications segment, pricing pressures continued in 2005,
particularly in our optical fiber and cable products. We anticipate pricing
pressures will continue into 2006 and beyond. Increased pricing pressure may
develop in our Display Technologies segment as our customers strive to reduce
their costs and our competitors strive to expand production.
We have incurred, and may in the future incur, goodwill and other intangible
asset impairment charges
At September 30, 2005, Corning had goodwill of $277 million and other
intangible assets of $103 million. While we believe the estimates and judgments
about future cash flows used in the goodwill impairment tests are reasonable, we
cannot provide assurance that future impairment charges will not be required if
the expected cash flow estimates as projected by management do not occur or
change based on market conditions.
We may be limited in our ability to obtain additional capital on commercially
reasonable terms
Although we believe existing cash, short-term investments and borrowing
capacity, collectively, provide adequate resources to fund ongoing operating
requirements, we may be required to seek additional financing to compete
effectively in our markets. Our public debt ratings affect our ability to raise
capital and the cost of such capital. Our ratings as of November 2, 2005 were
BBB- from both Fitch, Inc. and Standard & Poor's, a division of the McGraw-Hill
Companies, Inc. and Baa3 from Moody's Investors Service, a subsidiary of Moody's
Corporation. Any downgrades may increase our borrowing costs and affect our
ability to access the debt capital markets.
We are subject under our revolving credit facility to financial covenants
that require us to maintain a ratio of total debt to capital and interest
coverage ratio, as defined under the revolving credit facility. These covenants
may limit our ability to borrow funds. Future losses or significant charges
could materially affect these ratios, which may reduce the amounts we are able
to borrow under our revolving credit facility.
If our products or materials purchased from our suppliers experience performance
issues, our business will suffer
Our business depends on the production of excellent products of
consistently high quality. To this end, our products, including materials
purchased from our suppliers, are tested for quality both by us and our
customers. Nevertheless, our products are highly complex, and our customers'
testing procedures are limited to evaluating our products under likely and
foreseeable failure scenarios. For various reasons (including, among others, the
occurrence of performance problems unforeseeable in testing), our products and
materials purchased from our suppliers may fail to perform as expected. In some
cases, product redesigns or additional capital equipment may be required to
correct a defect. In addition, any significant or systemic product failure could
result in customer relations problems, lost sales, and financial damages.
We face intense competition in most of our businesses
We expect that we will face additional competition from existing
competitors, low cost manufacturers and new entrants. Because some of the
markets in which we compete have been historically characterized by rapid growth
and technology changes, smaller niche and start-up companies, or companies with
lower operating costs may become our principal competitors in the future. We
must invest in research and development, expand our engineering, manufacturing
and marketing capabilities, and continue to improve customer service and support
in order to remain competitive. We cannot provide assurance that we will be able
to maintain or improve our competitive position.
We may experience difficulties in enforcing our intellectual property rights and
we may be subject to claims of infringement of the intellectual property rights
of others
We may encounter difficulties in protecting our intellectual property
rights or obtaining rights to additional intellectual property necessary to
permit us to continue or expand our businesses. We cannot assure you that the
patents that we hold or may obtain will provide meaningful protection against
our competitors or competitive technologies. Litigation may be necessary to
enforce our intellectual property rights, to protect our trade secrets and to
determine the validity and scope of our proprietary rights. Litigation is
inherently uncertain and the outcome is often unpredictable. Other companies
hold patents on technologies used in our industries and are aggressively seeking
to expand, enforce and license their patent portfolios.
The intellectual property rights of others could inhibit our ability to
introduce new products. We are, and may in the future be, subject to claims of
intellectual property infringement or misappropriation that may result in loss
of revenue or require us to incur substantial costs. We cannot assure you as to
the outcome of such claims.
Current or future litigation may harm our financial condition or results of
operations
Pending, threatened or future litigation is subject to inherent
uncertainties. Our financial condition or results of operations may be adversely
affected by unfavorable outcomes, expenses and costs exceeding amounts estimated
or insured. In particular, we have been named as a defendant in numerous
lawsuits against PCC and several other defendants involving claims alleging
personal injury from exposure to asbestos. As described in Legal Proceedings,
our negotiations with the representatives of asbestos claimants have produced a
tentative settlement, but certain cases may still be litigated and the final
approval of the tentative settlement is subject to a number of uncertainties.
Final approval of a global settlement through the PCC bankruptcy process may
impact the results of operations for the period in which such costs, if any, are
recognized. Total charges of $635 million have been incurred through September
30, 2005; however, additional charges are possible due to the potential
fluctuation in the price of our common stock, other adjustments in the proposed
settlement, and other litigation factors.
We face risks related to our international operations and sales
We have customers and significant operations, including manufacturing and
sales, located outside the U.S. We have large manufacturing operations for
liquid crystal display glass substrates in the Asia-Pacific region, including
equity investments in companies operating in South Korea that make liquid
crystal display glass and in China that make telecommunications products, and
several significant customers are located in this region. As a result of these
and other international operations, we face a number of risks, including:
o geographical concentration of our factories and operations;
o major health concerns such as Severe Acute Respiratory Syndrome (SARS)
or avian flu;
o difficulty of effectively managing our diverse global operations;
o change in regulatory requirements;
o tariffs, duties and other trade barriers including anti-dumping
duties;
o undeveloped legal systems; and
o political and economic instability in foreign markets.
Any of these items could cause our sales and/or profitability to be
significantly reduced.
We face risks through our equity method investments in companies that we do not
control
Corning's net income includes significant equity in earnings of associated
companies. For the nine months ended September 30, 2005, we have recognized $412
million of equity earnings, of which $482 million came from our two largest
investments; Dow Corning Corporation (which makes silicone products) and Samsung
Corning Precision Glass Co., Ltd. (which makes liquid crystal display glass).
Samsung Corning Precision is located in the Asia-Pacific region and, as such, is
subject to those geographic risks referred to above. With 50% or lower
ownership, we do not control such equity companies nor their management and
operations. Performance of our equity investments may not continue at the same
levels in the future. In the third quarter of 2005, we recognized charges
associated with Samsung Corning Co., Ltd. (our 50% equity method investment that
makes glass panels and funnels for conventional televisions), which recorded
significant fixed asset impairment charges. As the conventional television
market will be negatively impacted by strong growth in the LCD glass market, it
is reasonably possible that Samsung Corning Co., Ltd. may incur additional
restructuring or impairment charges or net operating losses in the future.
We face risks due to foreign currency fluctuations
Because we have significant customers and operations outside the U.S.,
fluctuations in foreign currencies, especially the Japanese yen and Euro, affect
our sales and profit levels. Foreign exchange rates may make our products less
competitive in countries where local currencies decline in value relative to the
dollar. Sales in our Display Technologies segment are denominated in Japanese
yen. For the nine months ended September 30, 2005, the Display Technologies
segment represented 36% of Corning's sales. Based on the expected sales growth
of the Display Technologies segment, our exposure to currency fluctuations is
increasing. Although we hedge significant transaction risk, we do not currently
hedge translation risk.
If the financial condition of our customers declines, our credit risks could
increase
We have experienced, and in the future may experience, losses as a result
of our inability to collect our accounts receivable, as well as the loss of such
customer's ongoing business. If our customers fail to meet their payment
obligations to us, including deposits due under long-term purchase and supply
agreements in our Display Technologies segment, we could experience reduced cash
flows and losses in excess of amounts reserved. As of September 30, 2005,
reserves for trade receivables totaled approximately $28 million.
We may not have adequate insurance coverage for claims against us
We face the risk of loss resulting from, and adverse publicity associated
with, product liability, securities, fiduciary liability, intellectual property,
antitrust, contractual, warranty, fraud and other lawsuits, whether or not such
claims are valid. In addition, our product liability, fiduciary, directors and
officers, property and comprehensive general liability insurance may not be
adequate to cover such claims or may not be available to the extent we expect.
Our insurance costs have increased and may increase further. We may not be able
to get adequate insurance coverage in the future at acceptable costs. A
successful claim that exceeds or is not covered by our policies could require us
to pay substantial sums. Some of the carriers in our excess insurance programs
are in liquidation and may not be able to respond if we should have claims
reaching into excess layers. The financial health of other insurers may
deteriorate and these insurers may not be able to respond if we should have
claims reaching into excess layers. In addition, we may not be able to insure
against certain risks or obtain some types of insurance, such as political
risks, terrorism or war insurance.
We cannot assure you that our stock price will not decline
The market price of our common stock may fluctuate in response to a number
of factors, some of which are beyond our control. The price of our common stock
may be impacted by, among other things, our operational performance, the
expectations of the market and our ability to meet those expectations, industry
and general market conditions. As a result of these or other market conditions
or
changes, there can be no assurance that the price of our common stock will not
decline in the future.
Future sales of our common stock could lower the price of our common stock
After this offering, we will have 1,529,211,864 shares of common stock
outstanding, assuming no exercise of outstanding options. The shares being
offered in this offering will be freely tradable under federal and state
securities laws, to the extent that they are not purchased by our affiliates. In
the future, we may issue additional shares to our employees, directors or
consultants, or in connection with corporate alliances or acquisitions, or in
follow-on offerings to raise additional capital. As such, the issuance of a
substantial number of shares of our common stock in the public market could
occur at any time. The issuance of additional shares could reduce the market
price of our common stock.
USE OF PROCEEDS
The proceeds from the sale of the shares being offered are for the account
of the Trust. Corning will not receive any portion of the proceeds of the sale
of the common stock offered by this prospectus and Corning will bear all
expenses incident to registration of the common stock. The Trust will be
responsible for expenses incurred in selling the common stock, which expenses
may include, among other things, underwriting discounts, brokerage fees and
commissions.
PRICE RANGE OF COMMON STOCK
Our common stock is listed on the New York Stock Exchange under the
symbol "GLW". The table below sets forth, for the periods indicated, the
intra-day high and low sales prices for our common stock as reported on the NYSE
Composite Tape and dividends declared on our common stock.
Cash
Dividends
High Low Declared Per
Price Range Share
2002
First Quarter........................................ $11.15 $6.14 $-
Second Quarter....................................... 7.95 2.80 -
Third Quarter........................................ 4.50 1.36 -
Fourth Quarter....................................... 5.00 1.10 -
2003
First Quarter........................................ 6.40 3.34 -
Second Quarter....................................... 8.49 5.27 -
Third Quarter........................................ 10.06 7.15 -
Fourth Quarter....................................... 12.34 9.23 -
2004
First Quarter........................................ 13.89 10.00 -
Second Quarter....................................... 13.19 10.08 -
Third Quarter........................................ 13.03 9.29 -
Fourth Quarter....................................... 12.96 10.16 -
2005
First Quarter........................................ 12.40 10.61 -
Second Quarter....................................... 17.08 10.97 -
Third Quarter........................................ 21.95 16.03 -
Fourth Quarter (through November 2, 2005)............ 20.58 19.70 -
The last reported sale price of our common stock on the New York Stock
Exchange on November 2, 2005 was $20.38
DESCRIPTION OF CORNING CAPITAL STOCK
Authorized Capital Stock
Corning's authorized capital stock consists of 3,800,000,000 shares of
common stock, $.50 par value, and 10,000,000 shares of preferred stock, $100 par
value.
Common Stock
As of October 28, 2005, there were 1,524,211,864 outstanding shares of
Corning common stock held by approximately 26,979 holders of record. The holders
of Corning common stock are entitled to one vote for each share on all matters
submitted to a vote of shareholders and do not have cumulative voting rights.
Corning's board of directors is classified into three classes of approximately
equal size, one of which is elected each year. Accordingly, holders of a
majority of the Corning common stock entitled to vote in any election of
directors may elect all of the directors standing for election. The holders of
Corning common stock are entitled to share ratably in all assets of Corning
which are legally available for distribution, after payment of all debts and
other liabilities and subject to the prior rights of any holders of Corning
preferred stock then outstanding. Effective July 9, 2001, Corning's board of
directors determined that no future dividends will be paid. The holders of
Corning common stock have no preemptive, subscription, redemption or conversion
rights. The outstanding shares of Corning common stock are fully paid and
nonassessable. The rights, preferences and privileges of holders of Corning
common stock are subject to the rights of the holders of shares of any series of
Corning preferred stock which Corning may issue in the future.
Preferred Stock
Corning has designated 2,400,000 shares of its preferred stock as Series A
junior participating preferred stock and 5,750,000 shares as Series C mandatory
convertible preferred stock. All remaining 613,805 outstanding shares of Corning
Series C mandatory convertible preferred stock converted into 31,189,273 shares
of Corning common stock on August 16, 2005. Therefore, no Corning preferred
stock is currently outstanding. Series A preferred stock is reserved for
issuance upon exercise of the rights distributed to the holders of Corning
common stock pursuant to the Corning Rights Agreement referred to below.
Corning's board of directors has the authority, without further shareholder
approval, to create other series of preferred stock, to issue shares of
preferred stock in such series up to the maximum number of shares of the
relevant class of preferred stock authorized, and to fix the dividend rights and
terms, conversion rights and terms, voting rights, redemption rights and terms,
liquidation preferences, sinking funds and any other rights, preferences and
limitations applicable to each such series of Corning preferred stock. The
purpose of authorizing Corning's board of directors to determine such rights and
preferences is to eliminate delays associated with a shareholder vote on
specific issuances. The issuance of Corning preferred stock, while providing
flexibility in connection with possible acquisitions and other corporate
purposes, could, among other things, adversely affect the voting power of
holders of Corning common stock and, under certain circumstances, make it more
difficult for a third party to gain control of Corning.
Rights Agreement
Corning has adopted a Rights Agreement, dated as of June 5, 1996, which
provides for the issuance of one right to the holder of each share of Corning
common stock. Ten days after any person or
group acquires or announces its intention to acquire 20% or more of the
outstanding Corning common stock, each Corning right will entitle the holder,
other than the acquiring person or group, to purchase one one-hundredth of a
share of Series A preferred stock, at an exercise price of $41.67 subject to
certain antidilution adjustments.
If a person or group announces its intention to acquire 20% or more of the
outstanding Corning common stock or if Corning is acquired in a merger or other
business combination or sells 50% or more of its assets or earning power, each
Corning right, other than a Corning right beneficially owned by the acquiring
person or group, which will be void, will entitle the holder to purchase, at the
exercise price, common stock of the acquiring person or group having a current
market value of two times the exercise price of the right. Prior to a person or
group acquiring 50% or more of the outstanding Corning common stock, Corning's
board of directors may also elect to issue a share of Corning common stock in
exchange for each Corning right, other than Corning rights held by the acquiring
person or group.
The Corning rights expire on July 15, 2006, unless this expiration date is
extended or the Corning rights are exchanged or redeemed by Corning before such
date. Prior to an announcement by a person or group of its intent to acquire 20%
or more of the outstanding Corning common stock, Corning may redeem the Corning
rights in whole, but not in part, for $.01 per Corning right, or it may amend
the Corning Rights Agreement in any way without the consent of the holders of
the Corning rights.
Transfer Agent and Register
The transfer agent and registrar for the Corning common stock is
Computershare Investor Services LLC in Chicago, Illinois.
PLAN OF DISTRIBUTION
We have been authorized by our Board of Directors to make voluntary
contributions of up to 10,000,000 shares of our common stock to the Trust on or
before December 31, 2005. Our Board of Directors has directed that the Trustee
promptly sell the shares of common stock upon contribution. The Trust is an
underwriter within the meaning of the Securities Act of 1933, as amended (the
"Securities Act"). The Trust may offer the shares from time to time, depending
on market conditions and other factors, in one or more transactions on the New
York Stock Exchange or any other national securities exchange or automated
interdealer quotation system on which shares of our common stock are then
listed, through negotiated transactions or otherwise. The shares will be sold at
prices and on terms then prevailing, at prices related to the then-current
market price or at negotiated prices. The shares may be offered in any manner
permitted by law, including through underwriters, brokers, dealers or agents,
and directly to one or more purchasers. Sales of the shares may involve:
o ordinary brokerage transactions and transactions in which a broker
solicits purchasers;
o block transactions in which the broker or dealer engaged will attempt
to sell shares as agent, but may position and resell a portion of the
block as principal to facilitate the transaction;
o purchases by a broker or dealer as principal and resale by the broker
or dealer for its account; or
o sales to underwriters who will acquire shares for their own account
and resell them in one or more transactions at fixed prices or at
varying prices determined at the time of sale.
The Trust and/or purchasers of the shares may pay brokers and dealers for
selling shares. These payments may be in the form of underwriting discounts,
concessions or commissions. Any broker dealer who sells or assists the Trust in
selling the shares may be deemed an underwriter within the meaning of the
Securities Act. If they are deemed to be underwriters, any brokerage commissions
or discounts may be deemed to be underwriting discounts and commissions under
the Securities Act. We will file, as necessary, a prospectus supplement when the
Trust notifies us that it has entered into an arrangement with an underwriter,
broker or dealer for the sale of shares. The prospectus supplement will disclose
certain material information, including:
o the number of shares being offered;
o the terms of the offering;
o any discounts, commissions or other compensation paid to underwriters,
brokers or dealers;
o the public offering price;
o any discounts, commissions or concessions allowed or reallowed or paid
by any underwriters to dealers; and
o other material terms of the offering.
In order to comply with securities laws of certain jurisdictions, if
applicable, the shares may be sold in these jurisdictions only through
registered or licensed brokers or dealers. In addition, in certain
jurisdictions, the shares may not be sold unless the shares have been registered
or qualified for sale in these jurisdictions, or an exemption from registration
or qualification is available and complied with. The Trust and any other persons
participating in the sales of the shares pursuant to this prospectus may be
subject to applicable provisions of the Securities Exchange Act of 1934, as
amended (the "Exchange Act") and the rules and regulations under the Exchange
Act.
Rather than selling shares under the prospectus, the Trust may also sell
shares in reliance upon Rule 144 of the Securities Act, provided it meets the
criteria and conforms to the requirements of Rule 144.
We will not receive any of the proceeds from the sale of the shares by the
Trust. We will bear the costs of registering the shares under the Securities
Act, including the registration fee under the Securities Act, accounting fees,
printing fees, fees and disbursements of our counsel, and certain fees and
disbursements of counsel to the Trustee. The Trust will be responsible for
underwriting discounts, brokerage fees and commissions, if any, incurred in
connection with the sale of shares.
We have agreed to indemnify the Trust against certain liabilities,
including liabilities under the Securities Act, or to contribute to payments the
Trust may be required to make in respect of those liabilities.
We have agreed to maintain the effectiveness of the registration statement
of which this prospectus is a part until the earlier of (a) the date on which
all of the shares registered under the registration statement of which this
prospectus is a part are sold and (b) the one year anniversary of the date of
the contribution to the Trust.
The pension plan is a "pension plan" as defined in ERISA. Prohibited
transactions under Title I of ERISA and Section 4975 of the Code, could arise
if, absent an available exemption, a person or entity which is a "party in
interest," as defined under ERISA, or a "disqualified person," as defined under
the Code, were to purchase any of the shares being offered by the Trust. Any
such potential purchaser should consult with counsel to determine whether an
exemption is available with respect to any such purchase.
LEGAL MATTERS
The validity of the shares of our common stock is being passed on for us by
William D. Eggers, Esq., Senior Vice President and General Counsel of Corning
Incorporated. Mr. Eggers owns substantially less than 1% of the outstanding
shares of our common stock.
EXPERTS
The financial statements and management's assessment of the effectiveness
of internal control over financial reporting (which is included in Management's
Report on Internal Control Over Financial Reporting) incorporated in this
prospectus by reference to our Annual Report on Form 10-K for the year ended
December 31, 2004 have been so incorporated in reliance on the report of
PricewaterhouseCoopers LLP, an independent registered public accounting firm,
given on the authority of said firm as experts in auditing and accounting.
WHERE YOU CAN FIND MORE INFORMATION
Corning is subject to the informational requirements of the Securities
Exchange Act of 1934 and, in accordance therewith file reports, proxy statements
and other information with the Securities and Exchange Commission. The reports,
proxy statements and other information filed by Corning with the Commission can
be viewed electronically through the Commission's Electronic Data Gathering,
Analysis and Retrieval (EDGAR) system. The Commission maintains a World Wide Web
site at http://www.sec.gov that contains reports, proxy and information
statements and other information regarding registrants that file electronically
with the Commission. Copies can be inspected and copied at the public reference
facilities maintained by the Commission at 100 F Street, N.E., Washington, D.C.
20549. Information regarding the Public Reference Room may be obtained by
calling the Commission at (800) 732-0330. Corning common stock is listed on the
New York Stock Exchange. Reports and other information concerning Corning may
also be inspected at the offices of the New York Stock Exchange, 20 Broad
Street, New York, New York 10005.
Corning has filed with the Commission a registration statement on Form S-3
under the Securities Act with respect to the shares of Corning common stock
issued in connection with its proposed contribution of shares of common stock to
the Trust for the benefit of the Plan. This prospectus does not contain all the
information set forth in the registration statement, selected portions of which
are omitted in accordance with the rules and regulations of the Commission. For
further information with respect to Corning and the Corning common stock,
reference is made to the registration statement (including its exhibits).
The Commission allows us to "incorporate by reference" information into
this prospectus, which means that we can disclose important information to you
by referring you to another document filed separately with the Commission.
Statements contained in this prospectus or in any document incorporated by
reference in this prospectus as to the contents of any contract or other
document referred to herein or therein are not necessarily complete, and in each
instance reference is made to the copy of such contract or other document, if
any, filed as an exhibit to the registration statement or such other document,
each such statement being qualified in all respects by such reference. The
information incorporated by reference is deemed to be part of this prospectus.
This prospectus incorporates by reference the documents set forth below that
Corning has previously filed with the Commission. These documents contain
important information about Corning and its finances.
Corning Filings (File No. 1-03247) Period
---------------------------------- ------
Annual Report on Form 10-K............Year ended December 31, 2004
Filed February 22, 2005
Quarterly Reports on Form 10-Q .......Quarter ended March 31, 2005
Filed April 26, 2005
Quarter ended June 30, 2005
Filed July 29, 2005
Quarter ended September 30, 2005
Filed November 2, 2005
Registration Statement on Form 8-A....Filed July 11, 1996
Current Reports on Form 8-K...........Filed January 26, 2005
Filed February 8, 2005
Filed March 1, 2005
Filed March 17, 2005
Filed May 2, 2005
Filed May 2, 2005
Filed May 2, 2005
Filed June 21, 2005
Filed July 21, 2005
Filed September 20, 2005
Filed September 21, 2005
Filed October 7, 2005
Current Report on form 8-K/A .........Filed May 2, 2005
All documents and reports subsequently filed by Corning pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the termination of this
offering shall be deemed to be incorporated by reference in this prospectus and
to be a part hereof from the date of filing of such documents or reports. Any
statement contained in a document incorporated or deemed to be incorporated by
reference herein shall be deemed to be modified or superseded for purposes of
this prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this prospectus.
This prospectus incorporates important business and financial information
about Corning that is not included in or delivered with this prospectus.
Documents incorporated by reference which are not presented herein or delivered
herewith (other than exhibits to such documents unless such exhibits are
specifically incorporated by reference) are available to any person, including
any beneficial owner, to whom this prospectus is delivered, on written or oral
request, without charge to: Corning Incorporated, One Riverfront Plaza, Corning,
New York 14831 (telephone number (607) 974-9000), Attention: Corporate
Secretary.