10-Q/APeriod: Q3 FY2005

CORNING INC /NY Quarterly Report (Amendment) for Q3 Ended Sep 30, 2005

Filed May 9, 2006For Securities:GLW

Summary

This 10-Q/A filing from Corning Inc. (GLW) primarily concerns the restatement of previously issued financial statements for the periods ending March 31, 2003, through December 31, 2005. The restatements were necessary to correct accounting errors related to the asbestos settlement liability and the investment in Pittsburgh Corning Europe. The company also reclassified accretion on a portion of the asbestos settlement liability from interest expense to asbestos settlement expense. Despite the restatements, Corning reported improved financial performance for the nine months ended September 30, 2005, compared to the same period in 2004, with net income of $618 million versus a net loss of $2,381 million. Net sales increased by 20% year-over-year, driven by strong demand in the Display Technologies and Telecommunications segments. The company highlighted significant capital expenditures, primarily for expanding LCD glass manufacturing capacity.

Key Highlights

  • 1Corning Inc. restated its financial statements for periods from March 31, 2003, to December 31, 2005, due to accounting errors in asbestos settlement liability and investment in Pittsburgh Corning Europe.
  • 2The restatements resulted in a cumulative increase to investments in affiliate companies, other accrued liabilities, accumulated deficit, and accumulated other comprehensive income on the balance sheet.
  • 3For the nine months ended September 30, 2005, net income was $618 million, a significant improvement from a net loss of $2,381 million in the prior year period.
  • 4Net sales increased by 20% year-over-year to $3,379 million for the nine months ended September 30, 2005, driven by strong performance in Display Technologies and Telecommunications segments.
  • 5The company's balance sheet remains strong, with $2.4 billion in cash, cash equivalents, and short-term investments as of September 30, 2005.
  • 6Corning is making significant capital expenditures, with $1,076 million invested in the first nine months of 2005, primarily for expanding LCD glass manufacturing capacity.
  • 7The company identified material weaknesses in its internal control over financial reporting related to the asbestos settlement liability and equity investments, and has initiated remediation plans.

Frequently Asked Questions

Corning Inc. restated its financial statements for periods from March 31, 2003, through December 31, 2005, to correct accounting errors related to its asbestos settlement liability and its investment in Pittsburgh Corning Europe. The company also reclassified accretion on a portion of the asbestos settlement liability.

For the nine months ended September 30, 2005, Corning Inc. reported a net income of $618 million, a significant improvement from a net loss of $2,381 million during the same period in 2004. Net sales increased by 20% to $3,379 million.

Corning's sales growth is primarily driven by strong demand in its Display Technologies segment, particularly for LCD glass substrates, and its Telecommunications segment, which benefits from fiber-to-the-premises projects. The company is also investing in expanding manufacturing capacity for these segments.

Yes, Corning Inc. identified material weaknesses in its internal control over financial reporting related to the valuation of its asbestos settlement liability and the completeness and accuracy of its equity investments. The company has outlined remediation plans to address these weaknesses.