GLW Corning Inc

Corning Incorporated (NYSE:GLW) today announced results for the first quarter of 2009, as well as its expectations for the second quarter.

First-Quarter Highlights

• Sales were $989 million, a 9% decrease sequentially.
• Earnings per share (EPS) were $0.01. Excluding special items, EPS were $0.10,* down 23% sequentially.
• Display Technologies combined LCD glass volume, including Corning�s wholly owned business and Samsung Corning Precision Glass Co., Ltd. (SCP), increased 4% sequentially. Volume in the company�s wholly owned business was down 1% sequentially, while SCP�s volume was up about 7%.
• Gross margin was 27%, slightly lower than fourth-quarter gross margin of 28%.
• Corporate restructuring charges were $165 million pretax and in line with expectations.

Quarter One Financial Comparisons

� � Q1 2009 � � Q4 2008 � � % Change � � Q1 2008 � � % Change Net Sales in millions � $989 � � $1,084 � � (9%) � � $1,617 � � (39%) Net Income in millions � $14 � � $249 � � (94%) � � $1,029 � � (99%) Non-GAAP Net Income

in millions*

� $150 � � $208 � � (28%) � � $702 � � (79%) GAAP EPS � $0.01 � � $0.16 � � (94%) � � $0.64 � � (98%) Non-GAAP EPS* � $0.10 � � $0.13 � � (23%) � � $0.44 � � (77%)

*These are non-GAAP financial measures. The reconciliation between GAAP and non-GAAP measures is provided in the tables following this news release, as well as on the company�s investor relations website.

�We were very pleased with our first-quarter performance given the high level of economic uncertainty we were facing,� Wendell P. Weeks, chairman and chief executive officer, said. �The biggest questions we had coming into the first quarter were first, would the strong LCD TV sales rate continue in this tough environment, and second, when would the display supply chain contraction end? It was satisfying to see the continued strength of LCD TV sales at retail worldwide throughout the first quarter. We were also pleased to see demand for our glass pick up sooner than we anticipated, an indication that the display supply chain contraction was ending. These contributed to stronger-than-expected sales and earnings performance this quarter.�

First-Quarter Segment Results

Sales in the Display Technologies segment were $357 million, down 8% sequentially. Sequential price declines were significant, but in line with the company�s expectations. Positive foreign exchange rate movements basically offset the slight volume decline in the wholly owned business.

Telecommunications segment sales were $385 million, down 5% sequentially. Stronger optical fiber, cable and private network demand in China was offset by lower private network, cable, and hardware and equipment sales in North America.

Environmental Technologies segment sales were $110 million, down 14% sequentially, mirroring the difficulties experienced in the global automotive industry and continued weakness in heavy-duty diesel sales in the U.S.

Corning�s equity earnings were $195 million, down significantly from last year�s fourth-quarter equity earnings of $288 million. Equity earnings from Dow Corning Corporation were $5 million, an appreciable decline from the fourth quarter. First-quarter equity earnings from Dow Corning include $29 million in restructuring charges. Samsung Corning Precision�s equity earnings contribution was $187 million, down 2% versus the fourth quarter of last year. Volume gains were more than offset by price declines, which were higher than Corning�s wholly owned business.

Looking Forward

James B. Flaws, vice chairman and chief financial officer, said, �While economic uncertainty remains, we are expecting strong growth in display as our customers continue to ramp their capacity to match end market demand. We anticipate sequential volumes at our wholly owned business to be up more than 50% and up more than 25% at SCP. Therefore, we foresee relighting several of our glass melting tanks sooner than planned.

�With increased volume and manufacturing capacity,� he continued, �we should see considerable improvement in both the display segment�s and the company�s gross margins in the second quarter.� He noted that up through the end of the first quarter, Corning used existing inventory to meet the increase in glass demand. The company expects second-quarter glass price declines at both its wholly owned business and SCP to be much more moderate compared to the first quarter.

The company has increased its estimate for the 2009 LCD glass market from 2 billion square feet to a range of 2.1 billion to 2.2 billion square feet. The change was driven by stronger-than-anticipated demand for LCD TVs, offset slightly by weaker-than-expected demand for notebook computers. The company now expects LCD TV units to grow 18% this year versus its original expectation of 9%.

Corning expects modest sequential growth in its other business segments in the second quarter. Also, Dow Corning has seen improving monthly sales which could lead to notably better results for its earnings.

Flaws reminded investors that the company is not providing specific sales or earnings guidance for the second quarter. �However,� he said, �We expect to see significant sequential improvement in the company�s sales, gross margin, and earnings before special items.* Second-quarter results will also benefit from our recently completed fixed cost reduction programs.�

He pointed out that Corning acted decisively to resize the company�s cost structure in line with $5 billion in sales this year. �As we said previously, if we do not see continued growth into the second half of this year, we will consider taking further corporate-wide restructuring actions to improve profitability.�

In concluding his comments, Flaws said, �We are encouraged by the early market interest and growth opportunities for some of our recent product innovations. A good example is Gorilla� glass, our durable glass for touch screen and electronic applications. Gorilla glass has already been designed into 20 different electronic devices including both cell phones and notebook computers from more than seven separate manufacturers. We believe Corning has the right product mix and is well positioned in core markets to seize the upside when economic growth returns.�

First-Quarter Conference Call Information

The company will host a first-quarter conference call on Monday, April 27 at 8:30 a.m. ET. To access the call, dial (800) 398-9379, or international access call (612) 288-0329 approximately 10 - 15 minutes prior to the start of the call. The password is �QUARTER ONE�. The host is �SOFIO�. To listen to a live audio webcast of the call, go to http://www.corning.com/investor_relations and follow the instructions. A replay will be available beginning at 10:30 a.m. ET and will run through 5:00 p.m. ET, Monday, May 11 2009. To listen, dial (800) 475-6701 or for international access dial (320) 365-3844. The access code is 994513. The webcast will be archived for one year following the call.

Presentation of Information in this News Release

Non-GAAP financial measures are not in accordance with, or an alternative to, GAAP. Corning�s non-GAAP net income and EPS measures exclude restructuring, impairment and other charges and adjustments to prior estimates for such charges. Additionally, the company�s non-GAAP measures exclude adjustments to asbestos settlement reserves, gains and losses arising from debt retirements, charges or credits arising from adjustments to the valuation allowance against deferred tax assets, equity method charges resulting from impairments of equity method investments or restructuring, impairment or other charges taken by equity method companies and gains from discontinued operations. The company believes presenting non-GAAP net income and EPS measures is helpful to analyze financial performance without the impact of unusual items that may obscure trends in the company�s underlying performance. These non-GAAP measures are reconciled on the company�s Web site at www.corning.com/investor_relations and accompany this news release.

About Corning Incorporated

Corning Incorporated (www.corning.com) is the world leader in specialty glass and ceramics. Drawing on more than 150 years of materials science and process engineering knowledge, Corning creates and makes keystone components that enable high-technology systems for consumer electronics, mobile emissions control, telecommunications and life sciences. Our products include glass substrates for LCD televisions, computer monitors and laptops; ceramic substrates and filters for mobile emission control systems; optical fiber, cable, hardware & equipment for telecommunications networks; optical biosensors for drug discovery; and other advanced optics and specialty glass solutions for a number of industries including semiconductor, aerospace, defense, astronomy and metrology.

Forward-Looking and Cautionary Statements

This press release contains �forward-looking statements� (within the meaning of the Private Securities Litigation Reform Act of 1995), which are based on current expectations and assumptions about Corning�s financial results and business operations, that involve substantial risks and uncertainties that could cause actual results to differ materially. These risks and uncertainties include: the effect of global political, economic and business conditions;�conditions in the�financial and credit markets;�currency fluctuations;�tax rates; product demand and industry capacity; competition; reliance on a concentrated customer base; manufacturing efficiencies; cost reductions; availability of critical components and materials; new product commercialization; pricing fluctuations�and�changes in the mix of sales between premium and non-premium products; new plant start-up�or restructuring�costs; possible disruption in commercial activities due to terrorist activity, armed conflict, political instability or major health concerns; adequacy of insurance; equity company activities; acquisition and divestiture activities; the level of excess or obsolete inventory; the rate of technology change; the ability to enforce patents; product and components performance issues; stock price fluctuations; and adverse litigation or regulatory developments.�These and other�risk factors are�detailed�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.

� � CORNING INCORPORATED AND SUBSIDIARY COMPANIES

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited; in millions, except per share amounts)

� � Three months ended March 31, 2009 2008 � Net sales $ 989 $ 1,617 Cost of sales � 719 � � 773 � � Gross margin 270 844 � Operating expenses: Selling, general and administrative expenses 207 242 Research, development and engineering expenses 151 151 Amortization of purchased intangibles 3 2 Restructuring, impairment and other charges and (credits) (Note 1) 165 (1 ) Asbestos litigation charge (credit) (Note 2) � 4 � � (327 ) � Operating (loss) income (260 ) 777 � Equity in earnings of affiliated companies (Note 3) 195 312 Interest income 7 30 Interest expense (14 ) (18 ) Other income, net � 20 � � 2 � � (Loss) income before income taxes (52 ) 1,103 Benefit (provision) for income taxes � 66 � � (74 ) � Net income attributable to Corning Incorporated $ 14 � $ 1,029 � � Basic earnings per common share (Note 4) $ 0.01 � $ 0.66 � Diluted earnings per common share (Note 4) $ 0.01 � $ 0.64 � Dividends declared per common share $ 0.05 � $ 0.05 � � See accompanying notes to these financial statements. � Certain amounts for 2008 were reclassified to conform to the 2009 presentation. � � CORNING INCORPORATED AND SUBSIDIARY COMPANIES

CONSOLIDATED BALANCE SHEETS

(Unaudited; in millions, except per share amounts)

� March 31, December 31, 2009 2008 Assets � Current assets: Cash and cash equivalents $ 1,780 $ 1,873 Short-term investments, at fair value � 805 � � 943 � Total cash, cash equivalents and short-term investments 2,585 2,816 Trade accounts receivable, net of doubtful accounts and allowances 593 512 Inventories 731 798 Deferred income taxes 151 158 Other current assets � 379 � � 335 � Total current assets 4,439 4,619 � Investments 2,435 3,056 Property, net of accumulated depreciation 7,806 8,199 Goodwill and other intangible assets, net 302 305 Deferred income taxes 3,059 2,932 Other assets � 137 � � 145 � � Total Assets $ 18,178 � $ 19,256 � � Liabilities and Equity � Current liabilities: Current portion of long-term debt $ 68 $ 78 Accounts payable 542 846 Other accrued liabilities � 982 � � 1,128 � Total current liabilities 1,592 2,052 � Long-term debt 1,596 1,527 Postretirement benefits other than pensions 774 784 Other liabilities � 1,521 � � 1,402 � Total liabilities � 5,483 � � 5,765 � � Commitments and contingencies Shareholders� equity: Common stock - Par value $0.50 per share; Shares authorized: 3.8 billion; Shares issued: 1,612 million and 1,609 million 806 804 Additional paid-in capital 12,576 12,502 Retained earnings 1,876 1,940 Treasury stock, at cost; Shares held: 63 million and 61 million (1,202 ) (1,160 ) Accumulated other comprehensive loss � (1,409 ) � (643 ) Total Corning Incorporated shareholders' equity � 12,647 � � 13,443 � Noncontrolling interest � 48 � � 48 � Total equity � 12,695 � � 13,491 � � Total Liabilities and Equity $ 18,178 � $ 19,256 � � See accompanying notes to these financial statements. � Certain amounts for 2008 were reclassified to conform to the 2009 presentation. � � CORNING INCORPORATED AND SUBSIDIARY COMPANIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited; in millions)

� Three months ended March 31, 2009 2008 Cash Flows from Operating Activities: Net income attributable to Corning Incorporated $ 14 $ 1,029 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 175 157 Amortization of purchased intangibles 3 2 Asbestos litigation 4 (327 ) Restructuring charges (credits) 165 (1 ) Stock compensation charges 35 41 Undistributed earnings of affiliated companies 208 (161 ) Deferred tax benefit (119 ) (2 ) Restructuring payments (12 ) (7 ) Customer deposits, net of (credits) issued (103 ) (66 ) Employee benefit payments less than (in excess of) expense 17 (48 ) Changes in certain working capital items: Trade accounts receivable (111 ) (50 ) Inventories 39 (32 ) Other current assets (23 ) (21 ) Accounts payable and other current liabilities, net of restructuring payments (89 ) (224 ) Other, net � 61 � � 5 � Net cash provided by operating activities � 264 � � 295 � � Cash Flows from Investing Activities: Capital expenditures (276 ) (467 ) Net proceeds from sale or disposal of assets 12 Short-term investments - acquisitions (104 ) (724 ) Short-term investments - liquidations � 242 � � 816 � Net cash used in investing activities � (126 ) � (375 ) � Cash Flows from Financing Activities: Net repayments of short-term borrowings and current portion of long-term debt (63 ) (9 ) Principal payments under capital lease obligations (9 ) Proceeds from issuance of common stock, net 5 4 Proceeds from the exercise of stock options 1 18 Repurchase of common stock (62 ) Dividends paid (78 ) (78 ) Other, net � 1 � � (2 ) Net cash used in financing activities � (143 ) � (129 ) Effect of exchange rates on cash � (88 ) � 117 � Net decrease in cash and cash equivalents (93 ) (92 ) Cash and cash equivalents at beginning of period � 1,873 � � 2,216 � � Cash and cash equivalents at end of period $ 1,780 � $ 2,124 � � Certain amounts for 2008 were reclassified to conform with the 2009 presentation. � � CORNING INCORPORATED AND SUBSIDIARY COMPANIES

SEGMENT RESULTS

(Unaudited; in millions)

� � � � � � � Our reportable operating segments include Display Technologies, Telecommunications, Environmental Technologies, Specialty Materials and Life Sciences. � � Display Telecom- Environmental Specialty Life All Technologies munications Technologies Materials Sciences Other Total � Three months ended March 31, 2009 Net sales $ 357 $ 385 $ 110 $ 60 $ 76 $ 1 $ 989 Depreciation (1) $ 104 $ 31 $ 24 $ 10 $ 4 $ 3 $ 176 Amortization of purchased intangibles $ 3 $ 3 Research, development and engineering expenses (2) $ 22 $ 23 $ 30 $ 11 $ 3 $ 36 $ 125 Restructuring, impairment and other charges $ 34 $ 15 $ 19 $ 18 $ 7 $ 4 $ 97 Equity in earnings (loss) of affiliated companies $ 180 $ (4 ) $ 2 $ 12 $ 190 Income tax (provision) benefit (3) $ (7 ) $ 1 � $ 14 � $ 10 � � � $ 7 � $ 25 � Net income (loss) (4) $ 218 � $ (1 ) $ (44 ) $ (27 ) $ 8 � $ (29 ) $ 125 � � Three months ended March 31, 2008 Net sales $ 829 $ 421 $ 197 $ 83 $ 81 $ 6 $ 1,617 Depreciation (1) $ 90 $ 27 $ 24 $ 8 $ 4 $ 3 $ 156 Amortization of purchased intangibles $ 2 $ 2 Research, development and engineering expenses (2) $ 24 $ 24 $ 33 $ 9 $ 2 $ 36 $ 128 Restructuring, impairment and other credits $ (1 ) $ (1 ) Equity in earnings of affiliated companies $ 207 $ 1 $ 22 $ 230 Income tax provision $ (61 ) $ (5 ) $ (5 ) � � $ (5 ) $ (2 ) $ (78 ) Net income (loss) (4) $ 679 � $ 11 � $ 13 � $ (4 ) $ 10 � $ (27 ) $ 682 � (1) � Depreciation expense for Corning�s reportable segments 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) Effective January 1, 2009, we began providing U.S. income tax expense (or benefit) on U.S. earnings (losses) due to the change in our conclusion about the realizability of our U.S. deferred tax assets in 2008. As a result of the change in our tax position, we adjusted the allocation of taxes to our operating segments in 2009 to reflect this difference. � (4) 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. � � CORNING INCORPORATED AND SUBSIDIARY COMPANIES

SEGMENT RESULTS

(Unaudited; in millions)

� � A reconciliation of reportable segment net income to consolidated net income follows (in millions): � � � � � � � Three months ended March 31, � � 2009 � 2008 Net income of reportable segments $ 154 $ 709 Non-reportable segments (29 ) (27 ) Unallocated amounts: Net financing costs (1) (20 ) 9 Stock-based compensation expense (35 ) (41 ) Exploratory research (20 ) (18 ) Corporate contributions (9 ) (11 ) Equity in earnings of affiliated companies (2) 5 82 Asbestos litigation (3) (4 ) 327 Other corporate items (4) � � (28 ) � � (1 ) Net income � $ 14 � � $ 1,029 � (1) � Net financing costs include interest income, interest expense, and interest costs and investment gains associated with benefit plans. � (2) Represents the equity of Dow Corning Corporation. In the first quarter of 2009, equity earnings of affiliated companies, net of impairments includes a charge of $29 million representing restructuring charges at Dow Corning Corporation. � (3) In the first quarter of 2008, Corning reduced its liability for asbestos litigation as a result of the increase in the likelihood of a settlement under recently proposed terms and a corresponding decrease in the likelihood of a settlement under terms established in 2003. � (4) In the first quarter of 2009, other corporate items included $68 million ($44 million after-tax) of restructuring charges. � � CORNING INCORPORATED AND SUBSIDIARY COMPANIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

� � 1. Restructuring � In the first quarter of 2009, Corning recorded a charge of $165 million ($107 million after-tax), which was comprised primarily of severance costs, special termination benefits and outplacement services for a corporate-wide restructuring plan. � 2. Asbestos Litigation � 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 Corning and Pittsburgh Corning Corporation (PCC) which might arise from PCC products or operations (the 2003 Plan). On December 21, 2006, the Bankruptcy Court issued an order denying confirmation of the 2003 Plan. On January 10, 2008, some of the parties in the proceeding advised the Bankruptcy Court that they had made substantial progress on an amended plan of reorganization (the Amended PCC Plan) that resolved issues raised by the Court in denying the confirmation of the 2003 Plan. � As a result of progress in the parties� continuing negotiations, Corning believes the Amended PCC Plan now represents the most probable outcome of this matter and the probability that the 2003 plan will become effective has diminished. The proposed settlement under the Amended PCC Plan requires Corning to contribute its equity interest in PCC and Pittsburgh Corning Europe, N.V. (PCE) and to contribute a fixed series of cash payments, recorded at present value on December 31, 2008. Corning will have the option to contribute shares rather than cash, but the liability is fixed by dollar value and not number of shares. As a result, the estimated asbestos litigation liability is no longer impacted by movements in the value of Corning common stock. The Amended PCC Plan does not include non-PCC asbestos claims that may be or have been raised against Corning. Corning has recorded an additional amount for such claims in its estimated asbestos litigation liability. � In the first quarter of 2009, we recorded charges of $4 million ($2 million after-tax) to adjust the asbestos litigation liability for the change in value of the components of the Amended PCC Plan. � 3. Equity in Earnings of Affiliated Companies �

In the first quarter of 2009, equity in earnings of affiliated companies included charges of $29 million ($27 million after-tax) for Corning�s share of the restructuring charges at Dow Corning Corporation.

� 4. Weighted Average Shares Outstanding � Weighted average shares outstanding are as follows (in millions): � � Three months ended Three months ended

�������������March 31,�������������

December 31,

����2009����

����2008����

����2008����

� Basic 1,548 1,566 1,546 Diluted 1,559 1,598 1,559

Diluted used for non-GAAP measures

1,559 1,598 1,559 � � CORNING INCORPORATED AND SUBSIDIARY COMPANIES

QUARTERLY SALES INFORMATION

(Unaudited; in millions)

� � � � � � 2009 2008 Q1 Q1 Q2 Q3 Q4 Total � Display Technologies $ 357 $ 829 $ 809 $ 696 $ 390 $ 2,724 � Telecommunications Fiber and cable 192 214 248 258 200 920 Hardware and equipment � 193 � 207 � 229 � 238 � 205 � 879 385 421 477 496 405 1,799 � Environmental Technologies Automotive 64 137 132 112 77 458 Diesel � 46 � 60 � 77 � 65 � 51 � 253 110 197 209 177 128 711 � Specialty Materials 60 83 104 101 84 372 � Life Sciences 76 81 87 83 75 326 � Other � 1 � 6 � 6 � 2 � 2 � 16 � Total $ 989 $ 1,617 $ 1,692 $ 1,555 $ 1,084 $ 5,948 � The above supplemental information is intended to facilitate analysis of Corning�s businesses. � � CORNING INCORPORATED AND SUBSIDIARY COMPANIES

RECONCILIATION OF NON-GAAP FINANCIAL MEASURE TO GAAP FINANCIAL MEASURE

Three Months Ended March 31, 2009

(Unaudited; amounts in millions, except per share amounts)

� � � � � � � � � � � � � � Corning�s net income and earnings per share (EPS) excluding special items for the first quarter of 2009 are non-GAAP financial measures within the meaning of Regulation G of the Securities and Exchange Commission. Non-GAAP financial measures are not in accordance with, or an alternative to, generally accepted accounting principles (GAAP). The company believes presenting non-GAAP net income and EPS is helpful to analyze financial performance without the impact of unusual items that may obscure trends in the company�s underlying performance. A detailed reconciliation is provided below outlining the differences between these non-GAAP measures and the directly related GAAP measures. �

Per

Share

Income (Loss)

Before

Income Taxes

Net

Income

� Earnings per share (EPS) and net income, excluding special items $ 0.10 $ 146 $ 150 � Special items: Restructuring charges (a) (0.07 ) (165 ) (107 ) � Asbestos litigation (b) (4 ) (2 ) � Equity in earnings of affiliated companies (c) � (0.02 ) � (29 ) � (27 ) � Total EPS and net income $ 0.01 � $ (52 ) $ 14 � � �

(a)�

In the first quarter of 2009, Corning recorded a charge of $165 million ($107 million after-tax), which was comprised primarily of severance costs, special termination benefits and outplacement services for a corporate-wide restructuring plan. �

(b)�

In the first quarter of 2009, Corning recorded a charge of $4 million ($2 million after-tax) to adjust the asbestos liability for change in value of the components of the Amended PCC Plan. �

(c)�

In the first quarter of 2009, equity in earnings of affiliated companies included a charge of $29 million ($27 million after-tax) for our share of the restructuring charges at Dow Corning Corporation. � � CORNING INCORPORATED AND SUBSIDIARY COMPANIES

RECONCILIATION OF NON-GAAP FINANCIAL MEASURE TO GAAP FINANCIAL MEASURE

Three Months Ended March 31, 2008

(Unaudited; amounts in millions, except per share amounts)

� � � � � � � � � � � � � Corning�s net income and earnings per share (EPS) excluding special items for the first quarter of 2008 are non-GAAP financial measures within the meaning of Regulation G of the Securities and Exchange Commission. Non-GAAP financial measures are not in accordance with, or an alternative to, generally accepted accounting principles (GAAP). The company believes presenting non-GAAP net income and EPS is helpful to analyze financial performance without the impact of unusual items that may obscure trends in the company�s underlying performance. A detailed reconciliation is provided below outlining the differences between these non-GAAP measures and the directly related GAAP measures. �

Per

Share

Income Before

Income Taxes

Net

Income

� Earnings per share (EPS) and net income, excluding special items $ 0.44 $ 463 $ 702 � Special items: Asbestos litigation (a) � 0.20 � 327 � 327 � Total EPS and net income $ 0.64 $ 790 $ 1,029 � �

(a) In the first quarter of 2008, Corning recorded a credit of $327 million (before- and after-tax) to adjust the asbestos liability from $1 billion

to $675 million, including the components of the Amended PCC Plan and the estimated liability for non-PCC asbestos claims.

�

� � CORNING INCORPORATED AND SUBSIDIARY COMPANIES

RECONCILIATION OF NON-GAAP FINANCIAL MEASURE TO GAAP FINANCIAL MEASURE

Three Months Ended December 31, 2008

(Unaudited; amounts in millions, except per share amounts)

� � � � � � � � � � � � � � Corning�s net income and earnings per share (EPS) excluding special items for the fourth quarter of 2008 are non-GAAP financial measures within the meaning of Regulation G of the Securities and Exchange Commission. Non-GAAP financial measures are not in accordance with, or an alternative to, generally accepted accounting principles (GAAP). The company believes presenting non-GAAP net income and EPS is helpful to analyze financial performance without the impact of unusual items that may obscure trends in the company�s underlying performance. A detailed reconciliation is provided below outlining the differences between these non-GAAP measures and the directly related GAAP measures. � �

Per

Share

Loss BeforeIncome Taxes

Net

Income

� Earnings per share (EPS) and net income, excluding special items $ 0.13 $ (51) $ 208 � Special items: Asbestos litigation (a) 0.02 28 28 � Restructuring, impairment, and other charges (b) (0.01) (22) (21) � Available-for-sale securities (c) (0.01) (11) (11) � Valuation allowance release (d) � 0.03 � � � 45 � Total EPS and net income $ 0.16 $ (56) $ 249 � �

(a)�

In the fourth quarter of 2008, Corning recorded a credit of $28 million (before- and after-tax) to adjust the asbestos liability for the change in value of certain components of the Amended PCC Plan and the estimated liability for non-PCC asbestos claims. �

(b)�

In the fourth quarter of 2008, Corning recorded a charge of $22 million ($21 million after-tax) comprised primarily of severance costs for a restructuring plan in the Telecommunications segment. �

(c)�

In the fourth quarter of 2008, Corning recorded a loss of $11 million (before- and after-tax) on certain available-for-sale securities included in cash and short-term investments. �

(d)�

In the fourth quarter of 2008, Corning recorded a deferred tax asset valuation allowance release of $45 million resulting from a change in our estimate of current-year U.S. taxable income. � � CORNING INCORPORATED AND SUBSIDIARY COMPANIES

RECONCILIATION OF NON-GAAP FINANCIAL MEASURE TO GAAP FINANCIAL MEASURE

Three Months Ended March 31, 2009 and December 31, 2008

(Unaudited; amounts in millions)

� � � � � � � � � Corning�s free cash flow financial measure for the three months ended March 31, 2009 and December 31, 2008 are non-GAAP financial measures within the meaning of Regulation G of the Securities and Exchange Commission. Non-GAAP financial measures are not in accordance with, or an alternative to, generally accepted accounting principles (GAAP). The company believes presenting non-GAAP financial measures are helpful to analyze financial performance without the impact of unusual items that may obscure trends in the company�s underlying performance. A detailed reconciliation is provided below outlining the differences between this non-GAAP measure and the directly related GAAP measures. � � Three Three months ended months ended

March 31, 2009

December 31, 2008 � Cash flows from operating activities $ 264 $ 380 � Less: Cash flows from investing activities (126 ) (1,138 ) � Plus: Short-term investments - acquisitions 104 567 � Less: Short-term investments - liquidations � (242 ) � (193 ) � Free cash flow $ -- � $ (384 )