As filed with the Securities and Exchange Commission on January 18, 1994
Registration No 33-51481
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 1 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
CORNING INCORPORATED
(Exact name of registrant as specified in its charter)
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NEW YORK 16-0393470
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
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One Riverfront Plaza
Corning, New York 14831
(607) 974-9000
(Address, including zip code and telephone number of Issuer's principal
executive offices)
William C. Ughetta
Corning Incorporated
One Riverfront Plaza
Corning, New York 14831
(607) 974-9000
(Name, address, including zip code and telephone number of agent for service)
Copies to:
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<CAPTION>
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Cornelius J. Dwyer, Jr. Robert W. Reeder, III
Shearman & Sterling Sullivan & Cromwell
599 Lexington Avenue 250 Park Avenue
New York, NY 10022 New York, NY 10177
(212) 848-4000 (212) 558-4000
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Approximate date of commencement of proposed sale to public: From time to
time after this Registration Statement becomes effective.
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [x]
CALCULATION OF REGISTRATION FEE
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Proposed Proposed
Maximum Maximum
Title of Each Class of Offering Aggregate Amount of
Securities to be Amount to be Price Offering Registration
Registered Registered (1) Per Share(2) Price Fee
- ------------------------- ----------------- ------------ ------------ ------------
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Common Stock ($.50 par 1,300,000
value)(3) Shares $30.6875 $39,893,750 $13,757
</TABLE>
(1) The Registrant has previously registered 6,700,000 Shares in its initial
filing with the Commission and paid the registration fee relating to such
Shares.
(2) Estimated pursuant to Rule 457(c) solely for the purpose of calculating
the registration fee on the basis of the average of the high and low prices
of the Registrant's Common Stock on the New York Stock Exchange Composite
Tape on January 13, 1994.
(3) Associated with the Common Stock are Preferred Share Purchase Rights that
will not be exercisable or evidenced separately from the Common Stock prior
to the occurrence of certain events.
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the Registration
Statement shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement
becomes effective. This prospectus shall not constitute an offer to sell or
the solicitation of an offer to buy nor shall there be any sale of these
securities in any State in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws of
any such State.SUBJECT TO COMPLETION, DATED JANUARY 18, 1994
8,000,000 Shares
CORNING INCORPORATED
Common Stock
(par value $.50 per share)
The net proceeds from the offering will be used to finance the acquisition of
certain assets constituting the optical fiber business of Northern Telecom
Limited and the purchase of the shares of capital stock of Corning Vitro
Corporation held by Vitro, S.A. See "Business--Recent Developments".
The last reported sale price of the Common Stock on the New York Stock
Exchange on January 14, 1994 was $31.125 per share. See "Market Prices of
Common Stock and Dividends".
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECU-
RITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
This Prospectus relates to an aggregate of 8,000,000 shares of Common Stock
of Corning Incorporated to be purchased from the Company by Goldman, Sachs &
Co. as the Underwriter at a price of $ per share ($ in the aggregate), less a
commission of $ per share ($ in the aggregate). The Company will pay the
expenses of the offering estimated at $280,000.
The shares may be offered by the Underwriter from time to time in one or more
transactions (which may involve block transactions) on the New York Stock
Exchange, in the over-the-counter market, through negotiated transactions or
otherwise at market prices prevailing at the time of the sale or at prices
otherwise negotiated, subject to prior sale, when, as and if delivered to and
accepted by the Underwriter. See "Underwriting".
Goldman, Sachs & Co.
The date of this Prospectus is , 1994
<PAGE>
AVAILABLE INFORMATION
The Company (as defined below) is subject to the informational requirements
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
in accordance therewith files reports, proxy statements and other information
with the Securities and Exchange Commission (the "Commission"). Such reports,
proxy statements and other information and the Registration Statement
referred to below may be inspected at the Commission's public reference
facilities, Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, as
well as the following regional offices: 7 World Trade Center, 13th floor, New
York, New York 10048, and Northwestern Atrium Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661; and copies of such materials may
be obtained from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549, at prescribed rates. In addition, such
reports, proxy statements and other information concerning the Company and
such Registration Statement may also be inspected at the offices of the New
York Stock Exchange, Inc. (the "NYSE"), 20 Broad Street, New York, New York
10005, upon which exchange certain securities of the Company are listed.
This Prospectus constitutes a part of the Registration Statement with respect
to the Offering (the "Offering") of 8,000,000 shares (the "Shares") of the
Common Stock, par value $.50 per share ("Common Stock"), of the Company filed
by the Company with the Commission under the Securities Act of 1933, as
amended (the "Securities Act"). As permitted by the rules issued by the
Commission under the Securities Act, this Prospectus omits certain of the
information contained in the Registration Statement, and reference is hereby
made to the Registration Statement and to the exhibits relating thereto for
further information with respect to the Company and the Common Stock. Any
statements contained herein concerning the provisions of any document filed
with the Commission are not necessarily complete, and each such statement is
qualified in its entirety by reference to the copy of such document filed
with the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission (File No. 1-3247) are
incorporated herein by reference:
1. The Company's Annual Report on Form 10-K for the fiscal year ended
January 3, 1993, filed pursuant to Section 13(a) of the Exchange Act.
2. All other reports filed by the Company pursuant to Section 13(a) or
15(d) of the Exchange Act since January 3, 1993, consisting of the Company's
Quarterly Reports on Form 10-Q for the twelve weeks ended March 28, 1993, the
twenty-four weeks ended June 20, 1993 and the forty weeks ended October 10,
1993; and the Company's Current Reports on Form 8-K dated January 19, 1993,
January 25, 1993, April 6, 1993, June 29, 1993, August 4, 1993, August 13,
1993, August 27, 1993, September 14, 1993, September 21, 1993 and October 19,
1993, respectively. Certain historical financial statements of Damon
Corporation ("Damon") which was acquired in 1993 are included in the
Company's Current Reports on Form 8-K dated August 4, 1993 and August 13,
1993.
3. The description of the Company's Preferred Share Purchase Rights Plan
contained in the registration statement on Form 8-A filed by the Company on
July 8, 1986, including the amendment thereto on Form 8 filed by the Company
on October 9, 1989.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of the Offering shall be deemed to be incorporated by reference
in this Prospectus and to be a part hereof from the dates of filing of such
documents.
The Company will provide without charge to each person to whom a copy of this
Prospectus is delivered, upon the written or oral request of any such person,
a copy of any or all of the documents incorporated by reference herein, other
than exhibits to such documents, unless such exhibits are specifically
incorporated by reference in such documents. Such request should be directed
to the Secretary, Corning Incorporated, One Riverfront Plaza, Corning, New
York 14831; telephone (607) 974-9000.
IN CONNECTION WITH THE OFFERING, THE UNDERWRITER MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK
AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE, IN THE
OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE
DISCONTINUED AT ANY TIME.
<PAGE>
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information and consolidated financial statements (including the notes
thereto) appearing elsewhere or incorporated by reference in this Prospectus.
Unless otherwise specified, references herein to the "Company" or "Corning"
refer to Corning Incorporated and its consolidated subsidiaries. Prospective
investors should carefully read the entire Prospectus.
The Company
Corning traces its origins to a glass business established by the Houghton
family in 1851. The present corporation was incorporated in the State of New
York in December 1936, and its name was changed from Corning Glass Works to
Corning Incorporated on April 28, 1989.
Corning is an international corporation competing in four broadly-based
business segments: Specialty Materials, Communications, Laboratory Services
and Consumer Products. Corning is engaged principally in the manufacture and
sale of products made from specialty glasses and related inorganic materials
having special properties of chemical stability, electrical resistance, heat
resistance, light transmission and mechanical strength. Corning and its
subsidiaries annually produce some 60,000 different products at 46 plants in
eight countries. In addition, Corning, through subsidiaries and affiliates,
engages in laboratory services businesses, including life and environmental
sciences and clinical-laboratory testing, at 54 facilities in ten countries.
Corning has followed and will continue to follow a consistent strategy for
its businesses:
--to provide quality products and services to the four broad market
segments in which it chooses to compete,
--to be a market leader in each of its businesses, and
--to fully utilize the talents and capabilities of all its employees.
Corning utilizes various strategies and tactics appropriate to each business
and its specific markets. However, all strategies incorporate certain key
elements.
Technology has been at the core of Corning's historical success. Corning's
investment in research and development has been significant at $131 million
in 1991 and $151 million in 1992. Research and development spending has
enabled Corning to remain at the forefront of technological advances for
decades with new and improved products. Included among Corning's important
technological discoveries over the years are optical fiber for
telecommunications, ceramic substrates for automotive and stationary emission
control devices, photosensitive glasses for various markets and mass produced
television bulbs and incandescent light bulbs. Recent developments include an
electrically heated automotive pollution control substrate, an expanded line
of optical communications amplifiers, dispersion shifted optical fiber, a
glass ceramic magnetic memory disk and active matrix liquid-crystal display
glasses.
Alliances and acquisitions are utilized to leverage Corning's technologies
and market position. Corning's extensive experience with alliances spans more
than fifty years and includes jointly owned companies with The Dow Chemical
Company ("Dow") in silicones, PPG Industries Inc. in glass block and foam
glass, the Samsung Group and Asahi Glass in television bulbs, Siemens AG
("Siemens") in opto-electronics, and more recently with Mitsubishi Heavy
Industries Ltd. in stationary emission control devices.
Corning has recently completed two major strategic acquisitions, as described
under "Recent Developments". Management believes that the acquisition of
Damon will provide operating synergies with the MetPath division ("MetPath")
of its wholly owned subsidiary, Corning Lab Services Inc. ("CLSI"). Corning
has also acquired Costar Corporation ("Costar"), which markets plastic
labware for use in the life sciences industry. Management believes that
Costar's product development capabilities, when combined with Corning's
manufacturing capabilities, will provide innovative and high quality products
to this growing industry.
<PAGE>
Quality is an important element of all of Corning's business strategies. This
embodies an unwavering focus on satisfying the customer, continuous
improvement of the processes which deliver products and services to the
customer and creating an empowered workforce dedicated to serving the
customer.
Recent Developments
Acquisition of NTL Assets
On December 14, 1993, Northern Telecom Limited ("NTL"), Siecor Corporation
("Siecor"), a consolidated corporation which manufactures and sells optical
cable, owned 50% by each of Siemens and the Company, and the Company reached
an agreement whereby the Company would purchase the net assets constituting
NTL's optical fiber business for $87 million in cash and Siecor would
purchase the net assets constituting NTL's optical cable business in
Saskatoon, Saskatchewan (referred to herein as the "optical cable business")
for $43 million in cash. Corning will finance the acquisition of NTL's
optical fiber business and a $25 million capital contribution to Siecor with
a portion of the proceeds of the Offering. Siecor will finance the
acquisition of NTL's optical cable business with a capital contribution from
Siemens and the Company. Closing of both transactions is expected to occur
during the first quarter of 1994. See "Use of Proceeds".
Vitro Transaction
On December 14, 1993, Vitro, S.A. ("Vitro") and the Company reached an
agreement in principle whereby, in two separate transactions, Vitro purchased
in December 1993 the shares of capital stock of Vitro Corning, S.A. de C.V.
("Vitro Corning") owned by the Company and the Company will purchase in early
1994 the shares of capital stock of Corning Vitro Corporation ("Corning
Vitro") owned by Vitro. The net cost to Corning of the two transactions will
be $131 million. Corning and Vitro will continue their consumer products
alliance through cross distribution and supply agreements. Corning will
finance the payment to Vitro with a portion of the proceeds of the Offering.
See "Use of Proceeds".
Acquisition of Damon
On August 4, 1993, Corning, through a wholly owned subsidiary, acquired all
outstanding shares of common stock of Damon for approximately $405 million,
including acquisition expenses. Damon operates laboratories which provide the
medical profession with a full range of routine and esoteric testing services
similar to those provided by MetPath. Corning has financed the acquisition of
Damon and the refinancing of approximately $167 million of Damon's debt under
financing agreements entered into with certain commercial banks.
Approximately $200 million of such financing has been retired with proceeds
from the issuance of long-term debt of the Company. In January 1994, Corning
extended the terms of such financing agreements to December 31, 1995. Corning
intends to retire a significant portion of the remaining acquisition debt
with the proceeds of an offering of equity securities during 1994. See
"Business--Recent Developments--Acquisition of Damon".
Acquisition of Costar
On September 8, 1993, Corning acquired Costar for approximately 5.5 million
shares of Corning Common Stock and options to purchase approximately 300,000
shares of Corning Common Stock. Costar is a manufacturer of a broad line of
innovative and high quality disposable plastic, filtration and other products
used by life science laboratories throughout the world. See "Business--Recent
Developments--Acquisition of Costar".
Restructuring and Other Special Charges in Third Quarter of 1993
In the third quarter of 1993, Corning recorded restructuring and other
special charges totalling $130 million aftertax. These charges included the
following:
MetPath Settlement
In September 1993, MetPath reached a compromise agreement with the Civil
Division of the Department of Justice ("DOJ") to settle claims brought on
behalf of the Inspector General, U.S. Department of Health and Human Services
(the "Inspector General"). The claims related to the marketing, sale, pricing
and billing of certain blood test series provided to Medicare patients.
MetPath recorded a charge of $36.5 million ($22.0 million after tax) to
reflect the settlement and related legal expenses during the third quarter
1993. The settlement does not constitute an admission by MetPath with respect
to any issue arising from the civil action.
Restructuring Charge
During the third quarter 1993, Corning recorded charges of $170.5 million
($98.5 million after tax of $64.6 million and minority interest of $7.4
million) as a result of costs to integrate the Damon and Costar
<PAGE>
acquisitions and as a result of a planned company-wide restructuring program
announced October 6, 1993, to reduce overhead costs during the next 12 to 14
months. Corning also recognized a $9.5 million reduction in equity earnings
as a result of a restructuring charge taken by Vitro Corning.
Dismissal from Federal Implant Cases
In December 1993, the Company was dismissed by the United States District
Court for the Northern District of Alabama from the more than 3,000
consolidated cases pending in federal courts nationwide which allege personal
injuries due to silicone-gel breast implants. The decision by the District
Court is non-appealable and, although the District Court noted that it was
"highly unlikely" that additional discovery would produce new evidence, the
decision is subject to reconsideration if additional information is
discovered or if there is a change in state law. The Company remains a
defendant in related lawsuits filed in various state courts. Dow Corning
Corporation ("Dow Corning"), a corporation owned 50% by each of Dow and the
Company, remains a defendant in both the federal and state litigation. The
implant products were manufactured or supplied by Dow Corning or a Dow
Corning subsidiary. See "Business--Recent Developments--Breast Implant
Litigation".
Dow Corning Charge in Fourth Quarter of 1993.
On January 14, 1994, Corning announced that as a result of Dow Corning's
announcement on that date that it would take a charge against Dow Corning's
1993 fourth quarter earnings of $640 million pre-tax ($415 million after-tax)
to reflect Dow Corning's estimate, as of that date, of the net present value
of its ultimate exposure in the pending breast implant litigation, Corning
would take a charge of $203 million after-tax against its equity in earnings
of associated companies for the fourth quarter of 1993 and against the
carrying value of its investment in Dow Corning at the end of fiscal 1993.
See "Business--Recent Developments--Breast Implant Litigation--Charges
Announced by Dow Corning and by Corning on January 14, 1994".
Reorganization of Laboratory Services
In December 1993, Corning contributed its ownership interest in CLSI to
Damon, the name of which was changed to Corning Lab Services Inc. on December
31, 1993. Also on December 31, 1993 CLSI's name was changed to MetPath Inc.
None of the references to CLSI, Damon or MetPath in this Prospectus have been
changed to reflect such organizational structure or name change.
The Offering
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Common Stock Offered 8,000,000 shares
Common Stock to be outstanding after the Offering(a) 208,491,721 shares
Use of Proceeds The Company intends to use the net
proceeds of the Offering to
finance the acquisition of the
optical fiber business from NTL
and the shares of capital stock of
Corning Vitro held by Vitro
NYSE symbol GLW
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(a) Amount is pro forma for the Offering based on the number of shares
outstanding as of January 2, 1994. Amount does not include, as of January 2,
1994, 12,461,581 shares of Common Stock which were issuable upon exercise of
stock options granted pursuant to Corning's employee stock option plans,
3,169,368 shares of which were issuable pursuant to options exercisable on
such date, 1,047,248 shares of Common Stock reserved for issuance pursuant to
conversion of outstanding shares of Series B Preferred Stock (as defined
herein), or 700,064 shares of Common Stock issuable upon the conversion of
the 6-1/2% Convertible Subordinated Debentures due May 2006 of Hazleton
Corporation ("Hazleton") which was acquired by the Company in 1987.
Summary Financial Information
The following is a summary of certain consolidated financial information that
has been derived from the consolidated financial statements of the Company.
The summary financial data set forth below for the Company for the 1988
through 1992 fiscal years are derived from its audited financial statements.
The summary financial data set forth below for the first forty weeks of 1993
and 1992 are derived from the Company's unaudited financial statements, which
in the opinion of management contain all adjustments
<PAGE>
(consisting only of normal recurring items) necessary for the fair
presentation of this information. The financial data should be read in
conjunction with the information set forth in "Selected Consolidated
Financial Data" and "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and the historical financial information
and related notes incorporated by reference in this Prospectus.
The unaudited pro forma combined financial information set forth below
reflects the estimated impact on Corning's financial statements of the
acquisition of Damon, the acquisition of Costar, the pending NTL and Vitro
transactions (the "Pending Transactions"), and several other completed
transactions (collectively, the "Transactions"). Such pro forma data assume
the Transactions and the Offering had been completed on December 30, 1991,
for income statement data and by October 10, 1993, for balance sheet data.
The unaudited pro forma combined financial information set forth below is
derived from, and should be read in conjunction with, the unaudited pro forma
combined financial information included elsewhere in the Prospectus and the
historical financial statements of Corning and Damon incorporated by
reference into this Prospectus. The following pro forma financial information
is presented for informational purposes only, and is not necessarily
indicative of the results that would have occurred had the transactions been
completed on the dates indicated or the results that may be attained in the
future.
See "Selected Consolidated Financial Data", "Unaudited Pro Forma Combined
Financial Information", "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and "Incorporation of Certain Documents
by Reference".
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Forty
Weeks Ended Fiscal Year Ended
--------------------- -----------------------------------------------------
October October Dec. Dec. Dec.
10, 4, Jan. 3, 29, 30, 31, Jan. 1,
1993 1992 1993 1991 1990 1989 1989
--------- -------- ------- ------- ------- ------- ---------
(dollars in millions, except per share amounts)
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HISTORICAL:
Income Statement Data:
Net sales $2,921.8 $2,712.5 $3,708.7 $3,259.2 $2,940.5 $2,439.2 $2,121.5
Income before extraordinary credit
and cumulative effect of changes in
accounting methods(a) 105.7 231.7 266.3 311.2 289.1 259.4 292.4
Net income (loss)(a) 105.7 (53.8) (12.6) 316.8 292.0 261.0 210.7
Balance Sheet Data:
Total assets $5,419.5 $4,333.1 $4,286.3 $3,852.6 $3,512.0 $3,360.7 $2,897.9
Working capital 210.1 640.2 465.2 521.0 458.4 487.3 421.1
Loans payable beyond one year 1,208.2 853.5 815.7 700.0 611.2 624.5 499.0
Common stockholders' equity 1,844.4 1,909.6 1,803.8 2,018.8 1,850.3 1,711.2 1,560.7
Per Common Share Data:
Income before extraordinary credit
and cumulative effect of changes in
accounting methods(a) $ 0.55 $ 1.22 $ 1.40 $ 1.66 $ 1.53 $ 1.39 $ 1.63
Net income (loss)(a) 0.55 (0.29) (0.08) 1.69 1.55 1.40 1.17
Common dividends declared(b) 0.51 0.45 0.62 0.68 0.46 0.53 0.48
PRO FORMA: (c)
Income Statement Data:
Net sales $3,320.7 $4,318.2
Income before extraordinary credit
and cumulative effect of changes in
accounting methods 142.2 273.6
Income per share before extraordinary
credit and cumulative effect of
changes in accounting methods $ 0.69 $ 1.34
Balance Sheet Data:
Total assets $5,698.0
Working capital 209.0
Loans payable beyond one year 1,278.2
Common stockholders' equity 2,090.2
(a) Amounts for all periods are significantly impacted by certain non-recurring gains and losses and the
cumulative effect of changes in accounting methods. See the Notes to Selected Consolidated Financial Data
contained elsewhere in this Prospectus.
(b) Includes special dividends of $0.15, $0.1125 and $0.10 per common share in 1991, 1989 and 1988,
respectively.
(c) See the Notes to Pro Forma Financial Information contained elsewhere in this Prospectus.
</TABLE>
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USE OF PROCEEDS
The net proceeds from the sale of the Common Stock in the Offering are
estimated to be approximately $238.7 million. The Company intends to use all
of the net proceeds to acquire NTL's optical fiber business, make a related
capital contribution to Siecor and acquire the shares of capital stock of
Corning Vitro held by Vitro. For information concerning such transactions,
see "Prospectus Summary--Recent Developments" and "Business--Recent
Developments--Acquisition of NTL Assets" and "--Vitro Transaction". In
the event such transactions, or either of them, do not occur, the Company
intends to use the net proceeds to retire a portion of the remaining debt
incurred in connection with the Damon acquisition, which debt bears a
variable interest rate based on the London Interbank Offered Rate and
matures on December 31, 1995. The Company intends to issue additional equity
securities in 1994 in order to retire a significant portion of the remaining
Damon acquisition debt. See "Prospectus Summary--Recent
Developments--Acquisition of Damon" and "Business--Recent
Developments--Acquisition of Damon."
CAPITALIZATION
The following table sets forth (i) the actual capitalization of the Company
at October 10, 1993, and (ii) the pro forma capitalization of the Company as
of such date after giving effect to the Offering and the Transactions. The
table should be read in conjunction with the financial statements of the
Company incorporated by reference in this Prospectus. See "Use of Proceeds",
"Selected Consolidated Financial Data", "Unaudited Pro Forma Combined
Financial Information", "Management's Discussion and Analysis of Financial
Condition and Results of Operations", and "Description of Capital Stock".
<TABLE>
<CAPTION>
October 10, 1993
--------------------
Actual Pro Forma
------ ----------
(dollars in
millions, except per
share data)
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Short-Term Debt:
Total short-term debt $ 609.8 $ 601.6
---- --------
Long-Term Debt:
Total long-term debt 1,208.2 1,278.2
---- --------
Convertible Preferred Stock:
Par value $100 per share: 10,000,000 shares
authorized; 259,211 shares of 8% Series B
Preferred Stock outstanding 25.9 25.9
---- --------
Common Stockholders' Equity:
Common Stock, including excess over par value
and other capital: par value $0.50 per share;
authorized 500,000,000 shares; 227,442,030
issued at October 10, 1993 618.9 857.6
Retained earnings 1,737.4 1,737.4
Less cost of 27,402,362 shares of common stock
in treasury (516.7) (516.7)
Cumulative translation adjustment 4.8 11.9
---- --------
Total common stockholders' equity 1,844.4 2,090.2
---- --------
Total capitalization $3,688.3 $3,995.9
==== ========
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<PAGE>
MARKET PRICES OF COMMON STOCK AND DIVIDENDS
The Common Stock is traded on the NYSE under the symbol "GLW". At January 2,
1994, there were 18,953 holders of record of the Common Stock and 200,491,721
shares outstanding. The following table sets forth the high and low sale
prices for the Common Stock, as reported by the NYSE, and the cash dividends
declared per share on the Common Stock, for the periods indicated.
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Price Range(a)
----------------
Cash Dividends
Declared Per
High Low Share(a)
----- ------- --------------
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1991
First Quarter 31.000 21.063 .125
Second Quarter 31.750 28.375 .125
Third Quarter 35.750 31.250 .125
Fourth Quarter 43.125 33.563 .300(b)
1992
First Quarter 40.313 28.750 .15
Second Quarter 38.625 31.500 .15
Third Quarter 38.625 34.375 .15
Fourth Quarter 39.750 34.750 .17
1993
First Quarter 39.000 29.000 .17
Second Quarter 35.875 31.500 .17
Third Quarter 35.125 26.875 .17
Fourth Quarter 28.250 24.000 .17
1994
First Quarter (through January 14, 1994) 31.625 28.250
(a) Per share amounts have been adjusted for the 2-for-1 stock split effective January 13, 1992.
(b) Includes a special dividend of $0.15 per common share in the fourth quarter of 1991.
</TABLE>
The Company has regularly paid cash dividends since 1881 and expects to
continue to pay cash dividends. The Company's quarterly cash dividend is
currently $.17 per share of Common Stock. The payment of dividends is subject
to the preferential dividend rights of any outstanding Series Preferred Stock
(as defined herein). Since the declaration and payment of future dividends
will be based on a number of factors considered by the Company's Board of
Directors, including current and prospective earnings, financial condition
and capital requirements, and such other factors as the Board of Directors
may deem relevant, there can be no assurance that dividends will be paid in
the future. See "Description of Capital Stock".
SELECTED CONSOLIDATED FINANCIAL DATA
The following is a summary of certain consolidated financial information that
has been derived from the consolidated financial statements of the Company.
The summary financial data set forth below for the Company for the fiscal
years 1988 through 1992 are derived from its audited financial statements.
The selected consolidated financial data set forth below for the first forty
weeks of 1993 and 1992 are derived from the Company's unaudited financial
statements, which in the opinion of management contain all adjustments
(consisting only of normal recurring items) necessary for the fair
presentation of this information. The financial data should be read in
conjunction with the information set forth in "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and the historical
financial information and related notes incorporated by reference in this
Prospectus. See "Incorporation of Certain Documents by Reference".
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA
<TABLE>
<CAPTION>
Forty
Weeks Ended Fiscal Year Ended
------------------- -----------------------------------------------------------
Oct. Dec. Dec.
10, Oct. 4, Jan. 3, 29, 30, Dec. 31, Jan. 1,
1993 1992 1993 1991 1990 1989 1989
------ --------- --------- ------- ------- --------- -----------
(dollars in millions, except per share amounts)
<S> <C> <C> <C> <C> <C> <C> <C>
Income Statement Data:
Revenues
Net sales $2,921.8 $2,712.5 $3,708.7 $3,259.2 $2,940.5 $2,439.2 $2,121.5
Royalty, interest and dividend
income 21.8 28.4 35.3 27.6 39.9 29.6 30.8
Non-operating gains 4.2 7.0 7.0 8.1 69.2 107.1 149.2
---- ------- ------- ----- ----- ------- ---------
2,947.8 2,747.9 3,751.0 3,294.9 3,049.6 2,575.9 2,301.5
Deductions
Cost of sales 1,889.5 1,773.2 2,411.3 2,121.6 1,925.7 1,600.9 1,405.2
Selling, general and administrative
expenses 564.8 507.0 692.2 622.5 581.8 491.8 438.6
Research and development expenses 128.9 108.9 151.1 130.7 124.5 109.6 95.2
Provision for restructuring costs
and
other special charges 207.0 63.3 54.4 32.0
Interest expense 63.9 45.9 62.6 58.1 54.0 44.5 41.0
Other, net 21.4 16.7 33.9 34.6 35.5 20.9 18.9
---- ------- ------- ----- ----- ------- ---------
Income before taxes on income 72.3 296.2 336.6 327.4 328.1 253.8 270.6
Taxes on income 13.5 86.0 92.5 110.6 136.1 116.9 103.2
---- ------- ------- ----- ----- ------- ---------
Income before minority interest and
equity earnings 58.8 210.2 244.1 216.8 192.0 136.9 167.4
Minority interest in earnings of
subsidiaries (9.5) (16.7) (21.6) (17.3) (10.4) (4.2) (2.2)
Equity in earnings of associated
companies before cumulative
effect of changes in accounting
methods 56.4 38.2 43.8 111.7 107.5 126.7 127.2
---- ------- ------- ----- ----- ------- ---------
Income before Extraordinary Credit
and Cumulative Effect of Changes
in Accounting Methods 105.7(a) 231.7(b) 266.3(d) 311.2(e) 289.1(f) 259.4(g,j) 292.4(h,j)
Tax benefit of loss carryforwards 1.1 7.7 5.6 2.9 1.6 2.2
Cumulative effect of changes in
accounting methods (286.6) (286.6) (83.9)
---- ------- ------- ----- ----- ------- ---------
Net Income (Loss) $ 105.7 $ (53.8)(c) $ (12.6)(c) $ 316.8 $ 292.0 $ 261.0 $ 210.7(i)
==== ======= ======= ===== ===== ======= =========
Balance Sheet Data:
Total assets $5,419.5 $4,333.1 $4,286.3 $3,852.6 $3,512.0 $3,360.7 $2,897.9
Working capital 210.1 640.2 465.2 521.0 458.4 487.3 421.1
Loans payable beyond one year 1,208.2 853.5 815.7 700.0 611.2 624.5 499.0
Common stockholders' equity 1,844.4 1,909.6 1,803.8 2,018.8 1,850.3 1,711.2 1,560.7
Per Common Share Data:(k)
Income before extraordinary credit
and cumulative effect of changes
in accounting methods $ 0.55 $ 1.22 $ 1.40 $ 1.66 $ 1.53 $ 1.39 $ 1.63
Net income (loss) 0.55 (0.29) (0.08) 1.69 1.55 1.40 1.17
Common dividends declared(l) 0.51 0.45 0.62 0.68 0.46 0.53 0.48
The accompanying notes are an integral part of these statements.
<PAGE>
(a) During the first forty weeks of 1993, Corning recognized net non-recurring losses from consolidated
operations totaling $202.8 ($117.9 after-tax and minority interest) including a non-operating gain totaling
$4.2 million ($2.6 million after-tax); a charge of $36.5 million ($22.0 million after-tax) to reflect the
settlement and related legal expenses incurred in the compromise agreement with the Civil Division of the DOJ
concerning the marketing, sale, pricing, and billing of certain laboratory tests; and a restructuring charge
totaling $170.5 million ($98.5 million after-tax and minority interest) as a result of costs to integrate the
Damon and Costar acquisitions and as a result of a planned company-wide restructuring program announced October
6, 1993, to reduce overhead costs during the next 12 to 14 months.
During the first forty weeks of 1993, Corning recognized a reduction in equity earnings of $9.5 million
resulting from a restructuring charge taken by Vitro Corning.
Effective January 4, 1993, Corning and its subsidiaries adopted Financial Accounting Standard No. 109,
"Accounting for Income Taxes" ("FAS 109") and Financial Accounting Standard No. 112, "Employers' Accounting for
Postemployment Benefits" ("FAS 112"). The impact of adopting FAS 109 and FAS 112 was not material to the first
forty weeks of 1993.
(b) During the first forty weeks of 1992, Corning recognized net non-operating gains from consolidated
operations totaling $7.0 million ($21.7 million after-tax), including a gain of $10.1 million (before- and
after-tax) from the sale of an additional equity interest in Corning Japan K.K. ("Corning Japan") and a pre-tax
loss of $7.3 million ($9.0 million after-tax gain) from the completion of the consumer housewares venture with
Vitro.
During the first forty weeks of 1992, Corning recognized a $24.5 million reduction in equity earnings
associated with Dow Corning's terminated breast implant products business.
(c) Effective December 30, 1991, Corning and its subsidiaries adopted Financial Accounting Standard No. 106,
"Employers' Accounting for Postretirement Benefits Other than Pensions" ("FAS 106"). In the third quarter
year-to-date 1992, the cumulative effect of adopting FAS 106 resulted in a charge of $294.8 million (after-tax
and minority interest), or $1.56 per share. In addition, an $8.2 million gain, or $0.04 per share, from an
equity company's adoption of FAS 109 was recognized in the third quarter year-to-date 1992.
(d) In 1992, Corning recognized net non-operating gains from consolidated operations totaling $7.0 million
($21.7 million after- tax), including a gain of $10.1 million (before- and after-tax) from the sale of an
additional equity interest in Corning Japan and a pre-tax loss of $7.3 million ($9.0 million after-tax gain)
from the formation of the consumer housewares venture with Vitro. Corning also recorded a provision of $63.3
million ($32.1 million after-tax of $22.9 million and minority interest of $8.3 million) as a result of Corning
Vitro's decision to restructure its Brazilian operations.
Corning also recognized a $37.7 million reduction in equity earnings which included $24.5 million of costs
associated with Dow Corning's terminated breast implant business and $13.2 million of restructuring charges
associated with Dow Corning's exit from its Brazilian operations and other cost-reduction programs.
(e) In 1991, the Company recognized net non-operating gains from consolidated operations totaling $8.1 million
($14.6 million after-tax) which included a gain of $5.3 million (before- and after-tax) on the sale of a less
than 10% equity interest in Corning Japan. The Company also recognized an $8.2 million reduction in equity
earnings to reflect a charge recorded by Dow Corning for costs associated with its breast implant business.
(f) In 1990, the Company recognized non-operating gains totaling $69.2 million ($29.2 million after-tax) on the
sales of certain investments, including a gain on the sale of substantially all the Company's investment in
Iwaki Glass Company Ltd. ("Iwaki") totaling $51.1 million ($19.4 million after-tax).
(g) In 1989, the Company recognized non-operating gains totaling $107.1 million ($61.9 million after-tax),
including a gain on the sale of its 50% interest in Ciba Corning Diagnostics Corp. of $75.7 million ($41.0
million after-tax) and a gain of $21.7 million ($13.7 million after-tax) related to patent infringement matters
in the optical-fiber business.
(h) In 1988, Corning recognized non-operating gains totaling $149.2 million ($96.8 million after-tax),
including a gain of $22.2 million (before- and after-tax) on the sales of previously unissued stock of equity
affiliates (of this amount, $21.5 million related to the initial public offering in Japan of Iwaki stock); a
gain of $60.3 million ($36.6 million after-tax) on the sale of five million shares of Iwaki stock; a gain of
$18.4 million ($6.1 million after-tax) related to the formation of Corning Asahi Video Products Company
("Corning Asahi Video"); a gain of $18.3 million ($12.1 million after-tax) on the sale of its investment in
Corning Japan Inc.; and a gain of $30.0 million ($19.8 million after-tax) on the sale of three million shares
of International Clinical Laboratories Inc. stock.
(i) In 1988, the Company changed its method of accounting for postretirement health-care benefits. The
cumulative effect of this change on prior years decreased net income by $83.9 million ($0.47 per common share)
in 1988. Except for the cumulative effect, this change did not have a material effect on net income for the
year presented.
(j) In 1989, the Company provided $54.4 million ($45.0 million after-tax) for the repositioning of certain
businesses and facilities. The provision related primarily to consumer product operations worldwide, and to
certain other operations in Europe. In 1988, Corning provided $32.0 million ($19.1 million after-tax) to revise
estimates of previously established restructuring reserves related to consolidating and repositioning certain
manufacturing operations.
(k) Per share amounts have been adjusted for the 2-for-1 stock split effective January 13, 1992.
(l) Includes special dividends of $0.15, $0.1125 and $0.10 per common share in 1991, 1989 and 1988,
respectively.
</TABLE>
<PAGE>
CORNING UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
The Unaudited Pro Forma Combined Financial Information (the "Pro Forma
Information") is presented to reflect the estimated impact on Corning's
Financial Statements of the following proposed or completed transactions
(collectively, the "Transactions"):
* The acquisition of Damon in August 1993, at a total purchase price of
approximately $405 million, including acquisition expenses. The transaction
has been accounted for as a purchase.
* The merger with Costar in September 1993 in which Corning acquired all of
the outstanding shares of common stock and options to purchase common stock
of Costar for approximately 5.5 million shares of Corning Common Stock and
options to purchase approximately 300,000 shares of Corning Common Stock.
This acquisition has been accounted for as a pooling of interests. Corning's
consolidated financial statements for periods prior to the acquisition have
not been restated since the acquisition is not material to Corning's
financial position or results of operations.
* The proposed acquisition of the optical fiber and optical cable business of
NTL by Corning and Siecor for $130 million in cash and the proposed Vitro
transaction (collectively, the "Pending Transactions.") The NTL transaction
will be accounted for as a purchase. The Vitro transaction is described in
Note 4.
* The transaction with Unilab Corporation ("Unilab"),which was completed in
November 1993, and other completed acquisitions (collectively, the "Other
Completed Transactions") which individually and in the aggregate are not
significant. The Unilab transaction is described in Note 5.
* The issuance of 8.0 million shares of Corning Common Stock in the Offering
and the use of the net proceeds from the Offering to retire a portion of the
short-term debt incurred in connection with the Pending Transactions.
The Unaudited Pro Forma Combined Statements of Income for the year ended
January 3, 1993, and the forty weeks ended October 10, 1993, assume that the
Transactions had been completed on December 30, 1991. The Unaudited Pro Forma
Combined Balance Sheet at October 10, 1993, assumes that the Transactions had
been completed by that date.
The Pro Forma Information gives effect only to the adjustments set forth in
the accompanying notes and does not reflect any synergies anticipated by
Corning management as a result of these acquisitions. The Pro Forma
Information is not necessarily indicative of the results of operations or
financial position which would have been achieved had the Transactions been
completed as of the beginning of the earliest period presented, nor is it
necessarily indicative of Corning's future results of operations or financial
position.
The Pro Forma Information should be read in conjunction with the historical
financial statements of Corning and Damon incorporated by reference into this
Prospectus.
<PAGE>
Corning
Unaudited Pro Forma Combined Statement of Income
Year Ended January 3, 1993
(in millions, except per share amounts)
<TABLE>
<CAPTION>
Pro Forma
---------------------------------------------
Other
Pending Completed As
Corning Damon Costar Transactions Transactions Adjustments Combined Adjustments Adjusted
(1) (2) (3) (4) (5) (6) (7) (8) (9)
--------- ------- -------- ------------- -------------- ------------- --------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues
Net sales $3,708.7 $317.0 $74.9 $77.4 $140.2 $4,318.2 $4,318.2
Royalty, interest and
dividend income 35.3 35.3 35.3
Non-operating gains 7.0 $ 7.3(a) 14.3 14.3
-------- ------ ------- ------------ ------------- ------------ -------- ----------- ---------
3,751.0 317.0 74.9 77.4 140.2 7.3 4,367.8 4,367.8
Deductions
Cost of sales 2,411.3 203.1 39.8 59.4 109.6 16.6(b) 2,839.8 2,839.8
Selling, general and
administrative expenses 692.2 76.9 21.8 4.2 20.6 815.7 815.7
Research and development
expenses 151.1 3.0 1.8 155.9 155.9
Provision for
restructuring costs and
other special charges 63.3 63.3 63.3
Interest expense 62.6 10.2 0.7 3.8 31.7(d) 109.0 $ (8.4)(o) 100.6
Other, net 33.9 (0.7) (0.1) 3.4 36.5 36.5
-------- ------ ------- ------------ ------------- ------------ -------- ----------- ---------
Income before taxes on
income 336.6 27.5 9.7 12.0 2.8 (41.0) 347.6 8.4 356.0
Taxes on income 92.5 5.6 3.6 4.0 0.9 4.5(f) 111.1 2.8(p) 113.9
-------- ------ ------- ------------ ------------- ------------ -------- ----------- ---------
Income before minority
interest and equity
earnings 244.1 21.9 6.1 8.0 1.9 (45.5) 236.5 5.6 242.1
Minority interest in
earnings of subsidiaries (21.6) (3.9) (3.3) 1.6(g) (27.2) (27.2)
Equity in earnings of
associated companies
before cumulative effect
of changes in accounting
methods 43.8 6.3 8.6 58.7 58.7
-------- ------ ------- ------------ ------------- ------------ -------- ----------- ---------
Income Before
Extraordinary Credit and
Cumulative Effect of
Changes in Accounting
Methods $ 266.3 $ 18.0 $ 6.1 $11.0 $ 10.5 $(43.9) $ 268.0 $ 5.6 $ 273.6
======== ====== ======= ============ ============= ============ ======== =========== =========
Weighted Average Shares
Outstanding 188.589 5.500(h) 194.089 8.000(q) 202.089
======== ============ ======== =========== =========
Per Common Share
Income Before
Extraordinary Credit and
Cumulative Effect of
Changes in Accounting
Methods $ 1.40 $ 1.37 $ 1.34
======== ============ ======== =========== =========
(1) Represents the historical results of operations of the Company for the year ended January 3, 1993.
(2) Represents the historical results of operations of Damon for the year ended December 31, 1992.
(3) Represents the historical results of operations of Costar for the year ended December 31, 1992.
(4) Represents the historical results of operations of the business to be acquired in the NTL transaction and
the impact of the Vitro transaction for the year ended December 31, 1992 and January 3, 1993, respectively.
(5) Represents the historical results of operations of Other Completed Transactions and the impact of the
Unilab transaction for the year ended December 31, 1992.
(6) See Note 2 to the Pro Forma Information--Statement of Income.
(7) Reflects the results of operations of the Company on a pro forma basis assuming the Transactions had been
completed on December 30, 1991.
(8) See Note 2 to the Pro Forma Information--Adjustments to Reflect the Offering.
(9) Reflects the results of operations of the Company on a pro forma basis assuming the Transactions and the
Offering had been completed on December 30, 1991.
</TABLE>
<PAGE>
Corning
Unaudited Pro Forma Combined Statement of Income
Forty Weeks Ended October 10, 1993
(in millions, except per share amounts)
<TABLE>
<CAPTION>
Pro Forma
---------------------------------------------
Other
Pending Completed As
Corning Damon Costar Transactions Transactions Adjustments Combined Adjustments Adjusted
(1) (2) (3) (4) (5) (6) (7) (8) (9)
--------- ------- -------- ------------- -------------- ------------- --------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues
Net sales $2,921.8 $199.9 $52.9 $ 52.9 $93.2 $3,320.7 $3,320.7
Royalty, interest and
dividend income 21.8 21.8 21.8
Non-operating gains 4.2 4.2 4.2
-------- ------ ------- ------------ ------------- ------------ -------- ----------- ---------
2,947.8 199.9 52.9 52.9 93.2 3,346.7 3.346.7
Deductions
Cost of sales 1,889.5 129.4 29.2 44.6 76.2 $ 12.3(b) 2,181.2 2,181.2
Selling, general and
administrative expenses 564.8 58.1 14.9 4.7 8.2 650.7 650.7
Research and development
expenses 128.9 2.2 1.3 132.4 132.4
Provision for
restructuring costs and
other special charges 207.0 (55.0)(c) 152.0 152.0
Interest expense 63.9 5.6 0.4 3.2 20.6 (d) 93.7 $ (6.4)(o) 87.3
Other, net 21.4 1.0 0.7 (0.1) (1.0)(e) 22.0 22.0
-------- ------ ------- ------------ ------------- ------------ -------- ----------- ---------
Income before taxes on
income 72.3 5.8 5.5 2.3 5.7 23.1 114.7 6.4 121.1
Taxes on income 13.5 2.1 1.7 0.8 2.1 12.2(f) 32.4 2.2(p) 34.6
-------- ------ ------- ------------ ------------- ------------ -------- ----------- ---------
Income before minority
interest and equity
earnings 58.8 3.7 3.8 1.5 3.6 10.9 82.3 4.2 86.5
Minority interest in
earnings of subsidiaries (9.5) (2.2) (11.8) 0.7(g) (22.8) (22.8)
Equity in earnings of
associated companies
before cumulative effect
of changes in accounting
methods 56.4 22.1 78.5 78.5
-------- ------ ------- ------------ ------------- ------------ -------- ----------- ---------
Income Before
Extraordinary Credit and
Cumulative Effect of
Changes in Accounting
Methods $ 105.7 $ 1.5 $ 3.8 $ 11.8 $ 3.6 $ 11.6 $ 138.0 $ 4.2 $ 142.2
======== ====== ======= ============ ============= ============ ======== =========== =========
Weighted Average Shares
Outstanding 190.562 4.950(h) 195.512 8.000(q) 203.512
======== ============ ======== =========== =========
Per Common Share
Income Before
Extraordinary Credit and
Cumulative Effect of
Changes in Accounting
Methods $ 0.55 $ 0.70 $ 0.69
======== ============ ======== =========== =========
(1) Represents the historical results of operations of the Company for the forty weeks ended October 10, 1993.
(2) Represents the historical results of operations of Damon for the seven months ended July 31, 1993.
(3) Represents the historical results of operations of Costar for the eight months ended August 31, 1993.
(4) Represents the historical results of operations of the business to be acquired in the NTL transaction for
the nine months ended September 30, 1993 and the impact of the Vitro transaction for the forty weeks ending
October 10, 1993.
(5) Represents the historical results of operations of Other Completed Transactions through the acquisition
date and the impact of the Unilab transaction for the nine months ended September 30, 1993.
(6) See Note 2 to the Pro Forma Information--Statement of Income.
(7) Reflects the results of operations of the Company on a pro forma basis assuming the Transactions had been
completed on December 30, 1991.
(8) See Note 2 to the Pro Forma Information--Adjustments to Reflect the Offering.
(9) Reflects the results of operations of the Company on a pro forma basis assuming the Transactions and the
Offering had been completed on December 30, 1991.
</TABLE>
<PAGE>
Corning
Unaudited Pro Forma Combined Consolidated Balance Sheets
October 10, 1993
(in millions, except per share amounts)
<TABLE>
<CAPTION>
Pro Forma
---------------------------------------------------------
Other
Pending Completed
Corning Transactions Transactions Adjustments Combined Adjustments As
(1) (2) (3) (4) (5) (6) Adjusted
(7)
---------- ------------- ------------- -------------- ----------- -------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Assets
Current Assets
Cash and short-term
Investments $ 121.2 $ 5.4 $ 126.6 $ 126.6
Receivables, net 793.6 $ 6.8 12.4 812.8 812.8
Inventories 415.7 7.5 0.8 424.0 424.0
Deferred taxes on income
and other current assets 275.8 (0.1) 275.7 275.7
--------- ------------ ------------ ------------- ---------- ------------- ----------
Total current assets 1,606.3 14.3 18.5 1,639.1 1,639.1
Investments 1,009.5 (42.6) (105.7) 861.2 861.2
Plant and Equipment, net 1,702.4 17.1 (18.7) 1,700.8 1,700.8
Goodwill and Intangible
Assets, net 801.0 203.3 $180.1(i) 1,184.4 1,184.4
Other Assets 300.3 0.2 12.0(j) 312.5 312.5
--------- ------------ ------------ ------------- ---------- ------------- ----------
$5,419.5 $(11.2) $ 97.6 $192.1 $5,698.0 $5,698.0
========= ============ ============ ============= ========== ============= ==========
Liabilities and
Stockholders' Equity
Current Liabilities
Loans payable $ 609.8 $ $ (5.5) $236.0(k) $ 840.3 $(238.7)(q) $ 601.6
Accounts payable 166.7 7.2 2.5 176.4 176.4
Other accrued liabilities 619.7 22.4 10.0(l) 652.1 652.1
--------- ------------ ------------ ------------- ---------- ------------- ----------
Total current liabilities 1,396.2 7.2 19.4 246.0 1,668.8 (238.7) 1,430.1
Other Liabilities 702.0 1.1 703.1 703.1
Loans Payable Beyond One
Year 1,208.2 70.0 1,278.2 1,278.2
Minority Interest in
Subsidiary Companies 242.8 (97.3) 25.0(m) 170.5 170.5
Convertible Preferred Stock 25.9 25.9 25.9
Common Stockholders' Equity 1,844.4 78.9 7.1 (78.9)(n) 1,851.5 238.7(q) 2,090.2
--------- ------------ ------------ ------------- ---------- ------------- ----------
$5,419.5 $(11.2) $ 97.6 $192.1 $5,698.0 $ $5,698.0
========= ============ ============ ============= ========== ============= ==========
(1) Represents the historical financial position of the Company at October 10, 1993.
(2) Represents the net assets of the business to be purchased in the NTL transaction and the impact of the
Vitro transaction at October 10, 1993.
(3) Represents the impact of the Unilab transaction at October 31, 1993.
(4) See Note 2 to Pro Forma Information--Balance Sheet.
(5) Reflects the financial position of the Company on a pro forma basis assuming the Transactions had been
completed by October 10, 1993.
(6) See Note 2 to Pro Forma Information--Adjustments to Reflect the Offering.
(7) Reflects the financial position of the Company on a pro forma basis assuming the Transactions and the
Offering had been completed on October 10, 1993.
</TABLE>
<PAGE>
Corning
Notes to Unaudited Pro Forma Combined Financial Information
Note 1--Basis of Presentation:
The Unaudited Pro Forma Combined Statements of Income reflect the Company's
results of operations for the year ended January 3, 1993, and the forty weeks
ended October 10, 1993, on a pro forma basis assuming the Transactions had
been completed as of December 30, 1991. The Unaudited Pro Forma Combined
Balance Sheet at October 10, 1993, assumes that the Transactions had been
completed by that date.
Corning management believes that the assumptions used in preparing the Pro
Forma Information provide a reasonable basis for presenting all of the
significant effects of the Transactions, that the pro forma adjustments give
appropriate effect to those assumptions and that the pro forma adjustments
are properly applied in the Pro Forma Information.
Note 2--Pro Forma Adjustments:
Statement of Income
(a) The pro forma adjustment to non-operating gains represents the reversal
of the $7.3 million pretax loss ($9.0 million after tax gain) on the
formation of Corning Vitro on January 2, 1992. The pro forma adjustment is
required as a result of the Vitro transaction described in Note 4.
(b) The pro forma adjustment to cost of sales represents the increase in
amortization of the excess of cost over fair value of tangible net assets
acquired in the Damon transaction, the Pending Transactions, and the Other
Completed Transactions of $8.1 million, $6.2 million, and $2.3 million,
respectively, for the year ended January 3, 1993, and $5.7 million, $4.8
million and $1.8 million, respectively, for the forty weeks ended October 10,
1993.
Including $40 million of anticipated costs to restructure Damon's facilities
as a result of the integration of Corning's and Damon's operations, the
excess of cost over fair value of tangible net assets acquired in the Damon
transaction is $552 million. The excess of cost over fair value of tangible
net assets acquired has been allocated to goodwill with a life of forty
years. Management believes that fair value approximates book value for all
tangible assets.
(c) The pro forma adjustment represents the elimination of one-time
restructuring costs of $47.1 million related to closing MetPath facilities as
a result of the integration of Damon and MetPath and $7.9 million of Costar
transaction costs recorded in Corning's results for the forty weeks ended
October 10, 1993.
(d) The pro forma adjustment to interest expense represents the interest on
the debt incurred in connection with the Damon transaction, the Pending
Transactions and the Other Completed Transactions of $20.5 million, $8.2
million and $3.0 million, respectively, for the year ended January 3, 1993,
and $11.9 million, $6.3 million and $2.4 million, respectively, for the forty
weeks ended October 10, 1993. The weighted average interest rate on the debt
incurred in connection with the Damon transaction is 4.9% and on the Pending
Transactions and Other Completed Transactions ranges from 3.5% to 6.7%.
Corning financed the Damon acquisition and the refinancing of approximately
$167 million of indebtedness of Damon under short-term financing agreements
entered into with certain banks to effect this transaction. During the third
quarter of 1993, Corning refinanced a portion of this short-term financing by
issuing approximately $200 million of longer-term debt. The pro forma
adjustment for interest expense related to the Damon transaction is
calculated as the weighted average of short-term and longer-term interest
rates.
(e) The pro forma adjustment represents the elimination of approximately $1
million of one-time costs incurred by Damon in connection with a terminated
merger agreement with National Health Laboratories Incorporated ("NHL") which
were charged to results of operations for the seven months ended July 31,
1993.
(f) The pro forma adjustment to tax expense represents the tax effect of the
adjustments detailed in notes (a), (b), (c), (d) and (e) above. This
adjustment is calculated at Corning's historical effective tax rate.
(g) The pro forma adjustment to minority interest represents the applicable
minority interest on the historical earnings and pro forma adjustments of the
Pending Transactions and Other Completed Transactions.
<PAGE>
(h) The pro forma adjustment to weighted average shares outstanding
represents the issuance of 5.5 million shares to complete the Costar merger
in September 1993.
Balance Sheet
(i) The pro forma adjustment to goodwill represents the incremental goodwill
and other intangibles arising from the Pending Transactions of $180.1
million.
(j) The pro forma adjustment to other assets primarily relates to deferred
tax assets arising in connection with the Pending Transactions.
(k) The pro forma adjustment to short-term debt represents the incremental
debt to finance the Pending Transactions.
(l) The pro forma adjustment to other liabilities primarily relates to
reserves for integration costs of the Pending Transactions.
(m) The pro forma adjustment to minority interest represents a capital
contribution by a partner to finance one of the Pending Transactions.
(n) The pro forma adjustment to common stockholders' equity represents the
elimination of the net assets of the Pending Transactions accounted for using
the purchase method of accounting.
Adjustments to Reflect the Offering
(o) The pro forma adjustment to interest expense reflects the decrease in
interest expense assuming the issuance on December 30, 1991 of 8.0 million
shares of Corning Common Stock at an assumed price of $31.00 per share (net
of $9.3 million of underwriting commissions), and the use of the net proceeds
thereof to retire the indebtedness incurred in connection with the Pending
Transactions.
(p) The pro forma adjustment to tax expense reflects the tax effects of the
adjustment detailed in note (o) above.
(q) The pro forma adjustment to short-term debt and common stockholders'
equity assumes the issuance on December 30, 1991 of 8.0 million shares of
Corning Common Stock at an assumed price of $31.00 per share (net of $9.3
million of underwriting commissions).
Note 3--Earnings Per Share:
Earnings per common share are computed by dividing net income less preferred
dividends by the weighted average of common shares outstanding during each
period. Preferred dividends amounted to $2.2 million and $1.6 million during
the year ended January 3, 1993, and the forty weeks ended October 10, 1993,
respectively.
Note 4--Vitro Transaction:
On January 2, 1992, Corning entered into an alliance with Vitro, by
transferring 49% of its consumer-housewares businesses to Vitro, in exchange
for 49% of Vitro's consumer-products businesses and approximately $137
million in cash. The alliance consists of two jointly owned companies.
Corning owns 51% of Corning Vitro and consolidates its financial statements.
Until December 21, 1993, Corning owned 49% of Vitro Corning and accounted for
its investment under the equity method.
On December 14, 1993, Vitro and the Company reached an agreement in principle
whereby, in two separate transactions, Vitro purchased in December, 1993, the
shares of capital stock of Vitro Corning owned by the Company and the Company
will purchase in early 1994 the shares of capital stock of Corning Vitro held
by Vitro. The net cost to Corning of the two transactions will be $131
million. Corning and Vitro will continue their consumer products alliance
through cross distribution and supply agreements. Corning will finance the
payment to Vitro with the proceeds of the Offering.
Note 5--Unilab Transaction:
Corning, through a wholly owned subsidiary, owned 43% of Unilab. In November
1993, Corning acquired 100 percent of certain Unilab facilities in exchange
for a majority of the Unilab shares owned by Corning, the assumption of
approximately $70 million of Unilab debt and Corning's investment in J.S.
Pathology PLC ("J.S. Pathology"). Corning retained a 12% equity investment in
Unilab.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
1992 Performance
In 1992, Corning posted another year of record operating performance.
Consolidated sales rose 14% from 1991, as all segments recorded higher dollar
volumes. Gains in the Communications and Laboratory Services segments led
consolidated sales growth during 1992.
In 1992, Corning recorded a charge of $294.8 million ($1.56 per common share)
to reflect the cumulative effect of adoption of FAS 106 for all consolidated
and equity companies and a gain of $8.2 million ($0.04 per common share) to
reflect Corning's equity in the cumulative effect of adoption of FAS 109 by
an equity company. In addition, earnings were reduced by $21.3 million ($0.11
per common share) due to the increase in ongoing postretirement benefit
expense caused by the adoption of FAS 106. As a result of these charges,
Corning recorded a net loss of $12.6 million ($0.08 per common share) in 1992
compared with net income of $316.8 million ($1.69 per common share) in 1991.
Earnings from consolidated operations increased 12% in 1992 despite the
significant impact of a restructuring charge and the increased ongoing
postretirement benefit expense due to the adoption of FAS 106. Earnings
growth in consolidated operations, which was led by the Communications and
Laboratory Services segments, resulted from increased volume, improved
operating efficiencies and continued emphasis on effective cost control
programs. Acquisitions in the Laboratory Services segment also contributed to
the earnings improvement.
The increase in earnings from consolidated operations was substantially
offset by a decline in equity earnings. This decline was primarily
attributable to reduced earnings at Dow Corning and losses at both Vitro
Corning and Unilab partly offset by improved performance at Samsung-Corning
Company Ltd. ("Samsung-Corning") in Korea.
In 1992, Corning's earnings were significantly impacted by accounting changes
and, in both 1991 and 1992, by other unusual items. Excluding these items,
net income and earnings per share increased in both years.
1993 Performance
Consolidated sales for the forty weeks ended October 10, 1993 were $2,921.8
million, an increase of 8 percent over the same period in 1992. Approximately
one fourth of this increase resulted from acquisitions completed in the past
12 months. Net income for the 1993 forty week period totaled $105.7 million,
or $0.55 per share, and was significantly impacted by restructuring and other
special charges recorded in the third quarter. During the same period in
1992, the Company reported a loss of $53.8 million, or $0.29 per share,
primarily due to the one time impact of accounting changes in the first
quarter 1992 and charges associated with Dow Corning's terminated breast
implant business offset somewhat by net non-operating gains. Excluding the
impact of these items and extraordinary credits in both years, net income for
the first forty weeks totaled $233.1 million, or $1.21 per share, in 1993
compared to $234.5 million, or $1.24 per share, in 1992.
The restructuring and other special charges recorded in the third quarter
1993 included $207 million ($120.5 million after tax and minority interest)
of charges against consolidated operations and a $9.5 million reduction in
equity earnings as a result of a restructuring charge taken by Vitro Corning.
The consolidated charges included $36.5 million ($22 million after tax) of
settlement and related legal expenses incurred in the compromise agreement
between MetPath and the Civil Division of the DOJ concerning the marketing,
sale, pricing and billing of certain laboratory tests; and a restructuring
charge totaling $170.5 million ($98.5 million after tax and minority
interest) as a result of costs to integrate the Damon and Costar acquisitions
and a planned restructuring program announced October 6, 1993 to reduce
overhead costs during the next 12 to 14 months.
Earnings from consolidated operations for the first forty weeks of 1993,
excluding restructuring and other special charges and non-operating gains and
losses, declined 3 percent when compared to the same period last year
primarily due to weak third quarter results following modest growth in the
first half of 1993. The decline in third quarter earnings from consolidated
operations was principally due to weak performance in the consumer products
segment and other cyclical businesses, particularly in Europe. In addition,
lower prices reduced the rate of growth in both the MetPath blood testing
business and the optical fiber and cable businesses. Earnings were also
impacted by increased interest expense on debt incurred to finance the
acquisition of Damon and capital expansion programs.
<PAGE>
Excluding the 1993 restructuring charge at Vitro Corning and the 1992 charges
associated with Dow Corning's terminated breast implant business, equity
earnings for the first forty weeks of 1993 increased 5 percent over the first
forty weeks of 1992. The increase in equity earnings is primarily a result of
improved performance at Samsung Corning and Dow Corning. These gains were
offset somewhat by continued poor performance at Vitro Corning and a decline
in earnings from optical-fiber equity companies as a result of declining
fiber prices and the weak European economies.
Industry Segments
Corning's products and services are grouped into four industry segments:
Specialty Materials, Communications, Laboratory Services and Consumer
Products. The sales and earnings of equity affiliates are discussed in terms
of these same four industry segments. The 1992 results of certain businesses
transferred from Corning Vitro to the Specialty Materials segment of Corning
have been reclassified to conform to the current year's presentation. The
effect of this reclassification is to increase 1992 sales and income before
taxes of the Specialty Materials segment and decrease 1992 sales and income
before taxes of the Consumer Products segment by $16.2 million and $6.1
million, respectively.
Corning recorded a restructuring charge totaling $170.5 million pretax in the
third quarter of 1993. Included in this pretax charge is approximately $47
million of anticipated costs to close MetPath facilities as a result of the
integration of the Damon acquisition, approximately $8 million of transaction
expenses related to the Costar acquisition and approximately $40 million
related to restructuring programs already underway in the consumer products
segment. The remaining $75 million is primarily a reserve for a
corporate-wide restructuring program announced on October 6, 1993 to reduce
overhead expenses over the next 12 to 14 months. The following segment
overview excludes the entire $170.5 million restructuring charge.
Specialty Materials
(In millions)
<TABLE>
<CAPTION>
Forty weeks ended(a) Fiscal year ended
----------------------------- ------------------------
October 10, October 4, Jan. 3, Dec. 29,
1993 1992 1993 1991
------------- ------------ ------------ --------
<S> <C> <C> <C> <C>
Consolidated sales $569.4 $560.8 $750.1(b) $704.4
Income before taxes 75.2 70.1 93.8(b)(c) 92.2
(a) Both forty week periods include the incremental expense from the adoption of FAS 106.
(b) Reclassified to conform to the current year presentation.
(c) Includes $8.5 million of incremental expense due to the adoption of FAS 106.
</TABLE>
Consolidated operations:
Consolidated sales of this segment increased in 1992. Earnings in this
segment increased despite the significant impact of weak worldwide economies
and the adoption of FAS 106 in 1992.
Worldwide sales and earnings in the environmental products division led the
growth in this segment during 1992. Legislation mandating the use of
pollution-control devices drove the increase in demand. Worldwide
manufacturing reconfiguration and benefits from Corning's quality programs,
such as "Partnership in the Workplace", resulted in manufacturing gains and
earnings improvement in this division in 1992.
Sales volume in 1992 in the science-products business increased at a moderate
pace over the prior year primarily due to the rapidly growing market for
plastic products and Corning's introduction of new products. Earnings gains
in the plastic-products business resulted from significantly improved
manufacturing efficiencies. This gain was partly offset by earnings declines
in the glass-products business. Glass manufacturing operations were
negatively impacted as a result of major tank-shutdown and rebuilding
projects.
Sales growth in the worldwide optical-products business was constrained in
1992 by weak worldwide economic conditions causing a decline in earnings of
this business. Sales and earnings in the lighting business increased in 1992.
Earnings grew in line with sales gains as the demand for new specialty and
commercial lighting products offset slowed growth in automobile lighting
components.
Consolidated sales for the first forty weeks of 1993 were up over the prior
year primarily due to a strong performance by the science-products business
which included one month of Costar sales. Year to date earnings of the
science-products business have exceeded last year's full year earnings due to
strong vol
<PAGE>
umes and manufacturing efficiencies in both the plastic and glass product
lines. The environmental-products and optical businesses have experienced
solid sales and earnings growth in the United States, but have been
negatively impacted by weak European economies. The weak European economies
have also influenced sales and earnings of the process systems business.
Product mix changes in the advanced materials business resulted in reduced
sales but increased profitability.
Equity companies:
<TABLE>
<CAPTION>
(In millions) Forty weeks ended Fiscal year ended
----------------------------- -------------------------
October 10, October 4, Jan. 3, Dec. 29,
1993 1992 1993 1991
------------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Net sales $1,718.3 $1,663.6 $2,230.6 $2,090.5
Corning's share of net income(a) 47.7 20.9 20.3 83.5
(a) Before equity in changes in accounting methods but including $24.5 million and $37.7 million of special
charges in the first forty weeks and full year 1992, respectively.
</TABLE>
Corning is an investor in and receives income from a number of equity
companies in the Specialty Materials segment, including Pittsburgh Corning
Corporation and Pittsburgh Corning Europe, N.V. (together, "Pittsburgh
Corning") and Dow Corning. Dow Corning's sales increased in 1992; however,
earnings declined in 1992 due primarily to charges associated with its
terminated breast implant business and restructuring charges. Dow Corning's
operating income also declined in 1992 as a result of the impact of weak
worldwide economies, losses incurred on terminated foreign-exchange related
contracts and the increase in postretirement benefit expense caused by the
adoption of FAS 106.
Corning also has equity investments in several developing businesses such as
stationary emission control devices and ceramic cooktops. Profitability in
these businesses in 1992 was impacted by continued investment in new
technologies and market development.
Dow Corning's sales for the first forty weeks of 1993 increased over the
prior year. Excluding the impact of the 1992 charges associated with Dow
Corning's terminated breast implant business, Dow Corning's earnings
increased. Dow Corning's results continue to be impacted by weak economies in
Europe and Japan.
In September 1993, Dow Corning announced that a proposal had been developed
to settle on a global basis matters involved in litigation over silicone-gel
breast implant products. The proposal, which is being reviewed by
representatives of the plaintiffs and defendants in such litigation,
contemplates that industry participants (including manufacturers, raw
material suppliers, insurance carriers, physicians and other health care
providers) would jointly fund $4.75 billion over a 30-year period. On January
14, 1994 Dow Corning announced that it would take a pre-tax charge against
earnings for the fourth quarter of 1993 of $640 million ($415 million
after-tax) to reflect its best estimate, as of that date, of the net present
value of its potential liability and costs, net of the recoveries it expects
to receive from its insurance carriers, as a result of its involvement in the
breast implant litigation. Dow Corning noted in this announcement that as
breast implant litigation settlement negotiations continue additional facts
and circumstances may develop which may require Dow Corning to revise this
estimate or to make additional provisions to reflect any additional costs of
resolving this matter.
On that same date, Corning announced that, as a result of Dow Corning's
decision to take this charge, Corning would record a charge of $203 million
after-tax against its equity in earnings of associated companies for the
fourth quarter of 1993 and against the carrying value of its investment
in Dow Corning at the end of fiscal 1993. Corning does not believe that its
share of any additional charge taken by Dow Corning resulting from the
proposed settlement will have a material adverse effect upon Corning's
overall financial condition. However, it is possible that Corning's share
of any such charge taken by Dow Corning will have a materially adverse
effect upon Corning's earnings in the quarter in which any such charge is
recognized by Dow Corning.
Communications
<TABLE>
<CAPTION>
(In millions) Forty weeks ended(a) Fiscal year ended
----------------------------- -------------------------
October 10, October 4, Jan. 3, Dec. 29,
1993 1992 1993 1991
------------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Consolidated sales $886.4 $763.7 $1,036.6 $901.8
Income before tax 198.6 170.5 230.1(b) 189.1
</TABLE>
(a) Both forty week periods include the incremental expense due to the
adoption of FAS 106.
(b) Includes $9.1 million of incremental expense due to the adoption of FAS
106.
<PAGE>
Consolidated operations:
Consolidated sales and earnings in this segment increased significantly in
1992. This performance was driven by continued strong growth in worldwide
demand for optical fiber and optical cable. Volume growth in the advanced
display products business also made a positive contribution.
Sales and earnings of Corning's optical-fiber and optical-cable businesses
increased significantly in 1992. Market growth was led by the increased use
of fiber-optic cable in the feeder portions of telephone networks and the
rapidly growing use of fiber in cable television systems. In 1992, Corning
completed the expansion of its Wilmington, N.C., optical-fiber manufacturing
facility which represents a vital investment in technological leadership in
this industry. Siecor also expanded its cable manufacturing capacity as its
volume continued to grow with the market. To provide additional revenue
growth in future years, Corning has invested substantially in the development
of several businesses in this segment. These businesses include primarily a
variety of optical components to bring optical fiber to the home.
Sales volume in the advanced display products business, which produces
liquid-crystal display glass, increased substantially in 1992 after doubling
in 1991. Profitability was impacted by continued significant investment into
research and development to enhance Corning's leadership position as the
largest supplier of this high purity glass. The primary application to date
for this material has been in color displays for personal computers. To
strengthen Corning's position in the Japanese marketplace and meet customer
demands, Corning sold an equity interest totaling approximately 20% in this
business to Japanese investors in 1992 and 1991.
Sales volume in the conventional-video components (primarily glass for
television bulbs) and projection-video businesses increased in 1992 following
relatively flat sales in 1991. Product mix continues to shift from medium to
larger size video components which contributed to the sales increase.
Earnings were up in 1992 after a slight decline in 1991 as a result of higher
volume and manufacturing efficiency gains.
In 1992, Corning acquired Biosym Technologies, Inc. ("Biosym"), a worldwide
scientific software company. Biosym specializes in the development, marketing
and support of computer-aided molecular design software which, using
information display technology, streamlines the processes of discovering,
developing and bringing to market new drugs, chemicals and materials through
research at the atomic level. For Corning, this acquisition represents an
entry into the molecular modeling industry and is consistent with Corning's
commitment to materials research and to the delivery of high-quality
scientific services.
Sales of optical fiber and optical cable for the first forty weeks of 1993
increased as worldwide demand continued to contribute to improved volumes
which more than offset price reductions. Although year to date earnings of
the optical fiber and optical cable businesses increased over the prior year,
the rate of growth slowed in the third quarter due to aggressive pricing to
secure long-term supply contracts.
Sales in the advanced display products business have grown significantly as
the demand for liquid-crystal display glass continues to grow. Solid
manufacturing gains have resulted in this business operating profitably in
the first forty weeks of 1993 despite continued strategic investments in
research and development. Sales and earnings in both the conventional-video
components and the projection video businesses increased in the first forty
weeks of 1993 as a result of increased demand and continued manufacturing
gains. The profitability of this segment continues to be impacted by
investments in developing businesses.
Equity companies:
(In millions)
<TABLE>
<CAPTION>
Forty weeks ended Fiscal year ended
--------------------- -----------------
October October Jan.
10, 4, 3, Dec. 29,
1993 1992 1993 1991
--------- -------- ----- --------
<S> <C> <C> <C> <C>
Net sales $509.2 $511.8 $685.8 $609.1
Corning's share of net
income 28.0 27.4 37.4 25.8
</TABLE>
Samsung-Corning produces glass panels and funnels in Korea for entertainment
television and display monitors. Samsung-Corning's sales and earnings
increased substantially in 1992, primarily as a result of increased volume
and improved manufacturing performance. Sales and earnings of Corning's
optical-fiber equity companies remained level in 1992 following a significant
increase in 1991 primarily as a result of adverse market conditions in the
United Kingdom.
Sales and earnings of Samsung-Corning were up in the first forty weeks of
1993 due to modest sales growth which continues to reflect the recovery in
the Korean marketplace, the strength of the Japanese Yen and lower interest
costs. Sales and earnings of the optical-fiber equity companies for the first
forty weeks of 1993 declined from 1992 levels primarily as a result of 21
declining fiber prices and the weak European economies.
<PAGE>
Laboratory Services
(In millions)
<TABLE>
<CAPTION>
Forty weeks ended Fiscal year ended
----------------------------- -------------------------
October 10, October 4, Jan. 3, Dec. 29,
1993 1992 1993 1991
------------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Consolidated sales $933.2 $845.0 $1,149.8 $884.3
Income before tax 122.9(a) 149.1 203.1 155.5
</TABLE>
(a) Includes $36.5 million charge for the MetPath settlement.
Consolidated operations:
Consolidated sales and earnings in this segment achieved record levels in
1992 reflecting the strong performance of existing businesses and growth from
strategic acquisitions. The impact of FAS 106 on this segment was not
material.
The laboratory-services businesses operate as a wholly owned subsidiary
called Corning Lab Services, Inc. ("CLSI"). CLSI competes in three different
areas of the laboratory services market; namely, clinical-laboratory testing
through its MetPath division, pharmaceutical testing, and
environmental-laboratory testing through its Enseco division ("Enseco").
MetPath, the clinical-laboratory testing business of CLSI, reported
significant sales and earnings growth in 1992. This growth reflected the
success of MetPath's continuing focus on regional markets and expansion
through acquisitions. Several laboratories were acquired in the last three
years, primarily in the Central and Eastern regions of the United States and
in Europe, accounting for approximately 25% of this business' growth in
revenues. In addition, emphasis on preventive medicine and changing
demographics, coupled with the introduction of new diagnostic tests,
contributed to the increased demand for clinical-laboratory testing services.
Sales in the pharmaceutical-testing businesses, consisting of Hazleton, G.H.
Besselaar Associates ("Besselaar") and SciCor, Inc. ("SciCor"), increased in
1992. Earnings also improved significantly in 1992 primarily as a result of
cost reduction actions taken by Hazleton in response to the previous year's
lower than expected volume. Sales and earnings at Besselaar increased in
1992. To complement and expand the existing contract research organization,
SciCor was acquired in 1991. SciCor performs clinical laboratory tests and
data management for patients in clinical trials of new drug compounds.
SciCor's sales and earnings showed strong improvement in 1992 over 1991.
Sales at Enseco, the environmental-laboratory testing business of CLSI,
increased in 1992 primarily due to the late 1991 acquisition of
Wadsworth/ALERT Laboratories Inc. Earnings increased substantially over 1991
as a result of improved operations and cost reduction programs.
MetPath accounted for the majority of the increased sales of this segment in
the first forty weeks of 1993. Approximately two-thirds of MetPath's growth
resulted from increased volume and one-third resulted from the acquisition of
Damon. Although volume was up, gains were not as high as expected due to the
current uncertainty in the health care industry. Pricing pressure has become
stronger in this business as a result of a higher mix of business from lower
priced managed care clients. Excluding the impact of the settlement with the
DOJ, MetPath's earnings for the first forty weeks of 1993 were up only
slightly when compared with 1992. Sales and earnings in the
pharmaceutical-testing businesses showed solid growth primarily due to strong
performance at Hazleton and SciCor. Sales and earnings in the
environmental-laboratory testing businesses declined slightly in the first
forty weeks of 1993 due to weak market conditions. Price pressures in this
segment are expected to continue and cost reduction actions are being
implemented.
In September 1993, MetPath recorded a charge of $36.5 million to reflect the
settlement and related legal expenses associated with its compromise
agreement with the DOJ to settle claims brought on behalf of the Inspector
General. The claims related to the marketing, sale, pricing, and billing of
certain blood test series provided to Medicare patients. The settlement does
not constitute an admission by MetPath with respect to any issue arising from
the civil action. In the third quarter 1993, MetPath, along with other major
clinical laboratories, received subpoenas for additional information relating
to certain other tests. In addition, certain payors are reviewing their
reimbursement practices for laboratory tests in response to recent
announcements by certain competitors and continued pressure by government
agencies. The outcome of these events is uncertain but could negatively
impact revenue and earnings growth.
<PAGE>
Equity companies:
(In millions)
<TABLE>
<CAPTION>
Forty weeks ended Fiscal year ended
----------------------------- ----------------------------
October 10, October 4, Jan. 3, Dec. 29,
1993 1992 1993 1991
------------- ------------ ------------- ------------
<S> <C> <C> <C> <C>
Net sales $16.1 $117.9 $228.4 $198.7
Corning's share of net income
(loss) (0.3) (7.3) (8.5) 0.7
</TABLE>
Equity losses in 1992 in this segment are primarily related to Unilab which
is currently accounted for using the cost method of accounting for
investments. At year end 1992, Corning owned 43% of Unilab and accounted for
the investment using the equity method. In January 1993, Corning signed a
definitive agreement with Unilab which contemplated that Corning would
acquire 100% of certain Unilab facilities (with gross revenues of
approximately $85 million) in exchange for a majority of the Unilab shares
owned by Corning, the assumption of approximately $70 million of Unilab debt
and Corning's investment in J.S. Pathology. This transaction was approved by
the Unilab stockholders and completed on November 10, 1993. Corning retained
a 12% equity investment in Unilab.
Consumer Products
(In millions)
<TABLE>
<CAPTION>
Forty weeks ended(a) Fiscal year ended
----------------------------- -----------------------------
October 10, October 4, Jan. 3, Dec. 29,
1993 1992 1993 1991
------------- ------------ -------------- ------------
<S> <C> <C> <C> <C>
Consolidated sales $532.8 $542.9 $772.2(b) $768.7
Income (loss) before taxes 7.8 22.7 (20.3)(b)(c) 57.7
</TABLE>
(a) Both forty week periods include the incremental expense due to the
adoption of FAS 106.
(b) Reclassified to conform to the current year presentation.
(c) Includes restructuring charge of $63.3 million and $6.3 million of
incremental expense due to the adoption of FAS 106.
Consolidated operations:
Consolidated sales in the Consumer Products segment increased in 1992.
However, sales and earnings continue to be impacted by weak worldwide
economies. In 1992, the restructuring provision for this segment's Brazilian
operations and an increase in postretirement benefits expense due to the
adoption of FAS 106 resulted in a loss.
On January 2, 1992, Corning entered into an alliance with Vitro, a major
Mexican industrial group. The new alliance combined Corning's consumer
housewares businesses and Vitro's consumer businesses into two jointly owned
companies. The United States-based company, Corning Vitro, serves Corning's
worldwide markets and is led by Corning management. Corning owns 51% of this
company and consolidates its financial statements. The second company, Vitro
Corning, is based in Mexico and is led by Vitro management. Until December
21, 1993, Corning owned 49% of this company and accounted for its investment
under the equity method.
On December 14, 1993, Vitro and the Company reached an agreement in principle
whereby, in two separate transactions, Vitro purchased in December 1993, the
shares of capital stock of Vitro Corning owned by the Company and the Company
will purchase in early 1994 the shares of capital stock of Corning Vitro
currently owned by Vitro. The net cost to Corning of the two transactions
will be $131 million. Corning and Vitro will continue their consumer products
alliance through cross distribution and supply agreements. Corning will
finance the payment to Vitro with the proceeds of the Offering.
Sales volume increased in the United States and Asia Pacific in 1992. The
volume growth in the United States came primarily from the sale of Vitro
product lines. The sales volume increase was partially offset by a continued
slow-down in European consumer markets and significant declines in Brazil due
to unstable economic conditions. Continued weak worldwide economic
conditions, particularly in Brazil, affected all product lines equally with
the exception of Corelle(R) dinnerware which recorded volume increases around
the world, reflecting growth from new product introductions.
Earnings of this segment declined in 1992. Worldwide cost reduction programs
and manufacturing efficiency gains in the United States were offset by lower
than expected volumes in Brazil and Europe. In 1992, Corning Vitro decided to
restructure and discontinue operations in Brazil due to continued significant
losses. As a result, a restructuring provision of $63.3 million pre-tax was
recorded in 1992.
<PAGE>
Sales in the Serengeti(R) sunglass product lines increased in 1992 as new
product introductions contributed to international growth. Earnings in 1992
were reduced by promotions and marketing programs to support these new
product introductions.
Sales and earnings of the consumer products segment for the first forty weeks
of 1993 declined in comparison to 1992 due to the combined impact of a poor
worldwide economic and retail sales environment and the impact of reduced
manufacturing efficiencies caused by lower volume. Sales in the United States
and Canada, which were up slightly when compared with last year, continue to
be impacted by low consumer confidence. The recession in Europe continues to
impact sales volumes in all major markets. The profitability of all product
lines has been affected by promotional activities and reduced volumes.
Equity companies:
(In millions)
<TABLE>
<CAPTION>
Forty weeks ended Fiscal year ended
----------------------------- ------------------------
October 10, October 4, Jan. 3, Dec. 29,
1993 1992 1993 1991
------------- ------------ --------- ------------
<S> <C> <C> <C> <C>
Net sales $212.0 $207.7 $273.4 $87.7
Corning's share of net income (loss) (19.0)(a) (2.7) (5.4) 1.7
</TABLE>
(a) Includes a $9.5 million restructuring charge at Vitro Corning.
Equity earnings declined in 1992 as the result of equity losses recorded from
the first year of operations of Vitro Corning, due primarily to adverse
retail market conditions in Mexico. Equity earnings from Corning's interest
in CALP S.p.A., an Italian manufacturer of crystal stemware, were relatively
unchanged in 1992.
Equity earnings in 1993 continue to be negatively impacted by the poor
operating results of Vitro Corning, due in part to an increase in foreign
competition in Mexico compounded by the strengthening of the Mexican Peso.
Other Revenues and Deductions
Non-operating gains and losses: During the first forty weeks and full year
1992, Corning recognized net non-operating gains from consolidated operations
totaling $7.0 million ($21.7 million after-tax), including a gain of $10.1
million (before- and after-tax) from the sale of an additional equity
interest in Corning Japan and a pre-tax loss of $7.3 million ($9.0 million
after-tax gain) from the formation of the consumer housewares venture with
Vitro.
In 1991, Corning recognized net non-operating gains from consolidated
operations totaling $8.1 million ($14.6 million after-tax) which included a
gain of $5.3 million (before- and after-tax) on the sale of an equity
interest in Corning Japan.
During the first forty weeks of 1993, Corning recognized a non-operating gain
totaling $4.2 million ($2.6 million after-tax).
Provision for restructuring and other special charges: In 1992, Corning
recorded a provision of $63.3 million ($32.1 million after tax of $22.9
million and minority interest of $8.3 million) as a result of Corning Vitro's
decision to restructure its Brazilian operations.
During the first forty weeks of 1993, Corning recorded a restructuring charge
of $170.5 million ($98.5 million after tax of $64.6 million and minority
interest of $7.4 million) as a result of costs to integrate the Damon and
Costar acquisitions and as a result of a planned company-wide restructuring
program announced October 6, 1993, to reduce overhead costs during the next
12 to 14 months.
Also during the first forty weeks of 1993, MetPath reached a compromise
agreement with the Civil Division to settle claims brought on behalf of the
Inspector General. The claims related to the marketing, sale, pricing and
billing of certain blood test series provided to Medicare patients. MetPath
recorded a charge of $36.5 million ($22.0 million after tax) to reflect the
settlement and related legal expenses. The settlement does not constitute an
admission by MetPath with respect to any issue arising from the civil action.
Equity earnings: In 1992, Corning recognized a $37.7 million reduction in
equity earnings which included $24.5 million of costs associated with Dow
Corning's terminated breast implant business in the
<PAGE>
first forty weeks of 1992 and $13.2 million of restructuring charges
associated with Dow Corning's exit from its Brazilian operations and other
cost reduction programs in the fourth quarter 1992.
In 1991, Corning recognized an $8.2 million reduction in equity earnings to
reflect a charge recorded by Dow Corning for costs associated with its
terminated breast implant business.
In the first forty weeks of 1993, Corning recognized a $9.5 million reduction
in equity earnings as a result of a restructuring charge taken by Vitro
Corning.
Taxes
Corning's effective tax rate varies between years due primarily to the impact
of certain non-operating gains and losses and restructuring and other special
charges. The effective tax rates, excluding these items, were 33 percent and
37 percent in 1992 and 1991 respectively, and 33 percent and 34 percent for
the first forty weeks of 1993 and 1992, respectively. The lower 1992 and 1993
rates primarily result from repatriation programs and the increased
utilization of tax credits.
On August 11, the Revenue Reconciliation Act of 1993 (the "Act") was signed
into law. The Act increased the U.S. corporate statutory tax rate from 34
percent to 35 percent for years beginning after December 31, 1992, changed
the deductibility of certain expenses, and extended certain tax credits. The
increase in the statutory tax rate resulted in a gain from the revaluation of
Corning's net deferred tax assets in the third quarter which lowered the 1993
effective tax rate somewhat. Excluding this gain, the Act should not have a
material impact on Corning's annual tax rate.
Liquidity and Capital Resources
Corning's working capital declined to $465.2 million at the end of 1992 from
$521.0 million at the end of 1991. The ratio of current assets to current
liabilities was 1.6 at the end of 1992 compared with 1.7 at the end of 1991.
During 1992, Corning issued $155 million of long-term debt. Corning's ratio
of long-term debt to total capital increased to 28% at the end of 1992 from
24% at the end of 1991. The increase in this ratio is primarily a result of
the reduction in equity associated with the adoption of FAS 106.
Corning's working capital position at January 3, 1993 was reinforced by
available bank credit lines of $455 million and the ability to issue up to
$150 million of medium- and long-term debt under existing shelf-registration
statements filed with the Commission. During the first half 1993, Corning
issued $100 million of medium-term notes under such registration statements.
Corning's working capital decreased from $465.2 million at the end of 1992 to
$210.1 million at October 10, 1993. The ratio of current assets to current
liabilities was 1.2 at October 10, 1993 compared to 1.6 at year-end 1992.
Corning's long-term debt as a percentage of total capital was 36 percent at
the end of the third quarter, compared to 28 percent at year-end 1992. The
variance in these ratios is primarily due to the financing of the Damon
acquisition.
In July 1993, Corning increased its available bank credit lines by $100
million and borrowed $600 million under short-term financing agreements with
two banks to finance the acquisition of Damon for approximately $405 million
in cash and the refinancing of approximately $167 million of Damon's debt. In
August 1993, Corning filed a shelf registration statement with the Commission
to increase the amount of registered debt securities from $50 million to $500
million. During the third quarter, Corning issued $200 million of debt
securities in public offerings and used the proceeds of such offerings to
repay a portion of the acquisition debt. Corning intends to refinance a
significant portion of the remaining acquisition debt with the proceeds of an
offering of equity securities in 1994.
Cash Flows
Cash and short-term investments declined during 1992 by $74.5 million
primarily due to investing activities and financing activities which used
cash of $418.6 million and $146.1 million, respectively, offset by operating
activities which provided cash of $495.1 million. Cash and short-term
investments increased in 1991 by $74.6 million primarily as a result of
operating activities which provided cash of $471.0 million offset by
investing and financing activities which used cash of $359.6 million and
$34.3 million, respectively. Cash flows from operating activities were
relatively unchanged in comparison to 1991.
Cash used in investing activities increased in 1992 over 1991 primarily due
to increased investments in plant and equipment and acquisitions in the
Laboratory Services segment, partially offset by the receipt of approximately
$137 million of net proceeds from the formation of Corning Vitro and Vitro
Corning. Capital additions increased in 1992 primarily due to the continued
expansion of the Wilmington, N.C., optical-
<PAGE>
fiber manufacturing facility, the construction of additional facilities to
support MetPath's growth and the construction of a new corporate headquarters
building. The Company's 1993 capital expenditures are expected to increase,
primarily due to a significant expansion of the liquid-crystal display
manufacturing facility in Japan.
In 1992, cash used in financing activities increased significantly due to
higher levels of Common Stock repurchases and dividend payments. Corning
repurchased 2,910,500 and 1,989,000 shares of its Common Stock in 1992 and
1991, respectively, pursuant to a systematic plan authorized by the Board of
Directors. This activity is designed to provide shares for Corning's various
employee-benefit programs. Corning suspended its share repurchase program in
May 1993 to conserve cash for acquisition purposes.
Dividends paid to holders of Common Stock in 1992 totaled $176.7 million,
compared with $92.6 million in 1991. The higher 1992 payment resulted from a
$0.15 per share special dividend declared in 1991 and paid in 1992 and the
payment of the fourth quarter 1992 dividend prior to the end of fiscal 1992.
Excluding these special payments, the increase in dividends paid was caused
by an increase in the dividend rate of 17% in 1992 and an increase in the
number of shares of Common Stock outstanding.
Cash and short-term investments declined by $11.9 million and $98.6 million
during the first forty weeks of 1993 and 1992, respectively. The $11.9
million decline in the first forty weeks of 1993 is primarily due to
investing activities which used cash of $714.6 million offset by operating
and financing activities which provided cash of $157.5 and $542.9 million,
respectively. The $98.6 million decline in the first forty weeks of 1992 was
caused by investing and financing activities which used cash of $303.4
million and $21.5 million, respectively, offset by cash provided by operating
activities of $223.5 million.
Net cash provided by operating activities decreased in the first forty weeks
of 1993 from the comparable period in 1992 primarily due to the payment by
MetPath to the DOJ and the suspension of dividend payments from Dow Corning.
Net cash used in investing activities increased significantly in the first
forty weeks of 1993 compared with the same period in 1992 primarily due to
the acquisition of Damon for approximately $405 million and the
telecommunications business of GTE Control Devices Incorporated for
approximately $45 million. Capital spending increased only slightly in the
first forty weeks of 1993 compared with the same period in 1992 due to the
timing of payments on several large projects. Total 1993 capital spending is
expected to exceed 1992 levels. Investing activities in the first forty weeks
of 1992 included the receipt of approximately $137 million in net proceeds
from the formation of Corning Vitro and Vitro Corning, offset by the
investment of approximately $175 million in the laboratory services segment.
Net cash provided by financing activities increased significantly during the
first forty weeks of 1993 over the comparable period in 1992 primarily as a
result of increased borrowings to finance the acquisition of Damon and the
telecommunications business of GTE Control Devices Incorporated and to
finance continued capital expansion programs. Cash provided by financing
activities also increased as a result of reduced dividend payments and common
stock repurchases. Corning's dividend rate increased from $0.15 to $0.17 per
share in the fourth quarter of 1992; however, dividend payments declined in
1993 compared to 1992 due primarily to the timing of dividend payments.
Corning suspended its share repurchase program in May 1993 to conserve cash
for acquisition purposes.
<PAGE>
BUSINESS
General
Corning traces its origin to a glass business established by the Houghton
family in 1851. The present corporation was incorporated in the State of New
York in December 1936, and its name was changed from Corning Glass Works to
Corning Incorporated on April 28, 1989.
Corning is an international corporation competing in four broadly-based
business segments: Specialty Materials, Communications, Laboratory Services
and Consumer Products. Corning is engaged principally in the manufacture and
sale of products made from specialty glasses and related inorganic materials
having special properties of chemical stability, electrical resistance, heat
resistance, light transmission and mechanical strength. Corning and its
subsidiaries annually produce some 60,000 different products at 46 plants in
eight countries. In addition, Corning, through subsidiaries and affiliates,
engages in laboratory services businesses, including life and environmental
sciences and clinical-laboratory testing at 54 facilities in ten countries.
Specialty Materials
Corning's Specialty Materials segment sells more than 40,000 products and has
evolved from Corning's historical business base in materials development. The
major business units within the Specialty Materials segment are: automotive
substrates, ophthalmic and optical products, automotive lighting, science
products, and other advanced materials. Products manufactured by these
businesses include cellular ceramics for automotive and stationary
emission-control devices, plastic and glass ware for laboratory applications
and glass optical lenses.
Corning's long standing commitment to research, development and engineering
has driven the introduction of new products and technologies. In the 1970's
Corning developed the technology and created products for the substrates used
in emission control systems. Today the environmental products business
continues to be a driving force within the Specialty Materials segment.
Corning continues to develop new products and technologies to meet increasing
demand as a result of tightened regulations in the United States and Europe
and new regulations in other parts of the world. For example, to meet
tightening clean air standards, Corning has developed as a prototype an
electrically heated automotive catalytic converter substrate that begins
working within seconds of ignition, which is when most of the pollutants are
generated. Corning has developed a new family of materials, glass-polymers,
the properties of which make them well suited for components in automobiles,
aircraft, lighting systems and electronic devices.
Corning's equity company investments in this segment include Dow Corning,
Pittsburgh Corning and Cormetech, Inc., an equity company which manufactures
and sells stationary emission control devices for power plants.
Communications
Corning's Communications segment consists of the following major product
lines: optical fiber, optical cable, optical components, liquid-crystal
display glass, television bulbs, lenses for projection television, and
magnetic memory disks.
Corning's Communications segment also originates from Corning's commitment to
research and development in new materials. Corning led the development of the
modern opto-electronics market with its invention of optical fiber in the
late 1960's and is the leading supplier of optical fiber and such supporting
components as couplers and signal splitters. Corning is also a leading
supplier of optical cable through its 50% ownership of Siecor. In addition,
Corning has several equity investments in companies that produce optical
fiber internationally.
Approximately two-thirds of the revenues in the Communications segment are
generated by sales of opto-electronic products. Today, optical fiber is
penetrating the communications market as optical fiber is rapidly becoming
the preferred way to transmit telephone, cable-TV and computer data
worldwide. Optical fiber permits the transmission of substantially more data
over greater distances with less distortion than does copper, the product it
is principally replacing. As users of optical fiber increase applications and
expand services, Corning continues to provide new and improved optical-fiber
products and corollary components to an expanding market. During the next few
years, management believes that more fiber will be deployed in distribution
cables and that utilization of fiber to the home will increase.
Corning continues to be a leading producer of glass panels and funnels for
television picture tubes through Corning Asahi Video, and is also a world
leader in the production of projection television lenses through its wholly
owned subsidiary, U.S. Precision Lens Inc.
<PAGE>
The market for liquid-crystal display glass continues to grow, currently
driven by notebook computer and portable-TV sales. Future applications are
expected to include desktop-computer displays, projection-TV systems, video
phones and automotive applications. Corning is the world's leading supplier
in this market.
Another Corning invention, the MemCor(tm) glass-ceramic memory disk for
high-performance hard-disk drives in computers, significantly increases
storage capacity and improves reliability. The first major customer shipments
began in the first half 1993.
Also included in this segment is Biosym, which develops and markets
computer-aided molecular design software.
Laboratory Services
Corning entered the laboratory services market in the early 1970's with its
initial investment in MetPath, a regional U.S. clinical laboratory which
Corning acquired in 1982. Since 1982, Corning has made several other
acquisitions in the clinical, biological, pharmaceutical and
environmental-services industries. In 1991 Corning combined its
laboratory-service business units into a wholly owned subsidiary, CLSI, to
better manage the development of its business in this rapidly growing area.
Today CLSI operates 54 major facilities in ten countries that provide
clinical, pharmaceutical and environmental testing services.
CLSI's testing division, MetPath, performs more than 1,400 different clinical
tests for physicians, hospitals, laboratories, industries, health-maintenance
organizations and other managed-care providers through a quick-response
network of regional U.S. laboratories. MetPath is a leader in providing
cost-effective and reliable clinical diagnostic testing services. See
"--Recent Developments--Department of Justice Investigation."
Corning's pharmaceutical-testing businesses are conducted by CLSI's wholly
owned subsidiaries, Besselaar, Hazelton and SciCor. These businesses perform
chemical and biological testing, clinical research and data management
services primarily for the pharmaceutical industry. Corning's
environmental-laboratory testing business is conducted by CLSI's Enseco
division and provides tests for environmental contaminants in soil, water and
air for industry and government.
Corning's Laboratory Services segment is being affected by new Federal
legislation to be implemented in January 1994. The new legislation will
reduce Medicare reimbursement rates and will limit future laboratory fee
increases. In addition, the Clinton Administration's health-care plan calls
for managed competition with limitations on total national health-care
expenditures and on the annual growth of such expenditures. A health-care
reform model based on managed competition will likely reduce reimbursements
for clinical laboratory services as managed care networks continue to
proliferate. As the plan also calls for insurance coverage for some 37
million people who currently have no such coverage, it is expected that
demand for such services will increase. Demand should also increase as a
result of a stronger emphasis on testing as a preventative measure. It is not
clear how quickly or to what extent Medicare and Medicaid programs will be
incorporated into the health reform system. Management believes that while
the entire health-care industry faces dramatic challenges to build a more
effective means of delivery of services, MetPath's leading market position in
major geographic areas will allow Corning to continue to benefit from the
ongoing and increasing consolidation in the industry.
Consumer Products
Corning is well known for its line of consumer housewares with strong brand
names and consumer franchise. Key product lines are Pyrex(R) glassware,
Corelle(R) tableware, Corning Ware(R), Visions(R) cookware, and Revere
Ware(R) cookware. Other Corning consumer products include the prestigious
Steuben(R) crystal and Serengeti(R) sunglasses.
Corning's executive offices are located at One Riverfront Plaza, Corning, New
York 14831, and its telephone number at such offices is (607) 974-9000.
Recent Developments
Acquisition of NTL Assets. On December 14, 1993, NTL, Siecor and the Company
reached an agreement whereby the Company would purchase the net assets
constituting NTL's optical fiber business for $87 million in cash and Siecor
would purchase the net assets constituting NTL's optical cable business for
$43 million in cash. Corning will finance the acquisition of NTL's optical
fiber business and a $25 million capital contribution to Siecor with a
portion of the proceeds of the Offering. Siecor will finance the acqui
<PAGE>
sition of NTL's optical cable business with a capital contribution from
Siemens and the Company. Closing of both transactions is expected to occur
during the first quarter of 1994.
The acquisition of the optical fiber and optical cable assets of NTL will
provide Corning and Siecor access to the expanding optical fiber cable
markets in Canada.
Vitro Transaction. On December 14, 1993, Vitro and the Company reached an
agreement in principle whereby, in two separate transactions, Vitro purchased
in December 1993 the shares of capital stock of Vitro Corning owned by the
Company and the Company will purchase in early 1994 the shares of capital
stock of Corning Vitro owned by Vitro. The net cost to Corning of the two
transactions will be $131 million. Corning and Vitro will continue their
consumer products alliance through cross distribution and supply agreements.
Corning will finance the payment to Vitro with a portion of the proceeds of
the Offering.
The change in the ownership structure of Corning Vitro and Vitro Corning will
allow each such company to concentrate on its respective businesses without
the complexities of managing two different operations in rapidly changing
markets. The positive aspects of the Vitro and Corning alliance will be
continued through cross distribution and supply agreements.
Acquisition of Damon. In August 1993 Corning acquired all of the outstanding
shares of common stock of Damon in a transaction accounted for as a purchase.
The total purchase price of this transaction was approximately $405 million,
including acquisition expenses. In addition, approximately $167 million of
indebtedness of Damon has been refinanced. Corning has financed the
acquisition of Damon and the refinancing of Damon's debt with short-term
financing agreements entered into with certain commercial banks.
Approximately $200 million of such short-term financing has been retired with
the proceeds from the issuance of long-term debt of the Company. Corning
intends to retire a significant portion of the remaining acquisition debt
with the net proceeds of an offering of equity securities during 1994.
Damon's principal line of business is clinical-laboratory testing, providing
to the medical profession a full range of routine and esoteric testing
services that are used in the diagnosis, monitoring and treatment of disease.
Damon provides its services to physicians, hospitals, nursing homes, managed
care institutions, corporations and governmental agencies, including agencies
of the United States of America.
For the year ended December 31, 1992 Damon reported total sales of $317
million and net income of $18 million. For the first half 1993 Damon
announced total sales of $170.8 million and net income of $2.4 million. The
lower first half 1993 net income was primarily due to the increase in
operating expenses caused by two late 1992 acquisitions and severe weather in
February and March 1993. Certain historical financial statements of Damon are
included in Corning's Current Reports on Form 8-K dated August 4, 1993 and
August 13, 1993 which are incorporated herein by reference. See
"Capitalization" and "Unaudited Pro Forma Combined Financial Information".
Acquisition of Costar. In September 1993 Corning acquired Costar for
approximately 5.5 million shares of Corning Common Stock and options to
purchase approximately 300,000 shares of Corning Common Stock. The Costar
merger has been accounted for as a pooling of interests for accounting and
financial reporting purposes. Corning's consolidated financial statements
have not been restated because the acquisition is not material to Corning's
financial position or results of operations.
Costar is a developer, manufacturer and marketer of disposable plastic,
filtration and other products used in life science laboratories throughout
the world, primarily for cell culture, immunology/molecular biology,
filtration and other basic laboratory procedures. Costar's laboratory
products, which currently account for more than 80% of net sales, are used
principally in life science research laboratories in colleges, universities,
medical schools, teaching hospitals, government agencies, private research
foundations and pharmaceutical and biotechnology companies. In addition to
its laboratory products business, Costar develops, manufactures and sells
process filtration products used primarily in the semiconductor industry for
the purification of deionized water. Costar is also engaged in the
distribution in Europe of laboratory-related products manufactured by others.
For the year ended December 31, 1992, Costar reported total sales of $74.9
million and net income of $6.1 million. For the first half 1993 Costar has
announced total sales of $40.2 million and net income of $3.1 million. See
"Capitalization" and "Unaudited Pro Forma Combined Financial Information".
Unilab Reorganization. Prior to November 1993, Corning, through a wholly
owned subsidiary, owned 43% of Unilab. In November 1993, Corning acquired 100
percent of certain Unilab facilities in
<PAGE>
exchange for a majority of the Unilab shares owned by Corning, the assumption
of approximately $70 million of Unilab debt and Corning's investment in J.S.
Pathology. Corning retained a 12% equity investment in Unilab.
Breast Implant Litigation. Corning continues to be named as a defendant in
two types of cases previously reported involving the silicone-gel breast
implant products or materials formerly manufactured or supplied by Dow
Corning or a Dow Corning subsidiary. These cases include (1) several
purported securities class action lawsuits and shareholder derivative
lawsuits filed against Corning by shareholders of Corning alleging, among
other things, misrepresentations and omissions of material facts, breach of
duty to shareholders and waste of corporate assets relative to the
silicone-gel breast implant business conducted by Dow Corning and (2) as of
December 13, 1993 over 4,000 lawsuits filed in various state courts against
Corning and others (including Dow Corning) by persons claiming injury from
the silicone-gel breast implant products or materials formerly manufactured
by Dow Corning or a Dow Corning subsidiary. Several of such suits have been
styled as class actions and others involve multiple plaintiffs. All of the
tort lawsuits filed against Corning in federal courts had been ordered
consolidated in the United States District Court, Northern District of
Alabama. In early December 1993, Corning was dismissed from the more than
3,000 cases pending in such federal courts. The decision by the District
Court is non-appealable and, although the District Court noted that it was
"highly unlikely" that additional discovery would produce new evidence, the
decision is subject to reconsideration if additional information is
discovered or if there is a change in state law. Certain state court cases
against Corning have been consolidated, for the purposes of discovery and
pretrial matters. The securities suits are all pending in the United States
District Court for the Southern District of New York.
Corning's management does not believe that the purported securities class
action lawsuits or the purported shareholder derivative lawsuits or the tort
actions filed against Corning described above will have a material adverse
effect on Corning's financial condition or the results of its operations.
Dow Corning has informed Corning that as of October 15, 1993, Dow Corning has
been named in 41 purported breast implant product liability class action
lawsuits and approximately 9,000 individual breast implant product liability
lawsuits (which number includes all or substantially all of the 4,000
lawsuits referred to above) and that Dow Corning anticipates that it will be
named as a defendant in additional breast implant lawsuits in the future. Dow
Corning has also stated that it is vigorously defending this litigation.
Verdicts in breast implant litigation against Dow Corning and other
defendants which have gone to judgment have varied widely, ranging from
dismissal to the award of significant compensatory and punitive damages.
Dow Corning has also informed Corning that Dow Corning believes that a
substantial portion of the indemnity and defense costs related to the breast
implant litigation brought and to be brought against it is and will be
covered by product liability insurance available to it but that the insurance
companies issuing the policies in question have reserved the right to deny
coverage under various theories and in many cases have refused to pay defense
and indemnity costs which have been incurred by Dow Corning. In this regard,
on June 30, 1993, Dow Corning instituted litigation in California against
certain insurance companies which had issued product liability insurance
policies to it from 1962 through 1985 seeking declaratory judgments that the
insurance company defendants are liable to indemnify Dow Corning for such
liabilities and costs and, in the case of certain insurance company
defendants, damages including punitive damages. In September, 1993, several
of Dow Corning's insurers filed a complaint against Dow Corning and other
insurers for declaratory relief in Michigan and moved for the action brought
by Dow Corning in California to be dismissed in favor of the Michigan
litigation. On October 1, 1993, this motion was granted. Corning understands
that, in light of this ruling, Dow Corning has elected to litigate coverage
issues on breast implant product liability lawsuits and claims in the
Michigan proceeding. Notwithstanding the pendency of this litigation, Dow
Corning expects to continue negotiations with such insurance companies to
obtain an agreement on a formula for the allocation among these insurers of
payments of defense and indemnity expenses related to breast implant products
liability lawsuits and claims.
On September 9, 1993, Dow Corning announced that representatives of
plaintiffs and defendants involved with silicone breast implant litigation
have developed a "Statement of Principles for Global Resolution of Breast
Implant Claims" (the "Statement of Principles"). The Statement of Principles
summarizes a proposed resolution of all claims arising out of breast implants
which have been or could be asserted against various implant manufacturers,
suppliers, physicians and hospitals (the "Proposed Settlement").
The Statement of Principles does not constitute an agreement and a number of
issues remain to be resolved before a tentative settlement agreement can be
reached.
<PAGE>
Under the Proposed Settlement, if implemented, industry participants,
including manufacturers, raw materials suppliers, physicians, hospitals and
other health care providers (the "Funding Participants") would contribute up
to $4.75 billion over a period of thirty years to establish several special
purpose funds. The specific participants and their respective contributions
to this fund are currently under negotiation. The Proposed Settlement, if
implemented, would be a claims-based structured resolution of all claims
arising out of silicone breast implants. The Proposed Settlement, if
implemented, would establish several special purpose funds and define the
circumstances under which payments from the funds would be made. The Proposed
Settlement includes provisions for (a) class membership and the ability of
plaintiffs to opt out of the class, (b) the establishment of defined funds
for medical diagnostic/evaluation procedures, explanation, ruptures,
compensation for specific diseases and administration, (c) payment terms and
timing and (d) claims administration. The Proposed Settlement defines periods
during which breast implant plaintiffs may elect not to settle their claims
by way of the Proposed Settlement and continue their individual breast
implant litigation against manufacturers and other defendants (the "Opt Out
Plaintiffs"). In certain circumstances, if any defendant who is a Funding
Participant considers the number of Opt Out Plaintiffs maintaining lawsuits
against such defendant to be excessive, such defendant can withdraw from
participation in the Proposed Settlement. Dow Corning is currently
negotiating with other potential parties to the Proposed Settlement to reach
a tentative settlement agreement conceptually similar to the Statement of
Principles.
Corning has been informed that Dow Corning's management believes that a
settlement incorporating concepts underlying the Statement of Principles
would be a responsible and cost efficient approach to resolving breast
implant litigation against Dow Corning. Corning understands that Dow Corning
is currently evaluating the Proposed Settlement in that light and believes
that it would be viable only if, among other things, (a) an acceptable
agreement as to allocation of liability under the Proposed Settlement among
Funding Participants can be reached, (b) adequate insurance support is
provided to Funding Participants by their insurance carriers and (c) the
number of Opt Out Plaintiffs is minimal.
If the tort actions filed against Dow Corning or any settlement of the breast
implant controversy should require Dow Corning to record any charges against
income in addition to the charge described in the following paragraph, the
effect on Corning of any such charges would be limited to its consequent
impact (in the amount of approximately 50% of the amount thereof) on
Corning's reported equity in earnings of associated companies for the period
such loss is recognized, on the book value of Corning's equity investment in
Dow Corning and on Corning's retained earnings. Corning does not believe that
its share of any additional charge taken by Dow Corning resulting from the
proposed settlement will have a material adverse effect upon Corning's
financial condition. However, it is possible that Corning's share of any such
charge taken by Dow Corning will have a material adverse effect upon
Corning's earnings in the quarter in which any such charge is recognized by
Dow Corning.
Charges Announced by Dow Corning and by Corning on January 14, 1994. On
January 14, 1994, Dow Corning announced that it would take a pre-tax charge
against earnings for the fourth quarter of 1993 of $640 million ($415 million
after-tax) to reflect its best estimate, as of that date, of the net present
value of its potential liability and costs, net of the recoveries it expects
to receive from its insurance carriers, as a result of its involvement in the
breast implant litigation. Dow Corning noted in this announcement that, as
breast implant litigation settlement negotiations continue additional facts
and circumstances may develop which may require Dow Corning to revise this
estimate or to make additional provisions to reflect any additional costs of
resolving this matter.
On that same date, Corning announced that, as a result of Dow Corning's
decision to take this charge, Corning would record a charge of $203 million
after-tax against its equity in earnings of associated companies for the
fourth quarter of 1993 and against the carrying value of its investment in
Dow Corning at the end of fiscal 1993.
Other Dow Corning Matters. Dow Corning received a request dated July 9, 1993
from the Boston Regional Office of the Commission for certain documents and
information related to silicone breast implants. The request states that the
Boston Regional Office is conducting an informal investigation which
"concerns Dow Corning, its subsidiary Dow Corning Wright and parent
corporations, Dow Chemical Co. and Corning Inc." Dow Corning has informed
Corning that Dow Corning has responded to this request enclosing the
documents and information requested along with related information.
During the first quarter of 1993, Dow Corning received two federal grand jury
subpoenas initiated by the DOJ seeking documents and information related to
silicone breast implants. Dow Corning has informed Corning that it has
delivered the documents and information requested.
<PAGE>
Department of Justice Investigation. In September, 1993, MetPath and MetWest
Inc. ("MetWest"), a wholly-owned subsidiary of Unilab, in which Corning had
at the time an interest of approximately 43%, entered into a Settlement
Agreement (the "Settlement Agreement") with the DOJ and the Inspector
General. Pursuant to the Settlement Agreement, MetPath and MetWest paid to
the United States a total of $39.8 million in settlement of civil claims by
the DOJ and the Inspector General that MetPath and MetWest had fraudulently
induced physicians to order certain laboratory tests from them without
realizing that such tests would be billed to Medicare at rates higher than
those such physicians believed were applicable.
Unilab's portion of the total payment under the Settlement Agreement was
approximately $4.8 million. In November of 1993, Unilab was reorganized into
two companies; one wholly-owned by CLSI which continues to own MetWest and
one publicly-owned in which CLSI retains an interest of approximately 12%. Of
the total of approximately $4.8 million paid by Unilab under the Settlement
Agreement, responsibility for approximately $2.4 million was allocated in
this reorganization to the successor company which is wholly owned by CLSI.
Certain state and private insurers, as well as the Federal Civilian Health
and Medical Program for the Uniformed Services, have questioned the practices
which were covered by the Settlement Agreement and it is not clear at this
time what, if any, additional exposure Corning may have to these entities and
to other persons which may assert claims on the basis of these or other
practices.
During August, 1993, MetPath, MetWest and Damon (which was acquired by
Corning in that month) together with other participants in the industry
received subpoenas from the Inspector General seeking information regarding
their practices with respect to 14 enumerated tests offered in conjunction
with automated chemical test panels. Of these 14 tests, 5 were covered by the
Settlement Agreement and consequently MetPath and MetWest are not being
required to provide further information with regard to them. MetPath, MetWest
and Damon are in the process of complying with these subpoenas. The results
of these investigations cannot currently be predicted but the possibility
that they may result in additional claims by or settlements with parties
other than the DOJ and the Inspector General cannot be excluded.
Other Legal Proceedings. During September, 1993, two individuals filed in the
Supreme Court of the State of New York (one in New York County and one in
Suffolk County) separate purported derivative actions against Corning, as
nominal defendant, and Corning's Directors and certain of its officers
seeking on behalf of Corning compensatory and punitive damages in unspecified
amounts (and plaintiff's costs and disbursements including attorneys' and
experts' fees) by reason of the alleged responsibility of the actual
defendants for the conduct which gave rise to the settlement in the MetPath
litigation described above and their alleged failure to cause Corning to make
timely disclosure thereof.
Corning understands that the plaintiffs in these two actions have agreed to
consolidate them in a single action before the Supreme Court of the State of
New York in New York County.
During October, 1993, two individuals instituted in the United States
District Court for the Southern District of New York purported class actions
on behalf of purchasers of Corning securities in the open market during the
period from September 17 to October 6, 1993 against Corning, certain of its
Directors and officers and the underwriters of Corning's offering, on
September 17, 1993, of $100 million of 6.75% Debentures due on September 15,
2013. The complaints generally allege that the defendants failed to make
timely disclosures of adverse developments in Corning's business and seek
compensatory and punitive damages in unspecified amounts (and plaintiff's
costs and expenses including attorney's fees and disbursements).
Corning understands that the plaintiffs in these two actions have agreed to
consolidate them.
Corning's management does not believe that the purported class action
lawsuits or the purported shareholder derivative lawsuits described above
will have a material adverse effect on Corning's financial condition or the
results of its operations.
DESCRIPTION OF CAPITAL STOCK
General
The following is a brief summary of certain provisions of the Company's
Restated Certificate of Incorporation, as amended (the "Restated
Certificate"), and does not relate to or give effect to provisions of
statutory or other law except as specifically stated. The Restated
Certificate authorizes the issuance of 500,000,000 shares of Common Stock and
10,000,000 shares of Series Preferred Stock, par value $100
<PAGE>
per share (the "Series Preferred Stock"). Of the Series Preferred Stock,
600,000 shares have been designated Series A Junior Participation Preferred
Stock (the "Series A Preferred Stock") and 316,822 shares have been
designated Series B Cumulative Convertible Preferred Stock (the "Series B
Preferred Stock"). As of January 2, 1994, 200,491,721 shares of Common Stock,
no shares of Series A Preferred Stock and 261,812 shares of Series B
Preferred Stock were outstanding.
Common Stock
The rights of holders of Common Stock are governed by the Restated
Certificate and the Company's By-Laws and by the New York Business
Corporation Law (the "NYBCL").
Voting Rights
Subject to the voting of any shares of Series Preferred Stock that may be
outstanding, voting power is vested in the Common Stock, each share having
one vote.
Preemptive Rights
The Restated Certificate provides that no holder of Common Stock or Series
Preferred Stock of the Company shall have any preemptive rights except as the
Board of Directors of the Company may determine from time to time. No such
rights have been granted by the Board of Directors of the Company.
Liquidation Rights
Subject to the preferential rights of any outstanding Series Preferred Stock,
in the event of any liquidation of the Company, holders of Common Stock then
outstanding are entitled to share ratably in the assets of the Company
available for distribution to such holders.
Dividend Rights and Restrictions
Subject to any preferential rights of any outstanding Series Preferred Stock,
such dividends as may be determined by the Board of Directors may be declared
and paid on the Common Stock from time to time out of any funds legally
available therefor. The Company has regularly paid cash dividends since 1881
and currently expects to continue to pay cash dividends. The Company's
current quarterly cash dividend is $.17 per share of Common Stock. The
continued declaration of dividends by the Board of Directors of the Company
is subject to, among other things, the Company's current and prospective
earnings, financial condition and capital requirements and such other factors
as the Board of Directors may deem relevant.
Other Provisions
The Common Stock has no redemption, sinking fund or conversion privileges
applicable thereto and holders of Common Stock are not liable to assessments
or to further call.
Series Preferred Stock
The Restated Certificate authorizes the issuance of up to 10,000,000 shares
of Series Preferred Stock. The Company's Board of Directors has the authority
to issue such shares from time to time, without stockholder approval, and the
authority to determine the designations, preferences, rights, including
voting rights, and restrictions of such shares, subject to the NYBCL.
Pursuant to this authority, the Board of Directors has designated 600,000
shares of Series Preferred Stock as Series A Preferred Stock, and 500,000
shares of Series Preferred Stock as Series B Preferred Stock. No other class
of Series Preferred Stock has been designated by the Board of Directors.
Series B Preferred Stock
Cumulative cash dividends at the rate of 8% per annum are payable on shares
of Series B Preferred Stock which have been issued. The Company has regularly
paid dividends on the Series B Preferred Stock. No dividends may be paid or
declared on the Series A Preferred Stock or the Common Stock unless all
dividends for all prior dividend periods have been paid or declared on the
Series B Preferred Stock.
Holders of Series B Preferred Stock are entitled to vote, voting together
with the Common Stock and not as a separate class, on all matters submitted
to holders of the Common Stock, each share of Series B Preferred Stock having
four votes, subject to adjustment.
Holders of Series B Preferred Stock have no preemptive rights. In the event
of a liquidation, dissolution or winding up of the Company, holders of Series
B Preferred Stock shall be entitled to receive a distribution in the amount
of $100 per share, plus accrued and unpaid dividends, before any distribution
on the Common Stock or Series A Preferred Stock.
<PAGE>
The Series B Preferred Stock is redeemable, in whole or in part, at the
election of the Company, at any time, at the following redemption prices per
share:
<TABLE>
<CAPTION>
During the Twelve-
Month Period Price Per
Beginning October 1, Share
------------------------- ---------
<S> <C>
1993 $104.00
1994 $103.00
1995 $102.00
1996 $101.00
</TABLE>
and thereafter at $100.00 per share and, in each case, plus accrued and
unpaid dividends.
The Series B Preferred Stock is subject to mandatory redemption, at the
option of the holder, at any time upon five business days notice, at a
redemption price equal to $100 plus accrued and unpaid dividends, if the
proceeds are necessary (i) to make a distribution pursuant to an investment
election made under the employee benefit plan or (ii) to satisfy any
indebtedness to which the employee benefit plan is subject provided that such
payment is necessary to remedy or prevent a default under such indebtedness.
The Company, at its option, may make payment of the redemption price required
upon redemption of shares of Series B Preferred Stock in cash or in shares of
Common Stock, or in any combination of such shares and cash.
The Series B Preferred Stock is convertible at the option of the holder, at
any time, into Common Stock at a conversion price of $25 per share of Common
Stock, each share of Series B Preferred Stock being valued at $100 for the
purpose of such conversion, producing a conversion ratio equal to four shares
of Common Stock for each share of Series B Preferred Stock so converted,
subject to certain adjustments to prevent dilution.
Preferred Share Purchase Rights
Attached to each share of Common Stock sold in the Offering will be one
preferred share purchase right (a "Right") for each outstanding share of
Common Stock. Each Right entitles the registered holder to purchase from the
Company one four-hundredth of a share of Series A Preferred Stock at a price
of $62.50 per one four-hundredth of a share of Series A Preferred Stock (the
"Exercise Price"), subject to adjustment. The Rights will expire on July 15,
1996 (the "Final Expiration Date"), unless the Final Expiration Date is
extended or unless the Rights are earlier redeemed by the Company.
The Rights will be represented by the certificates for Common Stock, will not
be exercisable, and will not be transferable apart from the Common Stock,
until the earlier of (i) ten days following the public announcement by the
Company or an Acquiring Person, as defined below, that a person or group has
acquired beneficial ownership of 20% or more of the Company's Common Stock
(an "Acquiring Person") or (ii) ten business days (or such later date as the
Board of Directors may determine) after the commencement or first public
announcement of a tender or exchange offer that would result in a person or
group beneficially owning 20% or more of the Company's outstanding Common
Stock (the earlier of such dates being called the "Distribution Date").
Separate certificates for the Rights will be mailed to holders of record of
the Common Stock as of such date. The Rights could then begin trading
separately from the Common Stock.
Generally, in the event that a person or group becomes an Acquiring Person,
each Right, other than the Rights owned by the Acquiring Person, will
thereafter entitle the holder to receive, upon exercise of the Right, Common
Stock having a value equal to two times the Exercise Price of the Right. In
the event that the Company is acquired in a merger, consolidation, or other
business combination transaction or more than 50% of the Company's assets,
cash flow or earning power is sold or transferred, each Right, other than the
Rights owned by an Acquiring Person, will thereafter entitle the holder
thereof to receive, upon the exercise of the Right, common stock of the
surviving corporation having a value equal to two times the Exercise Price of
the Right.
The Rights are redeemable in whole, but not in part, at $.0125 per Right at
any time on or prior to any person or group becoming an Acquiring Person,
provided that the Rights may no longer be redeemed if such person or group
shall have acquired beneficial ownership of 90% or more of the Common Stock.
The right to exercise the Rights terminates at the time that the Board of
Directors elects to redeem the Rights. Notice of redemption shall be given by
mailing such notice to the registered holders of the Rights. At no time will
the Rights have any voting rights. The Rights Agent is Harris Trust and
Savings Bank (the "Rights Agent").
<PAGE>
The exercise price payable, and the number of shares of Series A Preferred
Stock or other securities or property issuable, upon exercise of the Rights
are subject to adjustment from time to time to prevent dilution (i) in the
event of a stock dividend on, or a subdivision, combination or
reclassification of, the shares of Series A Preferred Stock, (ii) upon the
grant to holders of the shares of Series A Preferred Stock of certain rights
or warrants to subscribe for or purchase shares of Series A Preferred Stock
at a price, or securities convertible into shares of Series A Preferred Stock
with a conversion price, less than the then current market price of the
shares of Series A Preferred Stock or (iii) upon the distribution to holders
of the shares of Series A Preferred Stock of evidences of indebtedness or
assets (excluding regular periodic cash dividends paid out of earnings or
retained earnings or dividends payable in shares of Series A Preferred Stock)
or of subscription rights or warrants (other than those referred to above).
The number of outstanding Rights and the number of one four-hundredths of a
share of Series A Preferred Stock issuable upon exercise of each Right are
also subject to adjustment in the event of a stock split of, or stock
dividend on, or subdivision, consolidation or combination of, the Common
Stock prior to the Distribution Date. With certain exceptions, no adjustment
in the exercise price will be required until cumulative adjustments require
an adjustment of at least 1% in such exercise price.
Upon exercise of the Rights, no fractional shares of Series A Preferred Stock
will be issued (other than fractions which are integral multiples of one
four-hundredth of a share, which may, at the election of the Company, be
evidenced by depositary receipts) and in lieu thereof an adjustment in cash
will be made.
The Rights have certain anti-takeover effects. The Rights may cause
substantial dilution to a person or group that attempts to acquire the
Company on terms not approved by the Board of Directors of the Company,
except pursuant to an offer conditioned on a substantial number of Rights
being acquired. The Rights should not interfere with any merger or other
business combination approved by the Board of Directors since the Rights may
be redeemed by the Company at $.0125 per Right prior to the fifteenth day
after the acquisition by a person or group of beneficial ownership of 20% or
more of the Common Stock (subject to certain exceptions).
The shares of Series A Preferred Stock purchasable upon exercise of the
Rights will rank junior to all other series of the Company's Preferred Stock
or any similar stock that specifically provide that they shall rank prior to
the shares of Series A Preferred Stock. The shares of Series A Preferred
Stock will be nonredeemable. Each share of Series A Preferred Stock will be
entitled to a minimum preferential quarterly dividend of $10 per share, but
will be entitled to an aggregate dividend of 100 times the dividend declared
per share of Common Stock. In the event of liquidation, the holders of the
shares of Series A Preferred Stock will be entitled to a minimum preferential
liquidation payment of $100 per share, but will be entitled to an aggregate
payment of 100 times the payment made per share of Common Stock. Each share
of Series A Preferred Stock will have 100 votes, voting together with the
Common Stock. In the event of any merger, consolidation or other transaction
in which Common Stock is exchanged, each share of Series A Preferred Stock
will be entitled to receive 100 times the amount and type of consideration
received per share of Common Stock. These rights are protected by customary
antidilution provisions. Because of the nature of the Series A Preferred
Stock's dividend, liquidation and voting rights, the value of the interest in
a share of Series A Preferred Stock purchasable upon the exercise of each
Right should approximate the value of one share of Common Stock.
The foregoing description of the Rights does not purport to be complete and
is qualified in its entirety by reference to the description of the Rights
contained in the Rights Agreement, dated as of July 2, 1986 between the
Company and the Rights Agent, as amended by the Amended Rights Agreement,
dated as of October 4, 1989, included as an exhibit to this Registration
Statement.
Corning's Fair Price Amendment
In 1985, the Company's stockholders adopted an amendment (the "Fair Price
Amendment") to the Company's Restated Certificate that, in general, requires
the approval by the holders of at least 80% of the voting power of the
outstanding capital stock of the Company entitled to vote generally in the
election of directors (the "Voting Stock") as a condition for mergers and
certain other business combinations with any beneficial owner of more than
10% of such voting power unless (1) the transaction is approved by at least a
majority of the Continuing Directors or (2) certain minimum price, form of
consideration and procedural requirements are met. Certain terms used herein
are defined in the Company's Restated Certificate.
<PAGE>
Amendment or repeal of this provision or the adoption of any provision
inconsistent therewith would require the affirmative vote of at least 80% of
the Voting Stock unless the proposed amendment or repeal or the adoption of
the inconsistent provisions were approved by two-thirds of the entire Board
of Directors and a majority of the Continuing Directors.
Certain Other Provisions of the Restated Certificate and By-Laws
In addition to the Preferred Share Purchase Rights and the Fair Price
Amendment, the Restated Certificate and By-Laws contain other provisions that
may discourage a third party from seeking to acquire the Company or to
commence a proxy contest or other takeover-related action. The Company has
classified its Board of Directors such that one-third of the Board is elected
each year to three-year terms of office. In addition, holders of Common Stock
may remove a Director from office at any time prior to the expiration of his
or her term only with cause and by vote of a majority of Common Stock
outstanding. These provisions, together with provisions concerning the size
of the Board and requiring that premature vacancies on the Board be filled
only by a majority of the entire Board, may not be amended, altered or
repealed, nor may the Company adopt any provisions inconsistent therewith,
without the affirmative vote of at least 80% of the Voting Stock of the
Company or the approval of two-thirds of the entire Board of Directors.
The Company's By-Laws contain certain procedural requirements with respect to
the nomination of directors by stockholders that require, among other things,
delivery of notice by such stockholders to the Secretary of the Company not
later than 60 days nor more than 90 days prior to the date of the
stockholders meeting at which such nomination is to be considered. The
By-Laws do not provide that a meeting of the Board of Directors may be called
by stockholders.
The Restated Certificate provides that no director will be liable to the
Company or its stockholders for a breach of duty as a director except as
provided by the NYBCL.
The effect of these provisions may be to deter attempts either to obtain
control of the Company or to acquire a substantial amount of its stock, even
if such a proposed transaction were at a significant premium over the
then-prevailing market value of the Common Stock, or, to deter attempts to
remove the Board of Directors and management of the Company, even though some
or a majority of the holders of Common Stock may believe such actions to be
beneficial.
UNDERWRITING
Subject to the terms and conditions of the Underwriting Agreement, the
Company has agreed to sell to Goldman, Sachs & Co. ("Goldman Sachs"), and
Goldman Sachs has agreed to purchase all of the shares of Common Stock
offered hereby.
Under the terms and conditions of the Underwriting Agreement, Goldman Sachs
is committed to take and to pay for all of the shares offered hereby, if any
are taken.
It is expected that all or a substantial portion of the shares of Common
Stock may be sold by Goldman Sachs to institutional purchasers in one or more
transactions (which may involve block transactions) on the NYSE or otherwise.
The distribution of the shares of Common Stock may also be effected from time
to time in special offerings, exchange distributions and/or secondary
distributions in accordance with the rules of the NYSE, in the
over-the-counter market, in negotiated transactions through the writing of
options on shares of Common Stock (whether such options are listed on an
options exchange or otherwise) or otherwise, or in a combination of such
methods of sale, in each case at market prices prevailing at the time of
sale, at prices related to such prevailing market prices or at negotiated
prices. Goldman Sachs may effect such transactions by selling shares of
Common Stock to or through dealers, and such dealers may receive compensation
in the form of discounts, concessions or commission from Goldman Sachs and/or
the purchasers of such shares of Common Stock for whom they may act as agent
or to whom they may sell as principal.
In connection with the sale of the shares of Common Stock, Goldman Sachs will
receive compensation from the Company in the form of commissions and may
receive compensation from purchasers of the shares of Common Stock for whom
they may act as agents or to whom they may sell as principals in the form of
commissions or discounts, in each case in amounts which will not exceed those
customary in the types of transactions involved. Underwriters and dealers
that participate in the distribution of the shares of Common Stock may be
deemed to be underwriters, and any discounts or commissions received by them
from the Company and any compensation received by them on the resale of the
shares of Common Stock by them may be deemed to be underwriting discounts and
commissions under the Securities Act.
<PAGE>
For a period of 90 days after the date of this Prospectus, the Company has
agreed not to offer, sell, contract to sell or otherwise dispose of any
shares of Common Stock of the Company or any security substantially similar
thereto, or any other security convertible into, or exchangeable for, shares
of Common Stock of the Company or any security substantially similar thereto,
without the prior written consent of Goldman Sachs, except for any securities
issued by the Company pursuant to employee benefit plans, dividend
reinvestment plans, mergers, acquisitions or similar transactions, or upon
the conversion of convertible or exchangeable securities currently
outstanding.
Goldman Sachs is a defendant in lawsuits with respect to the offering by
Corning of $100 million of 6.75% Debentures due September 15, 2013. See
"Business--Recent Developments--Other Legal Proceedings".
The Company has agreed to indemnify Goldman Sachs against certain
liabilities, including liabilities under the Securities Act.
VALIDITY OF COMMON STOCK
The validity of the shares of Common Stock offered hereby is being passed
upon for the Company by William C. Ughetta, Esq., Senior Vice President and
General Counsel of the Company, and for the Underwriter by Sullivan &
Cromwell, New York, New York. Mr. Ughetta owns substantially less than 1% of
the outstanding shares of Common Stock.
EXPERTS
The consolidated financial statements of the Company and of Dow Corning
incorporated in this Prospectus by reference to the Company's 1992 Annual
Report on Form 10-K for the year ended January 3, 1993, have been so
incorporated in reliance on the reports of Price Waterhouse, independent
accountants, given on the authority of said firm as experts in auditing and
accounting.
The consolidated financial statements of Damon, as of December 31, 1992 and
1991, and for each of the three years ended December 31, 1992, incorporated
by reference in this Prospectus by reference to Corning's Current Report on
Form 8-K dated August 4, 1993 have been so incorporated in reliance on the
report of Arthur Andersen & Co., independent public accountants, given on the
authority of said firm as experts in accounting and auditing.
<PAGE>
<PAGE>
No person has been authorized to give any information or to make any
representations other than those contained in this Prospectus, and, if given
or made, such information or representations must not be relied upon as
having been authorized. This Prospectus does not constitute an offer to sell
or the solicitation of an offer to buy any securities other than the
securities to which it relates or an offer to sell or the solicitation of an
offer to buy such securities in any circumstances in which such offer or
solicitation is unlawful. Neither the delivery of this Prospectus nor any
sale made hereunder shall, under any circumstances, create any implication
that there has been no change in the affairs of the Company since the date
hereof or that the information contained herein is correct as of any time
subsequent to its date.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
-----
<S> <C>
Available Information 2
Incorporation of Certain Documents by
Reference 2
Prospectus Summary 3
Use of Proceeds 7
Capitalization 7
Market Prices of Common Stock and
Dividends 8
Selected Consolidated Financial Data 8
Unaudited Pro Forma Combined Financial
Information 11
Management's Discussion and Analysis
of Financial Condition and Results
of Operations 17
Business 26
Description of Capital Stock 31
Underwriting 35
Validity of Common Stock 36
Experts 36
</TABLE>
8,000,000 Shares
Corning Incorporated
Common Stock
(par value $.50 per share)
Goldman, Sachs & Co.
<PAGE>
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth the estimated expenses to be incurred in
connection with the distribution of the securities to be registered, other
than underwriting discounts and commissions. The Company will pay the
following expenses:
<TABLE>
<CAPTION>
<S> <C>
Registration Fee--Securities and Exchange
Commission $ 75,271
Filing Fee--New York Stock Exchange 25,650
Legal Fees 50,000
Printing Fees 70,000
Accounting Fees 40,000
Blue Sky Fees and Expenses 12,000
Miscellaneous 7,079
------
Total $280,000
======
</TABLE>
Item 15. Indemnification of Directors and Officers.
Sections 722 and 723 of the Business Corporation Law of the State of New York
(the "BCL") provide that a corporation may indemnify its current and former
directors and officers under certain circumstances.
Article VIII of the Company's By-Laws provides that the Company shall
indemnify each director and officer against all costs and expenses actually
and reasonably incurred by him in connection with the defense of any claim,
action, suit or proceeding against him by reason of his being or having been
a director or officer of the registrant to the full extent permitted by, and
consistent with, the BCL.
Item 16. Exhibits.
<TABLE>
<CAPTION>
Number Description
- -------- -------------------------------------------------------------------------------------------------
<S> <C>
1.1 Form of Underwriting Agreement
3.1 Restated Certificate of Incorporation, dated July 12, 1989, and the Certificate of Amendment,
dated September 28, 1989, of the Restated Certificate of Incorporation of the Registrant
(incorporated by reference to Exhibit 3(a) of the Registrant's Annual Report on Form 10-K for
the fiscal year ended December 31, 1989)
3.2 By-laws of the Registrant (incorporated by reference to Exhibit 3(a) of the Registrant's Annual
Report on Form 10-K for the fiscal year December 30, 1990)
3.3 Certificate of Amendment, dated April 30, 1992, of the Restated Certificate of Incorporation of
the Registrant (incorporated by reference to Exhibit 3(a) of the Registrant's Annual Report on
Form 10-K for the fiscal year ended January 3, 1993)
4.1 Form of Common Stock Certificate (incorporated by reference to Exhibit 4 to Registration
Statement on Form S-4 filed with the Commission on June 17, 1992 (Registration Statement No.
33-48488))
4.2 Rights Agreement, dated as of July 2, 1986, between Corning Incorporated and Harris Trust and
Savings Bank, as amended (incorporated by reference to Exhibit 1 to Registration Statement on
Form 8-A, filed with the Commission on July 2, 1986 and Exhibit 1 to Amendment No. 1 on Form 8,
filed with the Commission on October 10, 1989)
4.3 Form of Preferred Share Purchase Right (included in Exhibit 4.2)
5.1 Opinion of William C. Ughetta, Esq., Senior Vice President and General Counsel
23.1 Consent of Price Waterhouse, independent accountants
23.2 Consent of Arthur Andersen, independent public accountants
23.3 Consent of William C. Ughetta, Esq. (included in Exhibit 5.1)
24.1 Powers of Attorney
</TABLE>
Item 17. Undertakings.
The Company hereby undertakes (1) to file, during any period in which offers
or sales are being made, a post-effective amendment to this Registration
Statement; (i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1993; (ii) to reflect in the prospectus any facts or events
arising after the effective date of this Registration Statement (or the most
recent post-effective amendment thereto) which, individually or in the
aggregate, represent a fundamental change in the information set forth in the
Registration Statement; and (iii) to include any material information with
respect to the plan of distribution
<PAGE>
not previously disclosed in this Registration Statement or any material
change to such information in the Registration Statement; provided, however,
that paragraphs (1)(i) and (1)(ii) do not apply if the information required
to be included in a post-effective amendment thereby is contained in periodic
reports filed by the Company pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
Registration Statement; (2) that, for the purpose of determining any
liability under the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof; (3) to remove
from registration by means of post-effective amendment any of the securities
being registered which remain unsold at the termination of the offering; and
(4) that, for purposes of determining any liability under the Securities Act
of 1933, each filing of the Company's annual report pursuant to Section 13(a)
or Section 15(d) of the Securities Exchange Act of 1934 that is incorporated
by reference in this Registration Statement shall be deemed to be a new
Registration Statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
The Company hereby undertakes that, (1) for purposes of determining any
liability under the Securities Act, the information omitted from the form of
prospectus filed as part of this registration statement in reliance upon Rule
430A and contained in a form of prospectus filed by the registrant pursuant
to Rule 424(b)(1) or (4) or 497(h) under the Securities Act of 1933 shall be
deemed to be part of this registration statement as of the time it was
declared effective; and (2) for purposes of determining any liability under
the Securities Act of 1933, each post-effective amendment that contains a
form of prospectus shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of
the Company pursuant to the foregoing provisions, or otherwise, the Company
has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in such
Act and is, therefore, unenforceable. In the event a claim for
indemnification against such liabilities (other than the payment by the
Company of expenses incurred or paid by a director, officer or controlling
person of the Company in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Company will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in such Act
and will be governed by the final adjudication of such issue.
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant,
Corning Incorporated, a New York corporation, certifies that it has
reasonable grounds to believe it meets all the requirements for filing on
Form S-3 and has duly caused this Amendment to Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Corning, State of New York, on the 18th day of January, 1994.
Corning Incorporated
(Registrant)
by /s/ William C. Ughetta
William C. Ughetta, Senior Vice President
Pursuant to the requirements of the Securities Act of 1933 this Amendment to
Registration Statement has been signed below on January 18, 1994 by the
following persons in the capacities indicated:
<TABLE>
<CAPTION>
Signature Capacity
- -------------------------- -------------------------------------------------
<S> <C>
/s/ James R. Houghton Chairman of the Board, Principal Executive
(James R. Houghton) Officer and Director
/s/ Van C. Campbell Vice Chairman, Principal Financial Officer and
(Van C. Campbell) Director
/s/ Larry Aiello, Jr. Vice President, Controller, and Principal
(Larry Aiello, Jr.) Accounting Officer
*
President, Principal Operating Officer and
(Roger G. Ackerman) Director
*
(Robert Barker) Director
(Mary L. Bundy) Director
*
(Barber B. Conable, Jr.) Director
*
(David A. Duke) Director
(E. Martin Gibson) Director
(Gordon Gund) Director
(John M. Hennessy) Director
(Vernon E. Jordan, Jr.) Director
*
<PAGE>
(James W. Kinnear) Director
*
(James J. O'Connor) Director
*
(Catherine A. Rein) Director
(Henry Rosovsky) Director
(William D. Smithburg) Director
(Robert G. Stone, Jr.) Director
* By
/s/ William C. Ughetta
(William C. Ughetta)
Attorney-in-fact
</TABLE>
<PAGE>
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Page
Number Description Number
- --------- ---------------------------------------------------------------------------------- ---------
<S> <C> <C>
1.1 Form of Underwriting Agreement
3.1 Restated Certificate of Incorporation, dated July 12, 1989, and the Certificate
of Amendment, dated September 28, 1989, of the Restated Certificate of
Incorporation of the Registrant (incorporated by reference to Exhibit 3(a) of
the Registrant's Annual Report on Form 10-K for the fiscal year ended December
31, 1989)
3.2 By-laws of the Registrant (incorporated by reference to Exhibit 3(a) of the
Registrant's Annual Report on Form 10-K for the fiscal year December 30, 1990)
3.3 Certificate of Amendment, dated April 30, 1992, of the Restated Certificate of
Incorporation of the Registrant (incorporated by reference to Exhibit 3(a) of
the Registrant's Annual Report on Form 10-K for the fiscal year ended January 3,
1993)
4.1 Form of Common Stock Certificate (incorporated by reference to Exhibit 4 to
Registration Statement on Form S-4 filed with the Commission on June 17, 1992
(Registration Statement No. 33-48488))
4.2 Rights Agreement, dated as of July 2, 1986, between Corning Incorporated and
Harris Trust and Savings Bank, as amended (incorporated by reference to Exhibit
1 to Registration Statement on Form 8-A, filed with the Commission on July 2,
1986 and Exhibit 1 to Amendment No. 1 on Form 8, filed with the Commission on
October 10, 1989)
4.3 Form of Preferred Share Purchase Right (included in Exhibit 4.2)
5.1 Opinion of William C. Ughetta, Esq., Senior Vice President and General Counsel
23.1 Consent of Price Waterhouse, independent accountants
23.2 Consent of Arthur Andersen, independent public accountants
23.3 Consent of William C. Ughetta, Esq. (included in Exhibit 5.1)
24.1 Powers of Attorney
</TABLE>
Corning Incorporated
Common Stock
($0.50 par value)
__________
Underwriting Agreement
. . . . . . . . . . . . , 1994
Goldman, Sachs & Co.,
85 Broad Street,
New York, New York 10004.
Dear Sirs:
Corning Incorporated, a New York corporation (the "Company"),
proposes, subject to the terms and conditions stated herein, to issue and
sell to Goldman, Sachs & Co. (the "Underwriter") an aggregate of
8,000,000 shares (the "Shares") of Common Stock, par value $0.50 per
share ("Stock"), of the Company.
1. The Company represents and warrants to, and agrees with, the
Underwriter that:
(a) A registration statement in respect of the Shares has been
filed with the Securities and Exchange Commission (the "Commis-
sion"); such registration statement and any post-effective amendment
thereto, each in the form heretofore delivered to you, and, excluding
exhibits thereto but including all documents incorporated by reference
in the prospectus contained therein, to you, have been declared
effective by the Commission in such form; no other document with
respect to such registration statement or document incorporated by
reference therein has heretofore been filed with the Commission; and
no stop orders suspending the effectiveness of such registration
statement have been issued and no proceeding for that purpose has
been initiated or threatened by the Commission (any preliminary
prospectus included in such registration statement or filed with the
Commission pursuant to Rule 424(a) of the rules and regulations of
the Commission under the Securities Act of 1933, as amended (the
"Act"), being hereinafter called a "Preliminary Prospectus"; the various
parts of such registration statement, including all exhibits thereto and
including (i) the information contained in the form of final prospectus
filed with the Commission pursuant to Rule 424(b) under the Act in
accordance with Section 5(a) hereof and deemed by virtue of Rule
430A under the Act to be part of the registration statement at the time
it was declared effective and (ii) the documents incorporated by
reference in the prospectus contained in the registration statement at
the time such part of the registration statement became effective,
each as amended at the time such part of the registration statement
<PAGE>
<PAGE>
became effective, being hereinafter called the "Registration
Statement"; and such final prospectus, in the form first filed pursuant
to Rule 424(b) under the Act, being hereinafter called the
"Prospectus"; and any reference herein to any Preliminary Prospectus
or the Prospectus shall be deemed to refer to and include the
documents incorporated by reference therein pursuant to Item 12 of
Form S-3 under the Act, as of the date of such Preliminary
Prospectus or Prospectus, as the case may be; any reference to any
amendment or supplement to any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include any documents
filed after the date of such Preliminary Prospectus or Prospectus, as
the case may be, under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and incorporated by reference in such
Preliminary Prospectus or Prospectus, as the case may be; and any
reference to any amendment to the Registration Statement shall be
deemed to refer to and include any annual report of the Company
filed pursuant to Section 13(a) or 15(d) of the Exchange Act after the
effective date of the Registration Statement that is incorporated by
reference in the Registration Statement;
(b) No order preventing or suspending the use of any
Preliminary Prospectus has been issued by the Commission, and
each Preliminary Prospectus, at the time of filing thereof, conformed
in all material respects to the requirements of the Act and the rules
and regulations of the Commission thereunder, and did not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading; provided, however, that this representation and
warranty shall not apply to any statements or omissions made in
reliance upon and in conformity with information furnished in writing to
the Company by the Underwriter expressly for use therein;
(c) The documents incorporated by reference in the Prospectus,
when they became effective or were filed with the Commission, as the
case may be, conformed in all material respects to the requirements
of the Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder, and none of such
documents contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; and any
further documents so filed and incorporated by reference in the
Prospectus or any further amendment or supplement thereto, when
such documents become effective or are filed with the Commission,
as the case may be, will conform in all material respects to the
requirements of the Act or the Exchange Act, as applicable, and the
rules and regulations of the Commission thereunder and will not
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; provided, however, that this
representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with information
furnished in writing to the Company by the Underwriter expressly for
use therein;
(d) The Registration Statement conforms, and the Prospectus
and any further amendments or supplements to the Registration
Statement or the Prospectus will conform, in all material respects to
the requirements of the Act and the rules and regulations of the
Commission thereunder and do not and will not, as of the applicable
effective date as to the Registration Statement and any amendment
thereto and as of the applicable filing date as to the Prospectus and
any amendment or supplement thereto, contain an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading;
provided, however, that this representation and warranty shall not
2
<PAGE>
<PAGE>
apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by the
Underwriter expressly for use therein;
(e) Neither the Company nor any of its subsidiaries has
sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus any material
loss or interference with its business from fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any
labor dispute or court or governmental action, order or decree, other-
wise than as set forth or contemplated in the Prospectus; and, since
the respective dates as of which information is given in the
Registration Statement and the Prospectus, there has not been any
change in the capital stock or long-term debt of the Company or any
of its subsidiaries or any material adverse change, or any
development involving a prospective material adverse change, in or
affecting the general affairs, management, financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries, considered as a whole, otherwise than as set forth or
contemplated in the Prospectus;
(f) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of New York, with power and authority (corporate and other) to own
its properties and conduct its business as described in the
Prospectus, and has been duly qualified as a foreign corporation for
the transaction of business and is in good standing under the laws of
each other jurisdiction in which it owns or leases properties, or
conducts any business, so as to require such qualification, or is
subject to no material liability or disability by reason of the failure to
be so qualified in any such jurisdiction; and each Significant
Subsidiary (as defined in Regulation S-X under the Act) of the
Company has been duly incorporated and is validly existing as a
corporation and is in good standing under the laws of its jurisdiction of
incorporation;
(g) The Company has an authorized capitalization as set forth
in the Prospectus, and all of the issued shares of capital stock of the
Company have been duly and validly authorized and issued, are fully
paid and non-assessable and conform to the description of the Stock
contained in the Prospectus; and all of the issued shares of capital
stock of each Significant Subsidiary of the Company have been duly
and validly authorized and issued, are fully paid and non-assessable
and (except for directors' qualifying shares and except as set forth in
the Prospectus) are owned directly or indirectly by the Company, free
and clear of all liens, encumbrances, equities or claims;
(h) The Shares to be issued and sold by the Company to the
Underwriter hereunder have been duly and validly authorized and,
when issued and delivered against payment therefor as provided
herein, will be duly and validly issued and fully paid and non-
assessable and will conform to the description of the Stock contained
in the Prospectus;
(i) The issue and sale of the Shares by the Company and the
compliance by the Company with all of the provisions of this
Agreement and the consummation of the transactions herein
contemplated will not conflict with or result in a breach of any of the
terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company is a party or by which the Company
is bound or to which any of the property or assets of the Company is
subject, nor will such action result in any violation of the provisions of
the Certificate of Incorporation or By-laws of the Company or any
statute or any order, rule or regulation of any court or governmental
agency or body having jurisdiction over the Company or any of its
properties; and no consent, approval, authorization, order, registration
or qualification of or with any such court or governmental agency or
body is required for the issue and sale of the Shares or the consum-
3<PAGE>
<PAGE>
mation by the Company of the transactions contemplated by this
Agreement, except the registration under the Act of the Shares and
such consents, approvals, authorizations, registrations or
qualifications as have been obtained or as may be required under
state securities or Blue Sky laws in connection with the purchase and
distribution of the Shares by the Underwriter;
(j) Other than as set forth or contemplated in the Prospectus,
there are no legal or governmental proceedings or investigations
pending to which the Company or any of its subsidiaries is a party or
of which any property of the Company or any of its subsidiaries is the
subject which, if determined adversely to the Company or any of its
subsidiaries, would individually or in the aggregate have a material
adverse effect on the consolidated financial position, stockholders'
equity or results of operations of the Company and its subsidiaries;
and, to the best of the Company's knowledge, no such proceedings or
investigations are threatened or contemplated by governmental
authorities or threatened by others; and
2. Subject to the terms and conditions herein set forth, the
Company agrees to issue and sell to the Underwriter, and the Underwriter
agrees to purchase from the Company, at a purchase price per share of $
. . . . . ., the Shares.
As compensation to the Underwriter for its commitments
hereunder, the Company at the Time of Delivery (as defined in Section 4
hereof) will pay to the Underwriter, an amount equal to $__________ per
share for the Shares.
3. The Underwriter proposes to offer the Shares for sale upon the
terms and conditions set forth in the Prospectus.
4. Certificates in definitive form for the Shares to be purchased by
the Underwriter, and in such denominations and registered in such names
as the Underwriter may request upon at least forty-eight hours' prior notice
to the Company, shall be delivered by or on behalf of the Company to you,
against payment by you of the purchase price therefor by certified or
official bank check or checks, payable to the order of the Company in New
York Clearing House funds, all at the office of Sullivan & Cromwell, 250
Park Avenue, New York, New York 10177. The time and date of such
delivery and payment shall be 9:30 a.m., New York time, on . . . . . . . . . ,
1994, or at such other time and date as you and the Company may agree
upon in writing. Such time and date for delivery of the Shares is herein
called the "Time of Delivery". Such certificates will be made available for
checking and packaging at least twenty-four hours prior to the Time of
Delivery at the office of the Underwriter.
5. The Company agrees with the Underwriter:
(a) To prepare the Prospectus in a form approved by you and
to file such Prospectus pursuant to Rule 424(b) under the Act not
later than the Commission's close of business on the second
business day following the execution and delivery of this Agreement,
or, if applicable, such earlier time as may be required by Rule
430A(a)(3) under the Act; to make no further amendment or any
supplement to the Registration Statement or Prospectus prior to the
Time of Delivery which shall be reasonably disapproved by you
promptly after reasonable notice thereof; to advise you, promptly after
it receives notice thereof, of the time when the Registration
Statement, or any amendment thereto, has been filed or becomes
4
<PAGE>
<PAGE>
effective or any supplement to the Prospectus or any amended
Prospectus has been filed and to furnish you with copies thereof; to
file promptly all reports and any definitive proxy or information
statements required to be filed by the Company with the Commission
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act
subsequent to the date of the Prospectus and for so long as the
delivery of a prospectus is required in connection with the offering or
sale of the Shares; to advise you, promptly after it receives notice
thereof, of the issuance by the Commission of any stop order or of
any order preventing or suspending the use of any Preliminary
Prospectus or Prospectus, of the suspension of the qualification of the
Shares for offering or sale in any jurisdiction, of the initiation or
threatening of any proceeding for any such purpose, or of any request
by the Commission for the amending or supplementing of the
Registration Statement or Prospectus or for additional information;
and, in the event of the issuance of any stop order or of any order
preventing or suspending the use of any Preliminary Prospectus or
Prospectus or suspending any such qualification, to use promptly its
best efforts to obtain its withdrawal;
(b) Promptly from time to time to take such action as you may
reasonably request to qualify the Shares for offering and sale under
the securities laws of such jurisdictions as you may request and to
comply with such laws so as to permit the continuance of sales and
dealings therein in such jurisdictions for as long as may be necessary
to complete the distribution of the Shares, provided that in connection
therewith the Company shall not be required to qualify as a foreign
corporation or to file a general consent to service of process in any
jurisdiction;
(c) To furnish the Underwriter with copies of the Prospectus in
such quantities as you may from time to time reasonably request,
and, if the delivery of a prospectus is required at any time prior to the
expiration of nine months after the time of issue of the Prospectus in
connection with the offering or sale of the Shares and if at such time
any event shall have occurred as a result of which the Prospectus as
then amended or supplemented would include an untrue statement of
a material fact or omit to state any material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made when such Prospectus is delivered, not
misleading, or, if for any other reason it shall be necessary during
such period to amend or supplement the Prospectus or to file under
the Exchange Act any document incorporated by reference in the
Prospectus in order to comply with the Act or the Exchange Act, to
notify you and upon your request to file such document and to
prepare and furnish without charge to the Underwriter and to any
dealer in securities as many copies as you may from time to time
reasonably request of an amended Prospectus or a supplement to the
Prospectus which will correct such statement or omission or effect
such compliance, and in case the Underwriter is required to deliver a
prospectus in connection with sales of any of the Shares at any time
nine months or more after the time of issue of the Prospectus, upon
your request but at your expense, to prepare and deliver to you as
many copies as you may request of an amended or supplemented
Prospectus complying with Section 10(a)(3) of the Act;
(d) To make generally available to its securityholders as soon
as practicable, but in any event not later than eighteen months after
the effective date of the Registration Statement (as defined in Rule
158(c)), an earning statement of the Company and its subsidiaries
(which need not be audited) complying with Section 11(a) of the Act
and the rules and regulations thereunder (including at the option of
the Company Rule 158);
(e) During the period beginning from the date hereof and
continuing to and including the date 90 days after the date of the
Prospectus, not to offer, sell, contract to sell or otherwise dispose of
any securities of the Company (other than pursuant to employee
stock option plans or dividend reinvestment plans or to the
5
<PAGE>
<PAGE>
conversion or exchange of convertible or exchangeable securities
outstanding on the date of this Agreement and other than Stock
issued by the Company in mergers, acquisitions or similar
transactions) which are substantially similar to the Stock or which are
convertible or exchangeable into securities which are substantially
similar to the Stock, without your prior written consent;
(f) During a period of three years from the effective date of the
Registration Statement, to furnish to you copies of all reports or other
communications (financial or other) furnished to stockholders by the
Company, and deliver to you as soon as they are available, copies of
any reports and financial statements furnished to or filed by the
Company with the Commission or any national securities exchange
on which any class of securities of the Company is listed; and
(g) To use its best efforts to list, subject to notice of issuance,
the Shares on the New York Stock Exchange.
(h) To use the proceeds from the offering of the Shares as
described under the caption "Use of Proceeds" in the Prospectus.
6. The Company covenants and agrees with the Underwriter that
the Company will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company's counsel and accountants
in connection with the registration of the Shares under the Act and all
other expenses in connection with the preparation, printing and filing of the
Registration Statement, any Preliminary Prospectus and the Prospectus
and amendments and supplements thereto and the mailing and delivering
of copies thereof to the Underwriter and dealers; (ii) the cost of printing or
producing this Agreement, the Blue Sky Memorandum and any other
documents in connection with the offering, purchase, sale and delivery of
the Shares; (iii) all expenses in connection with the qualification of the
Shares for offering and sale under state securities laws as provided in
Section 5 (b) hereof, including the fees and disbursements of counsel for
the Underwriter in connection with such qualification and in connection with
the Blue Sky survey; (iv) the filing fees incident to securing any required
review by the National Association of Securities Dealers, Inc. of the terms
of the sale of the Shares; (v) the cost of preparing stock certificates;
(vi) the cost and charges of any transfer agent or registrar; and (vii) all
other costs and expenses incident to the performance of its obligations
hereunder which are not otherwise specifically provided for in this Section.
It is understood, however, that, except as provided in this Section, Section
8 and Section 10 hereof, the Underwriter will pay all of its own costs and
expenses, including the fees of its counsel, stock transfer taxes on resale
of any of the Shares by it, and any advertising expenses connected with
any offers that it may make.
7. The obligations of the Underwriter hereunder, as to the Shares to
be delivered at the Time of Delivery, shall be subject, in its discretion, to
the condition that all representations and warranties and other statements
of the Company herein are, at and as of the Time of Delivery, true and
correct, the condition that the Company shall have performed all of its
obligations hereunder theretofore to be performed, and the following
additional conditions:
(a) The Prospectus shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period prescribed
for such filing by the rules and regulations under the Act and in
accordance with Section 5 (a) hereof; no stop order suspending the
effectiveness of the Registration Statement or any part thereof shall
have been issued and no proceeding for that purpose shall have
been initiated or threatened by the Commission; and all requests for
additional information on the part of the Commission shall have been
complied with to your reasonable satisfaction;
(b) Sullivan & Cromwell, counsel for the Underwriter, shall have
furnished to you such opinion or opinions, dated the Time of Delivery,
6
<PAGE>
<PAGE>
with respect to the incorporation of the Company, the validity of the
Shares being delivered at the Time of Delivery, the Registration
Statement, the Prospectus, and other related matters as you may
reasonably request, and such counsel shall have received such
papers and information as they may reasonably request to enable
them to pass upon such matters;
(c) William C. Ughetta, Esq., General Counsel of the Company,
shall have furnished to you his written opinion, dated the Time of
Delivery, in form and substance satisfactory to you, to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
State of New York, with power and authority (corporate and
other) to own its properties and conduct its business as
described in the Prospectus;
(ii) The Company has an authorized capitalization as set
forth in the Prospectus, and all of the issued shares of capital
stock of the Company (including the Shares being delivered at
the Time of Delivery) have been duly and validly authorized and
issued and are fully paid and nonassessable; and the Shares
conform to the description of the Stock contained in the
Prospectus;
(iii) With such exceptions as are not material, the Company
has been duly qualified as a foreign corporation for the
transaction of business and is in good standing under the laws of
each other jurisdiction in which it owns or leases properties, or
conducts any business, so as to require such qualification (such
counsel being entitled to rely in respect of the opinion in this
clause upon opinions of local counsel and in respect of matters
of fact upon certificates of officers of the Company, provided that
such counsel shall state that he believes that both you and he
are justified in relying upon such opinions and certificates);
(iv) To the best of such counsel's knowledge there are no
legal or governmental proceedings or investigations pending to
which the Company or any of its subsidiaries is a party or of
which any property of the Company or any of its subsidiaries is
the subject (other than as set forth in the Prospectus and other
than litigation incident to the kind of business conducted by the
Company and its subsidiaries, none of which litigation is material
to the Company and its subsidiaries considered as a whole)
which individually and in the aggregate is material to the
Company and its subsidiaries considered as a whole; and to the
best of such counsel's knowledge no such proceedings or
investigations are threatened by governmental authorities or by
others; and such counsel has not received notice that any such
proceedings or investigations are contemplated by governmental
authorities;
(v) This Agreement has been duly authorized, executed
and delivered by the Company;
(vi) The issue and sale of the Shares by the Company and
the compliance by the Company with all of the provisions of this
Agreement and the consummation of the transactions herein
contemplated will not conflict with or result in a breach of any of
the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument known to such counsel to which the
Company is a party or by which the Company is bound or to
which any of the property or assets of the Company is subject,
nor will such action result in any violation of the provisions of the
Certificate of Incorporation or By-laws of the Company or any
statute or any order, rule or regulation known to such counsel of
any court or governmental agency or body having jurisdiction
over the Company or any of its properties;
7
<PAGE>
<PAGE>
(vii) No consent, approval, authorization, order, registration
or qualification of or with any such court or governmental agency
or body is required for the issue and sale of the Shares or the
consummation by the Company of the transactions contemplated
by this Agreement, except the registration under the Act of the
Shares, and such consents, approvals, authorizations,
registrations or qualifications as have been obtained or may be
required under state securities or Blue Sky laws in connection
with the purchase and distribution of the Shares by the
Underwriter;
(viii) The documents incorporated by reference in the
Prospectus or any further amendment or supplement thereto
made by the Company prior to the Time of Delivery (other than
the financial statements and related schedules therein, as to
which such counsel need express no opinion), when they
became effective or were filed with the Commission, as the case
may be, complied as to form in all material respects with the
requirements of the Act or the Exchange Act, as applicable, and
the rules and regulations of the Commission thereunder; and
such counsel has no reason to believe that any of such
documents, when such documents became effective or were so
filed, as the case may be, contained, in the case of a registration
statement which became effective under the Act, an untrue
statement of a material fact, or omitted to state a material fact
required to be stated therein or necessary to make the
statements therein not misleading, or, in the case of other
documents which were filed under the Exchange Act with the
Commission, an untrue statement of a material fact or omitted to
state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were
made when such documents were so filed, not misleading; and
(ix) The Registration Statement and the Prospectus and
any further amendments and supplements thereto made by the
Company prior to the Time of Delivery (other than the financial
statements and related schedules therein, as to which such
counsel need express no opinion) comply as to form in all
material respects with the requirements of the Act and the rules
and regulations thereunder; such counsel has no reason to
believe that, as of its effective date, the Registration Statement
or any further amendment thereto made by the Company prior to
the Time of Delivery (other than the financial statements and
related statements and related schedules therein, as to which
such counsel need express no opinion) contained an untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the
statements therein not misleading or that, as of its date, the
Prospectus or any further amendment or supplement thereto
made by the Company prior to the Time of Delivery (other than
the financial statements and related schedules therein, as to
which such counsel need express no opinion) contained an
untrue statement of a material fact or omitted to state a material
fact necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading or that,
as of the Time of Delivery, either the Registration Statement or
the Prospectus or any further amendment or supplement thereto
made by the Company prior to the Time of Delivery (other than
the financial statements and related schedules therein, as to
which such counsel need express no opinion) contains an untrue
statement of a material fact or omits to state a material fact
necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading; and
such counsel does not know of any amendment to the
Registration Statement required to be filed or of any contracts or
other documents of a character required to be filed as an exhibit
to the Registration Statement or required to be incorporated by
reference into the Prospectus or required to be described in the
Registration Statement or the Prospectus which are not filed or
incorporated by reference or described as required.
8
<PAGE>
<PAGE>
(d) Shearman & Sterling, special counsel to the Company, shall
have furnished to you their opinion, dated the Time of Delivery, in
form and substance satisfactory to you, to the effect that the
information set forth in the Preliminary Prospectus and the Prospectus
(i) concerning the legal proceedings under the captions "Business --
Recent Developments -- Breast Implant Litigation" and "-- Other Legal
Proceedings" and (ii) concerning the legal proceedings involving the
billing practices of the Company's Metpath division of its wholly
owned subsidiary, Corning Lab Services, Inc., under the caption
"Business -- Recent Developments -- Department of Justice
Investigation," is appropriately responsive to the requirements of the
Act and the rules and regulation issued thereunder.
(e) On the effective date of the Registration Statement and the
most recently filed post-effective amendment to the Registration
Statement and also at 10:00 a.m., New York City time, at the Time of
Delivery, Price Waterhouse and Arthur Andersen & Co. shall have
furnished to you a letter or letters, dated the respective dates of
delivery thereof, in form and substance satisfactory to you, to the
effect set forth in Annexes I and II hereto, respectively;
(f)(i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus any loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus, and (ii) since the
respective dates as of which information is given in the Prospectus
there shall not have been any change in the capital stock or long-term
debt of the Company or any of its subsidiaries or any change, or any
development involving a prospective change, in or affecting the
general affairs, management, financial position, stockholders' equity or
results of operations of the Company and its subsidiaries, otherwise
than as set forth or contemplated in the Prospectus, the effect of
which, in any such case described in Clause (i) or (ii), is in your
reasonable judgment so material and adverse as to make it
impracticable or inadvisable to proceed with the public offering or the
delivery of the Shares being delivered at the Time of Delivery on the
terms and in the manner contemplated in the Prospectus;
(g) On or after the date hereof (i) no downgrading shall have
occurred in the rating accorded the Company's debt securities by any
"nationally recognized statistical rating organization," as that term is
defined by the Commission for purposes of Rule 436(g) (2) under the
Act and (ii) no such organization shall have publicly announced that it
has under surveillance or review, with possible negative implications,
its rating of any of the Company's debt securities;
(h) On or after the date hereof there shall not have occurred
any of the following: (i) a suspension or material limitation in trading in
securities generally on the New York Stock Exchange; (ii) a general
moratorium on commercial banking activities in New York declared by
either Federal or New York State authorities; or (iii) the outbreak or
escalation of hostilities involving the United States or the declaration
by the United States of a national emergency or war, if the effect of
any such event specified in this clause (iii) in your judgment makes it
impracticable or inadvisable to proceed with the public offering or the
delivery of the Shares being delivered at the Time of Delivery on the
terms and in the manner contemplated by the Prospectus;
9<PAGE>
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(i) The Shares to be sold by the Company at the Time of
Delivery shall have been duly listed, subject to notice of issuance, on
the New York Stock Exchange; and
(j) The Company shall have furnished or caused to be
furnished to you at the Time of Delivery certificates of officers of the
Company satisfactory to you as to the accuracy of the representations
and warranties of the Company herein at and as of the Time of
Delivery, as to the performance by the Company of all of its
obligations hereunder to be performed at or prior to the Time of
Delivery, as to the matters set forth in subsection (a) and clauses (i)
and (ii) of subsection (f) of this Section and as to such other matters
as you may reasonably request.
8. (a) The Company will indemnify and hold harmless the
Underwriter against any losses, claims, damages or liabilities to which the
Underwriter may become subject, under the Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or any amendment or
supplement thereto, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and
will reimburse the Underwriter for any legal or other expenses reasonably
incurred by the Underwriter in connection with investigating or defending
any such action or claim as such expenses are incurred; provided,
however, that the Company shall not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is
based upon an untrue statement or alleged untrue statement or omission
or alleged omission made in any Preliminary Prospectus, the Registration
Statement or the Prospectus or any such amendment or supplement in
reliance upon and in conformity with written information furnished to the
Company by the Underwriter expressly for use therein; and provided,
further, that the Company shall not be liable to the Underwriter under the
indemnity agreement in this subsection (a) with respect to any Preliminary
Prospectus to the extent that any such loss, claim, damage or liability of
the Underwriter results from the fact that the Underwriter sold Shares to a
person as to whom it shall be established that there was not sent or given,
at or prior to the written confirmation of such sale, a copy of the
Prospectus (excluding documents incorporated by reference) or of the
Prospectus as then amended or supplemented (excluding documents
incorporated by reference) in any case where such delivery is required by
the Act if the Company has previously furnished copies thereof to the
Underwriter and the loss, claim, damage or liability of the Underwriter
results from an untrue statement or omission of a material fact contained
in the Preliminary Prospectus which was corrected in the Prospectus
(excluding documents incorporated by reference) or in the Prospectus as
then amended or supplemented (excluding documents incorporated by
reference).
(b) The Underwriter will indemnify and hold harmless the Company
against any losses, claims, damages or liabilities to which the Company
may become subject, under the Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the Registration
Statement or the Prospectus, or any amendment or supplement thereto, or
arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, in each case to the extent, but only
to the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in any Preliminary Prospectus, the
Registration Statement or the Prospectus or any such amendment or
supplement in reliance upon and in conformity with written information
10<PAGE>
<PAGE>
furnished to the Company by the Underwriter expressly for use therein;
and will reimburse the Company for any legal or other expenses
reasonably incurred by the Company in connection with investigating or
defending any such action or claim as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against
the indemnifying party under such subsection, notify the indemnifying party
in writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. In case any
such action shall be brought against any indemnified party and it shall
notify the indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate therein and, to the extent
that it shall wish, jointly with any other indemnifying party similarly
notified,
to assume the defense thereof, with counsel satisfactory to such
indemnified party (who shall not, except with the consent of the
indemnified party, be counsel to the indemnifying party), and, after notice
from the indemnifying party to such indemnified party of its election so to
assume the defense thereof, the indemnifying party shall not be liable to
such indemnified party under such subsection for any legal expenses of
other counsel or any other expenses, in each case subsequently incurred
by such indemnified party, in connection with the defense thereof other
than reasonable costs of investigation.
(d) If the indemnification provided for in this Section 8 is unavailable
to or insufficient to hold harmless an indemnified party under subsection
(a) or (b) above in respect of any losses, claims, damages or liabilities (or
actions in respect thereof) referred to therein, then each indemnifying party
shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages or liabilities (or actions in
respect thereof) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Underwriter
on the other from the offering of the Shares. If, however, the allocation
provided by the immediately preceding sentence is not permitted by
applicable law or if the indemnified party failed to give the notice required
under subsection (c) above, then each indemnifying party shall contribute
to such amount paid or payable by such indemnified party in such
proportion as is appropriate to reflect not only such relative benefits but
also the relative fault of the Company on the one hand and the
Underwriter on the other in connection with the statements or omissions
which resulted in such losses, claims, damages or liabilities (or actions in
respect thereof), as well as any other relevant equitable considerations.
The relative benefits received by the Company on the one hand and the
Underwriter on the other shall be deemed to be in the same proportion as
the total net proceeds from the offering of the Shares purchased under this
Agreement (before deducting expenses) received by the Company bear to
the total underwriting discounts and commissions received by the
Underwriter with respect to the Shares purchased under this Agreement, in
each case as set forth in the table on the cover page of the Prospectus.
The relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company on the one hand or the Underwriter on the other
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The
Company and the Underwriter agree that it would not be just and equitable
if contributions pursuant to this subsection (d) were determined by pro rata
allocation or by any other method of allocation which does not take
account of the equitable considerations referred to above in this
subsection (d). The amount paid or payable by an indemnified party as a
result of the losses, claims, damages or liabilities (or actions in respect
thereof) referred to above in this subsection (d) shall be deemed to include
any legal or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this subsection (d), the Underwriter shall
11
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<PAGE>
not be required to contribute any amount in excess of the amount by
which the total price at which the Shares underwritten by it and distributed
to the public were offered to the public exceeds the amount of any
damages which the Underwriter has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
(e) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who
controls the Underwriter within the meaning of the Act; and the obligations
of the Underwriter under this Section 8 shall be in addition to any liability
which the Underwriter may otherwise have and shall extend, upon the
same terms and conditions, to each officer and director of the Company
and to each person, if any, who controls the Company within the meaning
of the Act.
9. The respective indemnities, agreements, representations,
warranties and other statements of the Company and the Underwriter, as
set forth in this Agreement or made by or on behalf of them, respectively,
pursuant to this Agreement, shall remain in full force and effect, regardless
of any investigation (or any statement as to the results thereof) made by or
on behalf of the Underwriter or any controlling person of the Underwriter,
or the Company, or any officer or director or controlling person of the
Company, and shall survive delivery of and payment for the Shares.
10. If this Agreement shall be terminated for any reason or if for any
reason any Shares are not delivered by or on behalf of the Company as
herein provided, the Company will reimburse the Underwriter for all
out-of-pocket expenses, including fees and disbursements of counsel,
reasonably incurred by the Underwriter in making preparations for the
purchase, sale and delivery of the Shares, but the Company shall then be
under no further liability to the Underwriter in respect of the Shares except
as provided in Section 6 and Section 8 hereof.
11. All statements, requests, notices and agreements hereunder
shall be in writing, and if to the Underwriters shall be delivered or sent by
mail, telex or facsimile transmission to you at 85 Broad Street, New York,
N.Y. 10004, Attention: Registration Department; and if to the Company
shall be delivered or sent by mail, telex or facsimile transmission to the
address of the Company set forth in the Registration Statement, Attention:
Secretary. Any such statements, requests, notices or agreements shall
take effect at the time of receipt thereof.
12. This Agreement shall be binding upon, and inure solely to the
benefit of, the Underwriter, the Company and, to the extent provided in
Sections 8 and 9 hereof, the officers and directors of the Company and
each person who controls the Company or the Underwriter, and their
respective heirs, executors, administrators, successors and assigns, and
no other person shall acquire or have any right under or by virtue of this
Agreement. No purchaser of any of the Shares from the Underwriter shall
be deemed a successor or assign by reason merely of such purchase.
13. Time shall be of the essence of this Agreement. As used herein,
the term "business day" shall mean any day when the Commission's office
in Washington, D.C. is open for business.
14. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
15. This Agreement may be executed by either of the parties hereto
in any number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and the
same instrument.
12
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<PAGE>
If the foregoing is in accordance with your understanding, please sign
and return to us four counterparts hereof, and upon the acceptance hereof
by you, this letter and such acceptance hereof shall constitute a binding
agreement between the Underwriter and the Company.
Very truly yours,
Corning Incorporated
By:. . . . . . . . . . . .
Name:
Title:
Accepted as of the date hereof:
By: . . . . . . . . . . . . . . . .
(Goldman, Sachs & Co.)
Exhibit 5.1
January 18, 1994
To the Board of Directors
of Corning Incorporated
Dear Sirs:
As General Counsel for Corning Incorporated (the "Company"), I have
participated in the preparation of the Registration Statement on Form S-3,
File No. 33-51481, filed on December 16, 1993 with the Securities and
Exchange Commission with respect to 6,700,000 shares of the Company's Common
Stock, $.50 par value (the "Common Stock"), and Amendment No. 1 thereto filed
on January 18, 1994 with respect to an additional 1,300,000 shares of Common
Stock (the "Registration Statement") to be offered upon the effectiveness of
the Registration Statement.
In this capacity, I have examined signed copies of the Registration
Statement. I have also examined the originals, or copies identified to my
satisfaction, of such corporate records of the Company, such other agreements
and instruments, certificates of public officials, officers of the Company
and other persons, and such other documents as I have deemed necessary as a
basis for the opinions hereinafter expressed.
Based upon the foregoing and having regard for such legal considerations that
I deem relevant, I am of the opinion that:
1. The Company has been duly incorporated and is validly existing under the
laws of the State of New York;
2. When delivered and paid for as contemplated by the Registration Statement,
the issuance of 8,000,000 shares of Common Stock of the Company in a public
offering pursuant to the Registration Statement will have been duly
authorized by all necessary corporate action on the part of the Company and
the shares will be legally issued, fully paid and non-assessable.
I hereby consent to the use of this opinion as an exhibit to the Registration
Statement and to the use of my name under the heading "Validity of Common
Stock" in the related prospectus.
Very truly yours,
/s/ William C. Ughetta
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of our report
dated January 25, 1993, which appears on Page 46 of the Corning Incorporated
1992 Annual Report to Stockholders, which is incorporated by reference in the
Corning Incorporated Annual Report on Form 10-K for the year ended January 3,
1993. We also consent to the incorporation by reference of our report on the
Financial Statement Schedules, which appears on Page 13 of such Annual Report
on Form 10-K. We also consent to the incorporation by reference of our report
dated January 15, 1993 on the financial statements of Dow Corning
Corporation, which appears on Page 17 of the Corning Incorporated Annual
Report on Form 10-K for the year ended January 3, 1993. We also consent to
the references to us under the heading "Experts" and "Selected Consolidated
Financial Data" in such Prospectus. However, it should be noted that Price
Waterhouse has not prepared or certified such "Selected Consolidated
Financial Data".
/s/ Price Waterhouse
1177 Avenue of the Americas
New York, New York
January 18, 1994
Exhibit 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in the Prospectus constituting part of this Registration Statement
on Form S-3 of our report dated March 11, 1993 (except with respect to Note
N, as to which the date is July 3, 1993) on the consolidated financial
statements of Damon Corporation and Subsidiaries as of December 31, 1992 and
1991 and for each of the three years ended December 31, 1992 which are
included in Corning's Current Report on Form 8-K filed on August 4, 1993
which is incorporated into this Prospectus. We also consent to the reference
to us under the heading "Experts" in such Prospectus.
/s/ Arthur Andersen & Co.
Boston, Massachusetts
January 17, 1994
Exhibit 24
CORNING INCORPORATED
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned Director and/or Officer
of Corning Incorporated, a New York corporation, hereby constitutes and
appoints Van C. Campbell, Larry Aiello and William C. Ughetta, or any of
them, his true and lawful attorneys and agents, in the name and on behalf of
the undersigned, to do any and all acts and things and execute any and all
instruments which the said attorneys and agents, or any one of them, may deem
necessary or advisable to enable Corning Incorporated to comply with the
Securities Act of 1933, as amended and any rules, regulations and
requirements of the Securities and Exchange Commission in respect thereof, in
connection with the registration under the Securities Act of 1933 of up to
8,000,000 shares of the Common Stock of Corning Incorporated, including
specifically, but without limiting the generality of the foregoing, the power
and authority to sign the name of the undersigned in his capacity as Director
and/or Officer of Corning Incorporated to a Registration Statement on Form
S-3 and/or such other form as may be appropriate to be filed with the
Securities and Exchange Commission in respect of said shares of Common Stock,
to any and all amendments to the said Registration Statements, including
Post-Effective Amendments, and to any and all instruments and documents filed
as a part of or in connection with the said Registration Statement or
amendments thereto; HEREBY RATIFYING AND CONFIRMING all that said attorneys
and agents, or any one of them, shall do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, the undersigned has subscribed these presents this 14th
day of January, 1994.
/s/ Robert Barker
<PAGE>
Exhibit 24
CORNING INCORPORATED
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned Director and/or Officer
of Corning Incorporated, a New York corporation, hereby constitutes and
appoints Van C. Campbell, Larry Aiello and William C. Ughetta, or any of
them, his true and lawful attorneys and agents, in the name and on behalf of
the undersigned, to do any and all acts and things and execute any and all
instruments which the said attorneys and agents, or any one of them, may deem
necessary or advisable to enable Corning Incorporated to comply with the
Securities Act of 1933, as amended and any rules, regulations and
requirements of the Securities and Exchange Commission in respect thereof, in
connection with the registration under the Securities Act of 1933 of up to
8,000,000 shares of the Common Stock of Corning Incorporated, including
specifically, but without limiting the generality of the foregoing, the power
and authority to sign the name of the undersigned in his capacity as Director
and/or Officer of Corning Incorporated to a Registration Statement on Form
S-3 and/or such other form as may be appropriate to be filed with the
Securities and Exchange Commission in respect of said shares of Common Stock,
to any and all amendments to the said Registration Statements, including
Post-Effective Amendments, and to any and all instruments and documents filed
as a part of or in connection with the said Registration Statement or
amendments thereto; HEREBY RATIFYING AND CONFIRMING all that said attorneys
and agents, or any one of them, shall do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, the undersigned has subscribed these presents this 14th
day of January, 1994.
/s/ Roger G. Ackerman
<PAGE>
Exhibit 24
CORNING INCORPORATED
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned Director and/or Officer
of Corning Incorporated, a New York corporation, hereby constitutes and
appoints Van C. Campbell, Larry Aiello and William C. Ughetta, or any of
them, his true and lawful attorneys and agents, in the name and on behalf of
the undersigned, to do any and all acts and things and execute any and all
instruments which the said attorneys and agents, or any one of them, may deem
necessary or advisable to enable Corning Incorporated to comply with the
Securities Act of 1933, as amended and any rules, regulations and
requirements of the Securities and Exchange Commission in respect thereof, in
connection with the registration under the Securities Act of 1933 of up to
8,000,000 shares of the Common Stock of Corning Incorporated, including
specifically, but without limiting the generality of the foregoing, the power
and authority to sign the name of the undersigned in his capacity as Director
and/or Officer of Corning Incorporated to a Registration Statement on Form
S-3 and/or such other form as may be appropriate to be filed with the
Securities and Exchange Commission in respect of said shares of Common Stock,
to any and all amendments to the said Registration Statements, including
Post-Effective Amendments, and to any and all instruments and documents filed
as a part of or in connection with the said Registration Statement or
amendments thereto; HEREBY RATIFYING AND CONFIRMING all that said attorneys
and agents, or any one of them, shall do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, the undersigned has subscribed these presents this 14th
day of January, 1994.
/s/ Barber B. Conable, Jr.
<PAGE>
Exhibit 24
CORNING INCORPORATED
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned Director and/or Officer
of Corning Incorporated, a New York corporation, hereby constitutes and
appoints Van C. Campbell, Larry Aiello and William C. Ughetta, or any of
them, his true and lawful attorneys and agents, in the name and on behalf of
the undersigned, to do any and all acts and things and execute any and all
instruments which the said attorneys and agents, or any one of them, may deem
necessary or advisable to enable Corning Incorporated to comply with the
Securities Act of 1933, as amended and any rules, regulations and
requirements of the Securities and Exchange Commission in respect thereof, in
connection with the registration under the Securities Act of 1933 of up to
8,000,000 shares of the Common Stock of Corning Incorporated, including
specifically, but without limiting the generality of the foregoing, the power
and authority to sign the name of the undersigned in his capacity as Director
and/or Officer of Corning Incorporated to a Registration Statement on Form
S-3 and/or such other form as may be appropriate to be filed with the
Securities and Exchange Commission in respect of said shares of Common Stock,
to any and all amendments to the said Registration Statements, including
Post-Effective Amendments, and to any and all instruments and documents filed
as a part of or in connection with the said Registration Statement or
amendments thereto; HEREBY RATIFYING AND CONFIRMING all that said attorneys
and agents, or any one of them, shall do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, the undersigned has subscribed these presents this 14th
day of January, 1994.
/s/ David A. Duke
<PAGE>
Exhibit 24
CORNING INCORPORATED
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned Director and/or Officer
of Corning Incorporated, a New York corporation, hereby constitutes and
appoints Van C. Campbell, Larry Aiello and William C. Ughetta, or any of
them, his true and lawful attorneys and agents, in the name and on behalf of
the undersigned, to do any and all acts and things and execute any and all
instruments which the said attorneys and agents, or any one of them, may deem
necessary or advisable to enable Corning Incorporated to comply with the
Securities Act of 1933, as amended and any rules, regulations and
requirements of the Securities and Exchange Commission in respect thereof, in
connection with the registration under the Securities Act of 1933 of up to
8,000,000 shares of the Common Stock of Corning Incorporated, including
specifically, but without limiting the generality of the foregoing, the power
and authority to sign the name of the undersigned in his capacity as Director
and/or Officer of Corning Incorporated to a Registration Statement on Form
S-3 and/or such other form as may be appropriate to be filed with the
Securities and Exchange Commission in respect of said shares of Common Stock,
to any and all amendments to the said Registration Statements, including
Post-Effective Amendments, and to any and all instruments and documents filed
as a part of or in connection with the said Registration Statement or
amendments thereto; HEREBY RATIFYING AND CONFIRMING all that said attorneys
and agents, or any one of them, shall do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, the undersigned has subscribed these presents this 14th
day of January, 1994.
/s/ James W. Kinnear
<PAGE>
Exhibit 24
CORNING INCORPORATED
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned Director and/or Officer
of Corning Incorporated, a New York corporation, hereby constitutes and
appoints Van C. Campbell, Larry Aiello and William C. Ughetta, or any of
them, his true and lawful attorneys and agents, in the name and on behalf of
the undersigned, to do any and all acts and things and execute any and all
instruments which the said attorneys and agents, or any one of them, may deem
necessary or advisable to enable Corning Incorporated to comply with the
Securities Act of 1933, as amended and any rules, regulations and
requirements of the Securities and Exchange Commission in respect thereof, in
connection with the registration under the Securities Act of 1933 of up to
8,000,000 shares of the Common Stock of Corning Incorporated, including
specifically, but without limiting the generality of the foregoing, the power
and authority to sign the name of the undersigned in his capacity as Director
and/or Officer of Corning Incorporated to a Registration Statement on Form
S-3 and/or such other form as may be appropriate to be filed with the
Securities and Exchange Commission in respect of said shares of Common Stock,
to any and all amendments to the said Registration Statements, including
Post-Effective Amendments, and to any and all instruments and documents filed
as a part of or in connection with the said Registration Statement or
amendments thereto; HEREBY RATIFYING AND CONFIRMING all that said attorneys
and agents, or any one of them, shall do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, the undersigned has subscribed these presents this 16th
day of January, 1994.
/s/ James J. O'Connor
<PAGE>
Exhibit 24
CORNING INCORPORATED
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned Director and/or Officer
of Corning Incorporated, a New York corporation, hereby constitutes and
appoints Van C. Campbell, Larry Aiello and William C. Ughetta, or any of
them, his true and lawful attorneys and agents, in the name and on behalf of
the undersigned, to do any and all acts and things and execute any and all
instruments which the said attorneys and agents, or any one of them, may deem
necessary or advisable to enable Corning Incorporated to comply with the
Securities Act of 1933, as amended and any rules, regulations and
requirements of the Securities and Exchange Commission in respect thereof, in
connection with the registration under the Securities Act of 1933 of up to
8,000,000 shares of the Common Stock of Corning Incorporated, including
specifically, but without limiting the generality of the foregoing, the power
and authority to sign the name of the undersigned in his capacity as Director
and/or Officer of Corning Incorporated to a Registration Statement on Form
S-3 and/or such other form as may be appropriate to be filed with the
Securities and Exchange Commission in respect of said shares of Common Stock,
to any and all amendments to the said Registration Statements, including
Post-Effective Amendments, and to any and all instruments and documents filed
as a part of or in connection with the said Registration Statement or
amendments thereto; HEREBY RATIFYING AND CONFIRMING all that said attorneys
and agents, or any one of them, shall do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, the undersigned has subscribed these presents this 14th
day of January, 1994.
/s/ Catherine A. Rein
