10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.  20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2016

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number:  1-3247

CORNING INCORPORATED

(Exact name of registrant as specified in its charter)

New York	16-0393470
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

One Riverfront Plaza, Corning, New York	14831
(Address of principal executive offices)	(Zip Code)

607-974-9000

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.

Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	x	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ¨ No x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class	Outstanding as of October 14, 2016
Corning’s Common Stock, $0.50 par value per share	951,225,180 shares

© 2016 Corning Incorporated. All Rights Reserved.

1

INDEX

PART I – FINANCIAL INFORMATION
	Page
Item 1. Financial Statements
Consolidated Statements of Income (Unaudited) for the three and nine months ended September 30, 2016 and 2015	3
Consolidated Statements of Comprehensive Income (Unaudited) for the three and nine months ended September 30, 2016 and 2015	4
Consolidated Balance Sheets (Unaudited) at September 30, 2016 and December 31, 2015	5
Consolidated Statements of Cash Flows (Unaudited) for the nine months ended September 30, 2016 and 2015	6
Notes to Consolidated Financial Statements (Unaudited)	7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	29
Item 3. Quantitative and Qualitative Disclosures About Market Risk	58
Item 4. Controls and Procedures	58
PART II – OTHER INFORMATION
Item 1. Legal Proceedings	59
Item 1A.  Risk Factors	59
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	60
Item 6. Exhibits	61
Signatures	62

© 2016 Corning Incorporated. All Rights Reserved.

2

CORNING INCORPORATED AND SUBSIDIARY COMPANIES

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited; in millions, except per share amounts)

	Three months ended September 30,				Nine months ended September 30,
	2016		2015		2016		2015
Net sales	$	2,507	$	2,272	$	6,914	$	6,880
Cost of sales		1,466		1,380		4,158		4,084
Gross margin		1,041		892		2,756		2,796
Operating expenses:
Selling, general and administrative expenses		302		307		1,104		960
Research, development and engineering expenses		187		181		569		561
Amortization of purchased intangibles		17		12		46		40
Restructuring, impairment and other charges						78
Operating income		535		392		959		1,235
Equity in earnings of affiliated companies		19		39		119		195
Interest income		9		6		21		16
Interest expense		(41)		(38)		(122)		(101)
Translated earnings contract (loss) gain, net		(237)		(149)		(2,295)		42
Gain on realignment of equity investment						2,676
Other expense, net		(28)		(32)		(70)		(70)
Income before income taxes		257		218		1,288		1,317
Benefit (provision) for income taxes (Note 5)		27		(6)		835		(202)
Net income attributable to Corning Incorporated	$	284	$	212	$	2,123	$	1,115
Earnings per common share attributable to Corning Incorporated:
Basic (Note 6)	$	0.27	$	0.16	$	1.96	$	0.84
Diluted (Note 6)	$	0.26	$	0.15	$	1.81	$	0.82
Dividends declared per common share (1)	$	0.135	$	0.12	$	0.405	$	0.24

(1)   The first quarter 2015 dividend was declared on December 3, 2014.

The accompanying notes are an integral part of these consolidated financial statements.

© 2016 Corning Incorporated. All Rights Reserved.

3

CORNING INCORPORATED AND SUBSIDIARY COMPANIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited; in millions)

	Three months ended September 30,				Nine months ended September 30,
	2016		2015		2016		2015
Net income attributable to Corning Incorporated	$	284	$	212	$	2,123	$	1,115
Foreign currency translation adjustments and other		245		(181)		869		(477)
Net unrealized (losses) gains on investments						(3)		1
Unamortized (losses) gains and prior service credits (costs) for postretirement benefit plans		(5)		6		260		12
Net unrealized gains (losses) on designated hedges		11		(37)		(30)		(32)
Other comprehensive income (loss), net of tax (Note 15)		251		(212)		1,096		(496)
Comprehensive income attributable to Corning Incorporated	$	535	$	0	$	3,219	$	619

The accompanying notes are an integral part of these consolidated financial statements.

© 2016 Corning Incorporated. All Rights Reserved.

4

CORNING INCORPORATED AND SUBSIDIARY COMPANIES

CONSOLIDATED BALANCE SHEETS

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

	September 30, 2016		December 31, 2015
Assets
Current assets:
Cash and cash equivalents	$	4,821	$	4,500
Short-term investments, at fair value				100
Trade accounts receivable, net of doubtful accounts and allowances - $62 and $48		1,645		1,372
Inventories, net of inventory reserves - $160 and $146 (Note 8)		1,516		1,385
Other current assets		497		912
Total current assets		8,479		8,269
Investments (Note 9)		352		1,975
Property, plant and equipment, net of accumulated depreciation - $10,206 and $9,188		13,293		12,648
Goodwill, net (Note 10)		1,569		1,380
Other intangible assets, net (Note 10)		797		706
Deferred income taxes (Note 5)		3,110		2,056
Other assets		1,209		1,493
Total Assets	$	28,809	$	28,527
Liabilities and Equity
Current liabilities:
Current portion of long-term debt and short-term borrowings (Note 4)	$	7	$	572
Accounts payable		933		934
Other accrued liabilities (Note 3 and Note 12)		1,354		1,308
Total current liabilities		2,294		2,814
Long-term debt (Note 4)		3,916		3,890
Postretirement benefits other than pensions (Note 11)		708		718
Other liabilities (Note 3 and Note 12)		4,104		2,242
Total liabilities		11,022		9,664
Commitments, contingencies and guarantees (Note 3)
Shareholders’ equity (Note 15):
Convertible preferred stock, Series A – Par value $100 per share; Shares authorized 3,100; Shares issued: 2,300		2,300		2,300
Common stock – Par value $0.50 per share; Shares authorized 3.8 billion; Shares issued: 1,689 million and 1,681 million		844		840
Additional paid-in capital – common stock		13,340		13,352
Retained earnings		15,460		13,832
Treasury stock, at cost; Shares held: 738 million and 551 million		(13,508)		(9,725)
Accumulated other comprehensive loss		(715)		(1,811)
Total Corning Incorporated shareholders’ equity		17,721		18,788
Noncontrolling interests		66		75
Total equity		17,787		18,863
Total Liabilities and Equity	$	28,809	$	28,527

The accompanying notes are an integral part of these consolidated financial statements.

© 2016 Corning Incorporated. All Rights Reserved.

5

CORNING INCORPORATED AND SUBSIDIARY COMPANIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited; in millions)

	Nine months ended September 30,
	2016		2015
Cash Flows from Operating Activities:
Net income	$	2,123	$	1,115
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		844		842
Amortization of purchased intangibles		46		40
Restructuring, impairment and other charges		78
Stock compensation charges		33		36
Equity in earnings of affiliated companies		(119)		(195)
Dividends received from affiliated companies		20		143
Deferred tax (benefit) provision		(1,047)		187
Restructuring payments		(10)		(38)
Employee benefit payments less than expense				5
Losses (gains) on foreign currency hedges related to translated earnings		2,295		(42)
Unrealized translation (gains) losses on transactions		(177)		303
Contingent consideration fair value adjustment		(40)
Gain on realignment of equity investment		(2,676)
Changes in certain working capital items:
Trade accounts receivable		(184)		52
Inventories		(69)		(60)
Other current assets		(42)		(204)
Accounts payable and other current liabilities		14		(294)
Other, net		6		(45)
Net cash provided by operating activities		1,095		1,845
Cash Flows from Investing Activities:
Capital expenditures		(815)		(939)
Acquisitions of business, net of cash acquired		(279)		(531)
Investment in unconsolidated entities		(14)		(33)
Cash received on realignment of equity investment		4,818
(Payments) proceeds from loan repayments from unconsolidated entities		(10)		6
Short-term investments – acquisitions		(20)		(859)
Short-term investments – liquidations		121		1,046
Realized gains on foreign currency hedges related to translated earnings		146		489
Other, net		9		(1)
Net cash provided by (used in) investing activities		3,956		(822)
Cash Flows from Financing Activities:
Net repayments of short-term borrowings and current portion of long-term debt		(85)
Principal payments under capital lease obligations		(1)		(1)
Proceeds from issuance of short-term debt				2
Proceeds from issuance of long-term debt				745
Payments from issuance of commercial paper		(481)
Payments from settlement of interest rate swap arrangements				(10)
Proceeds from the exercise of stock options		86		99
Repurchases of common stock for treasury		(3,884)		(1,905)
Dividends paid		(493)		(519)
Net cash used in financing activities		(4,858)		(1,589)
Effect of exchange rates on cash		128		(303)
Net increase (decrease) in cash and cash equivalents		321		(869)
Cash and cash equivalents at beginning of period		4,500		5,309
Cash and cash equivalents at end of period	$	4,821	$	4,440

The accompanying notes are an integral part of these consolidated financial statements.

© 2016 Corning Incorporated. All Rights Reserved.

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CORNING INCORPORATED AND SUBSIDIARY COMPANIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1.      Significant Accounting Policies

Basis of Presentation

In these notes, the terms “Corning,” “Company,” “we,” “us,” or “our” mean Corning Incorporated and its subsidiary companies.

The accompanying unaudited consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”) for interim financial information.  Certain information and note disclosures normally included in financial statements prepared in accordance with GAAP have been omitted or condensed.  These interim consolidated financial statements should be read in conjunction with Corning’s consolidated financial statements and notes thereto included in its Annual Report on Form 10-K for the year ended December 31, 2015 (“2015 Form 10-K”).

The unaudited consolidated financial statements reflect all adjustments which, in the opinion of management, are necessary for a fair statement of the results of operations, financial position and cash flows for the interim periods presented.  All such adjustments are of a normal recurring nature.  The results for interim periods are not necessarily indicative of results which may be expected for any other interim period or for the full year.

Certain prior year amounts have been reclassified to conform to the current-year presentation.  These reclassifications had no impact on our results of operations, financial position, or changes in shareholders’ equity.

New Accounting Standards

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. (“ASU”) 2014-09, Revenue from Contracts with Customers, as a new Topic, Accounting Standards Codification (“ASC”) Topic 606.  The new revenue recognition standard provides a five-step analysis of transactions to determine when and how revenue is recognized.  The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.  This ASU originally was effective for annual periods beginning after December 15, 2016, including interim periods within that reporting period.  This ASU shall be applied retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption.

In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606), deferring the effective date of ASU 2014-09 by one year.  We can elect to adopt the provisions of ASU 2014-09 for annual periods beginning after December 15, 2017, including interim periods within that reporting period.  The FASB also agreed to allow entities to choose to adopt the standard as of the original effective date.  We are currently assessing the adoption date and potential impact of adopting ASU 2014-09 on our financial statements and related disclosures.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which supersedes all existing guidance on accounting for leases in ASC Topic 840.  ASU 2016-02 is intended to provide enhanced transparency and comparability by requiring lessees to record right-of-use assets and corresponding lease liabilities on the balance sheet.  ASU 2016-02 will continue to classify leases as either finance or operating, with classification affecting the pattern of expense recognition in the statement of income.  ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years.  Early adoption is permitted.  ASU 2016-02 is required to be applied with a modified retrospective approach to each prior reporting period presented with various optional practical expedients.  We are currently assessing the adoption date and the potential impact of adopting ASU 2016-02 on our financial statements and related disclosures.

© 2016 Corning Incorporated. All Rights Reserved.

7

In March 2016, the FASB issued ASU 2016-09, Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting.  ASU 2016-09 changes how companies account for certain aspects of share-based payment awards to employees, including the accounting for income taxes, forfeitures and statutory tax withholding requirements, as well as classification in the statement of cash flows.  ASU 2016-09 is effective for annual periods beginning after December 15, 2016, including interim periods within those annual periods.  If an entity early adopts in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period and the entity must adopt all of the amendments from ASU 2016-09 in the same period.  We are currently assessing the potential impact of adopting ASU 2016-09 on our financial statements and related disclosures.  Corning does not expect adoption of this standard to have a material impact on its consolidated results of operations and financial condition.

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments.  ASU 2016-15 refines how companies classify certain aspects of the cash flow statement in regards to debt prepayment, settlement of debt instruments, contingent consideration payments, proceeds from insurance claims and life insurance policies, distribution from equity method investees, beneficial interests in securitization transactions and separately identifiable cash flows.  ASU 2016-15 is effective for annual periods beginning after December 15, 2017, and for interim periods within fiscal years beginning after December 15, 2018.  Early adoption is permitted.  We are currently assessing the adoption date and the potential impact of adopting ASU 2016-15 on our financial statements and related disclosures.

In October 2016, the FASB issued ASU No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory, which reduces the complexity in the accounting standards by allowing the recognition of current and deferred income taxes for an intra-entity asset transfer, other than inventory, when the transfer occurs. Historically, recognition of the income tax consequence was not recognized until the asset was sold to an outside party.  This amendment should be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption.  ASU 2016-16 is effective for annual periods beginning after December 15, 2017, including interim reporting periods within those annual reporting periods.  Early adoption is permitted for all entities as of the beginning of an annual reporting period for which financial statements (interim or annual) have not been issued or made available for issuance.  We are currently evaluating the impact of ASU 2016-16 on our consolidated financial statements and related disclosures.

2.      Restructuring, Impairment and Other Charges

2016 Activity

In the first three quarters of 2016, we recorded charges of $78 million, pre-tax, for employee related costs, asset disposals, and exit costs associated with some minor restructuring activities in all of the segments, with total cash expenditures estimated to be $15 million.

© 2016 Corning Incorporated. All Rights Reserved.

8

The following table summarizes the restructuring, impairment and other charges for the nine months ended September 30, 2016 (in millions):

	Reserve at January 1, 2016		Net Charges/ Reversals		Non-cash adjustments		Cash payments		Reserve at September 30, 2016
Restructuring:
Employee related costs	$	3	$	15	$	(1)	$	(9)	$	8
Other charges				1				(1)
Total restructuring activity	$	3	$	16	$	(1)	$	(10)	$	8
Disposal of long-lived assets			$	62
Total restructuring, impairment and other charges			$	78

Cash payments for employee-related and exit activity related to the 2016 restructuring activities are expected to be substantially completed in 2016.

The year-to-date cost of these plans for each of our reportable segments was as follows (in millions):

Operating segment	Employee- related and other charges
Display Technologies	$	4
Optical Communications		6
Environmental Technologies		5
Specialty Materials		12
Life Sciences		3
All Other		40
Corporate		8
Total restructuring, impairment and other charges	$	78

© 2016 Corning Incorporated. All Rights Reserved.

9

3.      Commitments, Contingencies and Guarantees

Asbestos Claims

Corning and PPG Industries, Inc. each owned 50% of the capital stock of Pittsburgh Corning Corporation (“PCC”).  PCC filed for Chapter 11 reorganization in 2000 and the Modified Third Amended Plan of Reorganization for PCC (the “Plan”) became effective in April 2016.  At December 31, 2015, the Company’s liability under the Plan was estimated to be $528 million.  At September 30, 2016, this estimated liability was $290 million, due to the Company’s contribution, in the second quarter of 2016, of its equity interests in PCC and Pittsburgh Corning Europe N.V. in the total amount of $238 million, as required by the Plan.  Corning recognized a gain of $56 million in the second quarter of 2016 in the selling, general and administrative expenses line of the Company’s Consolidated Statements of Income for the difference between the fair value of the asbestos litigation liability and carrying value of the investment.  The remaining $290 million liability is for the fixed series of payments required by the Plan.  At September 30, 2016, the total amount of the payments due in years 2018 through 2022 is $220 million and is classified as a non-current liability.  The remaining $70 million payment due in the second quarter of 2017 is classified as a current liability as it is expected to be made within the next twelve months.  Additionally, Corning is a defendant in other cases alleging injuries from asbestos unrelated to PCC (the “non-PCC asbestos claims”) which had been stayed pending the confirmation of the Plan.  The stay was lifted on August 25, 2016.  Corning previously established a $150 million reserve for these non-PCC asbestos claims.  The estimated reserve represents the undiscounted projection of claims and related legal fees over the next 20 years.  The amount may need to be adjusted in future periods as more data becomes available; however, we cannot estimate any lesser or greater liabilities at this time.

A summary of changes of the estimated asbestos litigation liability is as follows (in millions):

	Amended PCC Plan				Non-PCC		Total Asbestos Litigation Liability
	Equity Interests		Fixed Series of Payments
Fair Value of Asbestos Litigation Liability as of Dec. 31, 2015	$	238	$	290	$	150	$	678
Less: Contribution of PCC & PCE Equity Interests - Carrying Value		182		-		-		182
Gain on Contribution of Equity Interests		56		-		-		56
Asbestos Litigation Liability as of September 30, 2016	$	-	$	290	$	150	$	440

Non-PCC Asbestos Claims Insurance Litigation

Several of Corning’s insurers have commenced litigation in state courts for a declaration of the rights and obligations of the parties under insurance policies, including rights that may be affected by the potential resolutions described above.  Corning has resolved these issues with a majority of its relevant insurers, and is vigorously contesting these cases with the remaining relevant insurers.  Management is unable to predict the outcome of the litigation with these remaining insurers.

© 2016 Corning Incorporated. All Rights Reserved.

10

Other Commitments and Contingencies

We are required, at the time a guarantee is issued, to recognize a liability for the fair value or market value of the obligation it assumes.  In the normal course of our business, we do not routinely provide significant third-party guarantees.  Generally, any third party guarantees provided by Corning are limited to certain financial guarantees including stand-by letters of credit and performance bonds, and the incurrence of contingent liabilities in the form of purchase price adjustments related to attainment of milestones.  When provided, these guarantees have various terms, and none of these guarantees are individually significant.

As of September 30, 2016 and December 31, 2015, contingent guarantees totaled a notional value of $201 million and $184 million, respectively.  We believe a significant majority of these contingent guarantees will expire without being funded.  We also were contingently liable for purchase obligations of $255 million and $220 million, at September 30, 2016 and December 31, 2015, respectively.

Product warranty liability accruals were considered insignificant at September 30, 2016 and December 31, 2015.

Corning is a defendant in various lawsuits, including environmental, product-related suits, and is subject to various claims that arise in the normal course of business.  In the opinion of management, the likelihood that the ultimate disposition of these matters will have a material adverse effect on Corning’s consolidated financial position, liquidity, or results of operations, is remote.  Other than certain asbestos related claims, there are no other material loss contingencies related to litigation.

Corning has been named by the Environmental Protection Agency (“the Agency”) under the Superfund Act, or by state governments under similar state laws, as a potentially responsible party for 17 active hazardous waste sites.  Under the Superfund Act, all parties who may have contributed any waste to a hazardous waste site, identified by the Agency, are jointly and severally liable for the cost of cleanup unless the Agency agrees otherwise.  It is Corning’s policy to accrue for its estimated liability related to Superfund sites and other environmental liabilities related to property owned by Corning based on expert analysis and continual monitoring by both internal and external consultants.  At September 30, 2016 and December 31, 2015, Corning had accrued approximately $45 million (undiscounted) and $37 million (undiscounted), respectively, for the estimated liability for environmental cleanup and related litigation.  Based upon the information developed to date, management believes that the accrued reserve is a reasonable estimate of the Company’s liability and that the risk of an additional loss in an amount materially higher than that accrued is remote.

The ability of certain subsidiaries and affiliated companies to transfer funds is limited by provisions of foreign government regulations, affiliate agreements and certain loan agreements.  At September 30, 2016, the amount of equity subject to such restrictions for consolidated subsidiaries and affiliated companies was not significant.  While this amount is legally restricted, it does not result in operational difficulties since we have generally permitted subsidiaries to retain a majority of equity to support their growth programs.

4.      Debt

Based on borrowing rates currently available to us for loans with similar terms and maturities, the fair value of long-term debt was $4.3 billion at September 30, 2016 and $4.1 billion at December 31, 2015, compared to recorded book values of $3.9 billion at September 30, 2016 and December 31, 2015.  The Company measures the fair value of its long-term debt using Level 2 inputs based primarily on current market yields for its existing debt traded in the secondary market.

On July 20, 2016, Corning’s Board of Directors approved a $1 billion increase to our commercial paper program, raising it to $2 billion.  If needed, this program is supported by our $2 billion revolving credit facility that expires in 2019.  Corning did not have outstanding commercial paper at September 30, 2016.

© 2016 Corning Incorporated. All Rights Reserved.

11

Debt Issuances

2015

In the second quarter of 2015, we issued $375 million of 1.50% senior unsecured notes that mature on May 8, 2018 and $375 million of 2.90% senior unsecured notes that mature on May 15, 2022.  We can redeem these debentures at any time, subject to certain stipulations.

5.      Income Taxes

Our benefit (provision) for income taxes and the related effective income tax rates were as follows (in millions):

	Three months ended September 30,				Nine months ended September 30,
	2016		2015		2016		2015
Benefit (provision) for income taxes	$	27	$	(6)	$	835	$	(202)
Effective tax rate		(10.5%)		2.8%		(64.8%)		15.3%

For the three months ended September 30, 2016, the effective income tax rate differed from the U.S. statutory rate of 35% primarily due to the following benefits:

·   Rate differences on income (loss) of consolidated foreign companies, including the benefit of excess foreign tax credits resulting from the inclusion of foreign earnings in U.S. income.

For the nine months ended September 30, 2016, the effective income tax rate differed from the U.S. statutory rate of 35% primarily due to the following benefits:

·   Rate differences on income (loss) of consolidated foreign companies, including the benefit of excess foreign tax credits resulting from the inclusion of foreign earnings in U.S. income;

·   The impact of equity in earnings of nonconsolidated affiliates reported in the financials, net of tax; and

·   The tax-free nature of the realignment of our equity interest in Dow Corning during the period, as well as the release of the deferred tax liability related to Corning’s tax on Dow Corning’s undistributed earnings as of the date of the transaction.

For the three and nine months ended September 30, 2015, the effective income tax rate differed from the U.S. statutory rate of 35% primarily due to the following benefits:

·   Rate differences on income (loss) of consolidated foreign companies, including the benefit of excess foreign tax credits resulting from the inclusion of high-taxed foreign earnings in U.S. income; and

·   The impact of equity in earnings of nonconsolidated affiliates reported in the financials, net of tax.

Corning continues to indefinitely reinvest substantially all of its foreign earnings, with the exception of an immaterial amount of current earnings that have very low or no tax cost associated with their repatriation.  Our current analysis indicates that we have sufficient U.S. liquidity, including borrowing capacity, to fund foreseeable U.S. cash needs without requiring the repatriation of foreign cash.  Significant one time or unusual items that may impact our ability or intent to keep our foreign earnings and cash indefinitely reinvested include significant U.S. acquisitions, stock repurchases, shareholder dividends, changes in tax laws, derivative contract settlements or the development of tax planning ideas that allow us to repatriate earnings at minimal or no tax cost, and/or a change in our circumstances or economic conditions that negatively impact our ability to borrow or otherwise fund U.S. needs from existing U.S. sources.  While it remains impracticable to calculate the tax cost of repatriating our total unremitted foreign earnings, such cost could be material to the results of operations of Corning in a particular period.

© 2016 Corning Incorporated. All Rights Reserved.

12

While we expect the amount of unrecognized tax benefits to change in the next 12 months, we do not expect the change to have a significant impact on the results of operations or our financial position.

6.      Earnings per Common Share

The following table sets forth the computation of basic and diluted earnings per common share (in millions, except per share amounts):

	Three months ended September 30,				Nine months ended September 30,
	2016		2015		2016		2015
Net income attributable to Corning Incorporated	$	284	$	212	$	2,123	$	1,115
Less:  Series A convertible preferred stock dividend		24		24		73		73
Net income available to common stockholders – basic		260		188		2,050		1,042
Plus:  Series A convertible preferred stock dividend (1)		24				73		73
Net income available to common stockholders – diluted	$	284	$	188	$	2,123	$	1,115
Weighted-average common shares outstanding – basic		978		1,210		1,046		1,241
Effect of dilutive securities:
Stock options and other dilutive securities		9		8		9		10
Series A convertible preferred stock (1)		115				115		115
Weighted-average common shares outstanding – diluted		1,102		1,218		1,170		1,366
Basic earnings per common share	$	0.27	$	0.16	$	1.96	$	0.84
Diluted earnings per common share	$	0.26	$	0.15	$	1.81	$	0.82
Antidilutive potential shares excluded from diluted earnings per common share:
Series A convertible preferred stock (1)				115
Employee stock options and awards		13		29		18		22
Accelerated share repurchase forward contract		14				14
Total		27		144		32		22

(1) In the three months ended September 30, 2015, the Series A convertible preferred stock was anti-dilutive and therefore excluded from the calculation of diluted earnings per share.

7.      Available-for-Sale Investments

At September 30, 2016 and December 31, 2015, the Company held $0 million and $100 million of short-term investments (U.S. government and agency securities), respectively.  At September 30, 2016 and December 31, 2015, the Company held long-term investments of $30 million and $33 million in asset-backed securities, respectively.  The Company’s investments in available-for-sale securities are held at fair value with amortized cost of $33 million and $37 million at September 30, 2016 and December 31, 2015, respectively.

We have no plans to sell, nor do we believe it is more likely than not that we would be required to sell, the long-term investment asset-backed securities (which are collateralized by mortgages) before recovery of their amortized cost basis.  It is possible that a significant degradation in the delinquency or foreclosure rates in the underlying assets could cause further temporary or other-than-temporary impairments in the future.

For the nine months ended September 30, 2016 and 2015, proceeds from sales and maturities of short-term investments totaled approximately $121 million and $1.0 billion, respectively.

© 2016 Corning Incorporated. All Rights Reserved.

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8.      Inventories, Net of Inventory Reserves

Inventories, net of inventory reserves comprise the following (in millions):

	September 30, 2016		December 31, 2015
Finished goods	$	636	$	633
Work in process		301		264
Raw materials and accessories		278		200
Supplies and packing materials		301		288
Total inventories, net of inventory reserves	$	1,516	$	1,385

9.      Investments

On May 31, 2016, Corning completed the strategic realignment of its equity investment in Dow Corning Corporation (“Dow Corning”) pursuant to the Transaction Agreement announced in December 2015.  Under the terms of the Transaction Agreement, Corning exchanged with Dow Corning its 50% stock interest in Dow Corning for 100% of the stock of a newly formed entity, which holds an equity interest in Hemlock Semiconductor Group (“HSG”) and approximately $4.8 billion in cash.

Prior to realignment, HSG, a wholly owned and consolidated subsidiary of Dow Corning, was an indirect equity investment of Corning.  Upon completion of the exchange, Corning now has a direct equity investment in HSG.  Because our ownership percentage in HSG did not change as a result of the realignment, the investment in HSG is recorded at its carrying value, which had a negative carrying value of $383 million at the transaction date.  The negative carrying value resulted from a one-time charge to this entity in 2014 for the permanent abandonment of certain assets.  Excluding this charge, the entity is profitable and is expected to recover its equity in the near term.

Corning’s financial statements as of September 30, 2016 include the positive impact of the release of a deferred tax liability of $105 million related to Corning’s tax on Dow Corning’s earnings that were not distributed as of the date of the transaction and a non-taxable gain of $2,676 million on the realignment.  Details of the gain are illustrated below (in millions):

Cash	$	4,818
Carrying Value of Dow Corning Equity Investment		(1,560)
Carrying Value of HSG Equity Investment		(383)
Other (1)		(199)
Gain	$	2,676

(1)   Primarily consists of the release of accumulated other comprehensive income items related to unamortized actuarial losses related to Dow Corning’s pension plan and foreign currency translation gains in the amounts of $260 million and $45 million, respectively.

© 2016 Corning Incorporated. All Rights Reserved.

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Investments comprise the following (in millions):

	Ownership interest			September 30, 2016		December 31, 2015
Affiliated companies accounted for by the equity method
Dow Corning (1)		50%				$	1,483
All other (1)	20%	to	50%	$	285		422
					285		1,905
Other investments					67		70
Subtotal Investment Assets				$	352	$	1,975
Affiliated companies accounted for by the equity method
HSG (2)(3)		50%		$	343
Subtotal Investment Liabilities				$	343

(1)   Amounts reflect Corning’s direct ownership interests in the respective affiliated companies at September 30, 2016 and December 31, 2015.  Corning does not control any of such entities.

(2)   HSG indirectly holds an 80.5% interest in a HSG operating partnership.

(3)   The negative carrying value of the investment in HSG is recorded in Other Liabilities.

10.      Goodwill and Other Intangible Assets

The carrying amount of goodwill by segment for the periods ended September 30, 2016 and December 31, 2015 is as follows (in millions):

	Optical Communications		Display Technologies		Specialty Materials		Life Sciences		All Other		Total
Balance at December 31, 2015	$	439	$	128	$	150	$	562	$	101	$	1,380
Acquired goodwill (1)		175										175
Measurement period adjustment (2)		(6)										(6)
Foreign currency translation adjustment		7		5				6		2		20
Balance at September 30, 2016	$	615	$	133	$	150	$	568	$	103	$	1,569

(1) The Company completed an acquisition in the Optical Communications segment during the second quarter of 2016 with a purchase price of $296 million.

(2) In the third quarter of 2016, minor adjustments were made to the preliminary allocation of the total purchase consideration related to a second quarter acquisition.  The allocation is expected to be finalized in the fourth quarter of 2016, and any adjustments are not expected to be material.

Corning’s gross goodwill balances for the periods ended September 30, 2016 and December 31, 2015 were $8.1 billion and $7.9 billion, respectively.  Accumulated impairment losses were $6.5 billion for the periods ended September 30, 2016 and December 31, 2015, and were generated primarily through goodwill impairments related to the Optical Communications segment.

© 2016 Corning Incorporated. All Rights Reserved.

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Other intangible assets are as follows (in millions):

	September 30, 2016						December 31, 2015
	Gross		Accumulated amortization		Net		Gross		Accumulated amortization		Net
Amortized intangible assets:
Patents, trademarks, and trade names	$	367	$	176	$	191	$	350	$	162	$	188
Customer lists and other		744		138		606		621		103		518
Total	$	1,111	$	314	$	797	$	971	$	265	$	706

Corning’s amortized intangible assets are primarily related to the Optical Communications and Life Sciences segments.  The net carrying amount of intangible assets increased during the first nine months of 2016, primarily due to acquisitions of $127 million of other intangible assets and foreign currency translation adjustments of $11 million, offset by amortization of $46 million.

Amortization expense related to these intangible assets is estimated to be $67 million for 2016, $72 million annually from 2017 to 2018, $71 million for 2019, and $66 million annually from 2020 to 2021.

11.      Employee Retirement Plans

The following table summarizes the components of net periodic benefit cost for Corning’s defined benefit pension and postretirement health care and life insurance plans (in millions):

	Pension benefits								Postretirement benefits
	Three months ended September 30,				Nine months ended September 30,				Three months ended September 30,				Nine months ended September 30,
	2016		2015		2016		2015		2016		2015		2016		2015
Service cost	$	22	$	22	$	65	$	67	$	3	$	3	$	7	$	10
Interest cost		31		36		93		109		6		8		19		24
Expected return on plan assets		(41)		(44)		(124)		(133)
Amortization of net loss												1		(1)		3
Amortization of prior service cost (credit)		1		2		4		5		(1)		(2)		(3)		(5)
Recognition of actuarial loss		26				60		8
Total pension and postretirement benefit expense	$	39	$	16	$	98	$	56	$	8	$	10	$	22	$	32

The recognition of actuarial loss in the three months ended September 30, 2016 resulted from small settlements in several of our benefit plans which triggered plan remeasurements.  In addition to the settlements occurring in the third quarter of 2016, results in the nine months ended September 30, 2016 also included the impact of the finalization of our 2015 benefit plan valuations.

© 2016 Corning Incorporated. All Rights Reserved.

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12. Other Liabilities

Other liabilities follow (in millions):

	September 30, 2016		December 31, 2015
Current liabilities:
Wages and employee benefits	$	472	$	491
Income taxes		149		53
Asbestos and other litigation reserves		73		238
Derivative instruments		204		55
Other current liabilities		456		471
Other accrued liabilities	$	1,354	$	1,308
Non-current liabilities:
Asbestos and other litigation reserves	$	394	$	440
Derivative instruments		1,543		88
Investment in Hemlock Semiconductor Group (1)		343
Defined benefit pension plan liabilities		762		672
Other non-current liabilities		1,062		1,042
Other liabilities	$	4,104	$	2,242

(1)   The negative carrying value resulted from a one-time charge to this entity in 2014 for the permanent abandonment of certain assets.

Asbestos Litigation

Corning and PPG each owned 50% of the capital stock of PCC.  Over a period of more than two decades, PCC and several other defendants were named in numerous lawsuits involving claims alleging personal injury from exposure to asbestos.  Refer to Note 3 (Commitments, Contingencies and Guarantees) to the consolidated financial statements for additional information on the asbestos litigation.

13.      Hedging Activities

Undesignated Hedges

The table below includes a total gross notional value for translated earnings contracts of $17.6 billion and $12.0 billion at September 30, 2016 and December 31, 2015, respectively.  The translated earnings contracts include purchased and zero-cost collars of $2.8 billion and $5.6 billion and average rate forwards of $14.8 billion and $6.4 billion at September 30, 2016 and December 31, 2015, respectively.  With respect to the purchased and zero-cost collars, the gross notional amount includes the value of both the put and call options.  However, due to the nature of the purchased and zero-cost collars, either the put or the call option can be exercised at maturity.  The total net notional value of the purchased and zero-cost collars was $1.4 billion and $2.9 billion at September 30, 2016 and December 31, 2015, respectively.

© 2016 Corning Incorporated. All Rights Reserved.

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The following tables summarize the notional amounts and respective fair values of Corning’s derivative financial instruments on a gross basis for September 30, 2016 and December 31, 2015 (in millions):

	U.S. Dollar		Asset derivatives			Liability derivatives
	Gross notional amount		Balance sheet location	Fair value		Balance sheet location	Fair value
	Sept. 30, 2016	Dec. 31, 2015		Sept. 30, 2016	Dec. 31, 2015		Sept. 30, 2016	Dec. 31, 2015
Derivatives designated as hedging instruments
Foreign exchange contracts (1)	$    527	$    782	Other current assets	$     1	$     5	Other accrued liabilities	$    (54)	$  (10)
			Other assets		1	Other liabilities	(12)	(23)
Interest rate contracts	550	550	Other assets	7		Other liabilities		(4)
Derivatives not designated as hedging instruments
Foreign exchange contracts, other	759	1,095	Other current assets	2	6	Other accrued liabilities	(36)	(12)
Translated earnings contracts	17,595	11,972	Other current assets	66	511	Other accrued liabilities	(114)	(33)
			Other assets	27	472	Other liabilities	(1,531)	(61)
Total derivatives	$19,431	$14,399		$103	$995		$(1,747)	$(143)

(1) Cash flow hedges with a typical duration of 24 months or less.

The following tables summarize the effect of derivative financial instruments on Corning’s consolidated financial statements for the three months ended September 30, 2016 and 2015 (in millions):

	Effect of designated derivative instruments on the consolidated financial statements for the three months ended September 30
Derivatives in hedging relationships	Gain/(loss) recognized in other comprehensive income (OCI)				Location of gain/(loss) reclassified from accumulated OCI into income (effective)	Gain/(loss) reclassified from accumulated OCI into income (effective) (1)
	2016		2015			2016		2015
Interest rate hedges					Sales	$	1	$	4
					Cost of sales		(13)		1
Foreign exchange contracts	$	26	$	(58)
Total cash flow hedges	$	26	$	(58)		$	(12)	$	5

(1) The amount of hedge ineffectiveness at September 30, 2016 and 2015 was insignificant.

© 2016 Corning Incorporated. All Rights Reserved.

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The following tables summarize the effect of derivative financial instruments on Corning’s consolidated financial statements for the nine months ended September 30, 2016 and 2015 (in millions):

	Effect of  derivative instruments on the consolidated financial statements for the nine months ended September 30
Derivatives in hedging relationships	Gain/(loss) recognized in other comprehensive income (OCI)				Location of gain/(loss) reclassified from accumulated OCI into income (effective)	Gain/(loss) reclassified from accumulated OCI into income (effective) (1)
	2016		2015			2016		2015
Interest rate hedges			$	(7)	Sales	$	2	$	14
					Cost of sales		(27)		7
Foreign exchange contracts	$	(37)		(24)
Total cash flow hedges	$	(37)	$	(31)		$	(25)	$	21

(1) The amount of hedge ineffectiveness at September 30, 2016 and 2015 was insignificant.

The following table summarizes the effect on the consolidated financial statements relating to Corning’s derivative financial instruments (in millions):

Undesignated derivatives	Location of gain/(loss) recognized in income	Gain (loss) recognized in income
		Three months ended September 30,				Nine months ended September 30,
		2016		2015		2016		2015
Foreign exchange contracts – balance sheet	Foreign currency hedge gain (loss), net	$	1	$	(6)	$	(27)	$	7
Foreign exchange contracts – loans	Foreign currency hedge gain (loss), net		(4)		1		(48)		3
Foreign currency hedges related to translated earnings	Foreign currency hedge gain (loss), net		(237)		(149)		(2,295)		42
Total undesignated		$	(240)	$	(154)	$	(2,370)	$	52

14.      Fair Value Measurements

Fair value standards under U.S. GAAP define fair value, establish a framework for measuring fair value in applying generally accepted accounting principles, and require disclosures about fair value measurements.  The standards also identify two kinds of inputs that are used to determine the fair value of assets and liabilities: observable and unobservable.  Observable inputs are based on market data or independent sources while unobservable inputs are based on the Company’s own market assumptions.  Once inputs have been characterized, the inputs are prioritized into one of three broad levels (provided in the table below) used to measure fair value.  Fair value standards apply whenever an entity is measuring fair value under other accounting pronouncements that require or permit fair value measurement and require the use of observable market data when available.

© 2016 Corning Incorporated. All Rights Reserved.

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The following tables provide fair value measurement information for the Company’s major categories of financial assets and liabilities measured on a recurring basis (in millions):

			Fair value measurements at reporting date using
	September 30, 2016		Quoted prices in active markets for identical assets (Level 1)	Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Current assets:
Other current assets (1)	$	68		$	68
Non-current assets:
Other assets (1)(2)	$	350		$	64	$	286
Current liabilities:
Other accrued liabilities (1)	$	204		$	204
Non-current liabilities:
Other liabilities (1)	$	1,543		$	1,543

(1) Derivative assets and liabilities include foreign exchange forward and zero-cost collar contracts, and interest rate swaps which are measured using observable quoted prices for similar assets and liabilities.

(2) Other assets include asset-backed securities which are measured using observable quoted prices for similar assets and contingent consideration assets or liabilities which are measured by applying an option pricing model using projected future revenue and forecasted foreign exchange rates.

			Fair value measurements at reporting date using
	December 31, 2015		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Current assets:
Short-term investments	$	100	$	100
Other current assets (1)	$	522			$	522
Non-current assets:
Other assets (1)(2)	$	752			$	506	$	246
Current liabilities:
Other accrued liabilities (1)	$	55			$	55
Non-current liabilities:
Other liabilities (1)	$	98			$	88	$	10

(1) Derivative assets and liabilities include foreign exchange contracts which are measured using observable quoted prices for similar assets and liabilities.

(2) Other assets include asset-backed securities which are measured using observable quoted prices for similar assets and contingent consideration assets or liabilities which are measured by applying an option pricing model using projected future revenues.

As a result of the acquisition of Samsung Corning Precision Materials in January 2014, the Company has contingent consideration that was measured using unobservable (Level 3) inputs.  Changes in the fair value of the contingent consideration in future periods are valued using an option pricing model and are recorded in Corning’s results in the period of the change.  As of September 30, 2016 and December 31, 2015, the fair value of the potential receipt of the contingent consideration in 2018 was $286 million and $246 million, respectively.

© 2016 Corning Incorporated. All Rights Reserved.

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There were no significant financial assets and liabilities measured on a nonrecurring basis during the nine months ended September 30, 2016.

15.      Shareholders’ Equity

Fixed Rate Cumulative Convertible Preferred Stock, Series A

On January 15, 2014, Corning designated a new series of its preferred stock as Fixed Rate Cumulative Convertible Preferred Stock, Series A, par value $100 per share, and issued 2,300 shares of Preferred Stock at an issue price of $1 million per share, for an aggregate issue price of $2.3 billion.  The Preferred Stock is convertible at the option of the holder and the Company upon certain events, at a conversion rate of 50,000 shares of Corning’s common stock per one share of Preferred Stock, subject to certain anti-dilution provisions.  As of September 30, 2016, the Preferred Stock has not been converted, and none of the anti-dilution provisions have been triggered.

Share Repurchases

On July 28, 2016, Corning entered into an accelerated share repurchase transaction (“ASR”) with Morgan Stanley & Co. LLC (“Morgan Stanley”) to repurchase $2 billion of Corning’s common stock in two tranches of $1.5 billion and $500 million, respectively, each with its own scheduled termination date.  The ASR was executed under the $4 billion share repurchase program authorized on October 26, 2015 (the “2015 Repurchase Program”).  Under the ASR, Corning made a $2 billion aggregate payment to Morgan Stanley on July 28, 2016 and received an initial aggregate delivery of 74.4 million shares of Corning common stock from Morgan Stanley on the same day.  Each tranche is subject to acceleration at Morgan Stanley’s option during an acceleration period prior to its scheduled termination date.  The total number of shares Corning will repurchase under each tranche of the ASR will be based generally upon the average daily volume weighted average price of Corning’s common stock during the repurchase period for such tranche, less a discount and subject to adjustments pursuant to the terms and conditions of the ASR.  Depending on the circumstances at settlement of each tranche, Morgan Stanley may be required to deliver additional shares of common stock to Corning or Corning may be required either to deliver shares of common stock or to make a cash payment to Morgan Stanley.  Final settlement of both tranches of the ASR is scheduled to occur in the fourth quarter of 2016.

In addition to the ASR, during the three and nine months ended September 30, 2016, the Company repurchased 15.3 million and 96 million shares of common stock on the open market for approximately $340 million and $1,901 million, respectively, as part of its 2015 Repurchase Program.

Accumulated Other Comprehensive Income

In the three and nine months ended September 30, 2016 and 2015, the primary changes in accumulated other comprehensive income (“AOCI”) were related to the foreign currency translation adjustment component and the unamortized actuarial losses component.

A summary of changes in the foreign currency translation adjustment component of AOCI is as follows (in millions):

	Three months ended September 30,				Nine months ended September 30,
	2016		2015		2016		2015
Beginning balance	$	(547)	$	(877)	$	(1,171)	$	(581)
Other comprehensive income (loss)		235		(163)		860		(399)
Equity method affiliates		10		(18)		9		(78)
Net current-period other comprehensive income (loss)		245		(181)		869		(477)
Ending balance	$	(302)	$	(1,058)	$	(302)	$	(1,058)

© 2016 Corning Incorporated. All Rights Reserved.

21

In the second quarter of 2016, $45 million cumulative foreign currency translation gain was released as a result of the realignment of Dow Corning and included in the gain on realignment of equity investment.

In the second quarter of 2016, a $22 million cumulative foreign currency translation loss was released as a result of the contribution of our investment in PCE to the PCC litigation trust and included in selling, general and administrative expenses.

There were no material tax effects related to foreign currency translation gains and losses for the three months ended September 30, 2016 and 2015, and for the nine months ended September 30, 2015.  In the nine months ended September 30, 2016, Corning recorded a tax impact of $45 million related to foreign currency translation gains and losses.

A summary of changes in the unamortized actuarial gains (losses) component of AOCI is as follows (in millions) (1):

	Three months ended September 30,				Nine months ended September 30,
	2016		2015		2016		2015
Beginning balance	$	(323)	$	(703)	$	(588)	$	(709)
Other comprehensive (loss) income before reclassifications (2)		(31)		(1)		(64)		5
Amounts reclassified from accumulated other comprehensive income (2)		26		1		60		11
Equity method affiliates (3)				6		264		(4)
Net current-period other comprehensive income		(5)		6		260		12
Ending balance	$	(328)	$	(697)	$	(328)	$	(697)

(1) All amounts are after tax.  Amounts in parentheses indicate debits to accumulated other comprehensive income.

(2) Tax effects are not significant.

(3) For the three months ended September 30, 2016, tax effects are not significant.  For the nine months ended September 30, 2016, amounts are net of total tax expense of $19 million.  For the three and nine months ended September 30, 2015, tax effects are not significant.

In the second quarter of 2016, a $260 million cumulative unamortized actuarial loss, net of tax of $19 million, was released as a result of the realignment of Dow Corning and included in the gain on realignment of equity investment.

In the second quarter of 2016, a $2 million cumulative unamortized actuarial loss was released as a result of the contribution of our investment in PCE to the PCC litigation trust and included in selling, general and administrative expenses.

16.      Share-based Compensation

Stock Compensation Plans

The Company measures and recognizes compensation cost for all share-based payment awards made to employees and directors based on estimated fair values.  Fair values for stock options were estimated using a multiple-point Black-Scholes valuation model.  Share-based compensation cost was approximately $10 million and $11 million for the three months ended September 30, 2016 and 2015, respectively, and approximately $33 million and $36 million for the nine months ended September 30, 2016 and 2015, respectively.  Amounts for all periods presented included compensation expense for employee stock options and time-based restricted stock and restricted stock units.

© 2016 Corning Incorporated. All Rights Reserved.

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Stock Options

Corning’s stock option plans provide non-qualified and incentive stock options to purchase authorized but unissued shares, or treasury shares, at the market price on the grant date and generally become exercisable in installments from one to five years from the grant date.  The maximum term of non-qualified and incentive stock options is 10 years from the grant date.

The following table summarizes information concerning stock options outstanding including the related transactions under the stock option plans for the nine months ended September 30, 2016:

	Number of Shares (in thousands)	Weighted- Average Exercise Price	Weighted- Average Remaining Contractual Term in Years	Aggregate Intrinsic Value (in thousands)
Options Outstanding as of December 31, 2015	42,738	$19.40
Granted	1,669	19.98
Exercised	(5,838)	15.63
Forfeited and Expired	(4,317)	26.02
Options Outstanding as of September 30, 2016	34,252	19.24	3.96	$164,226
Options Expected to Vest as of September 30, 2016	34,208	19.23	3.95	164,091
Options Exercisable as of September 30, 2016	29,475	18.99	3.21	150,477

The aggregate intrinsic value (market value of stock less option exercise price) in the preceding table represents the total pretax intrinsic value, based on the Company’s closing stock price on September 30, 2016, which would have been received by the option holders had all option holders exercised their “in-the-money” options as of that date.

As of September 30, 2016, there was approximately $7 million of unrecognized compensation cost related to stock options granted under the plans.  The cost is expected to be recognized over a weighted-average period of 1.8 years.  Compensation cost related to stock options was approximately $2 million for the three months ended September 30, 2016 and 2015, respectively, and approximately $10 million and $13 million for the nine months ended September 30, 2016 and 2015, respectively.

Proceeds received from the exercise of stock options were $86 million and $99 million for the nine months ended September 30, 2016 and 2015, respectively.  Proceeds received from the exercise of stock options were included in financing activities on the Company’s Consolidated Statements of Cash Flows.  The total intrinsic value of options exercised for the nine months ended September 30, 2016 and 2015 was approximately $36 million and $46 million, respectively.  The income tax benefit realized from share-based compensation was not significant for the three and nine months ended September 30, 2016 and 2015, respectively.  Refer to Note 5 (Income Taxes) to the Consolidated Financial Statements.

© 2016 Corning Incorporated. All Rights Reserved.

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The following inputs were used for the valuation of option grants under our stock option plans:

	Three months ended September 30,		Nine months ended September 30,
	2016	2015	2016			2015
Expected volatility	38.6%	44.2%	38.6	-	43.1%	44.2	-	44.9%
Weighted-average volatility	38.6%	44.2%	38.6	-	43.1%	44.2	-	44.9%
Expected dividends	2.34%	2.67%	2.34	-	2.94%	1.92	-	2.67%
Risk-free rate	1.4%	2.0%	1.4	-	1.6%	1.9	-	2.0%
Average risk-free rate	1.4%	2.0%	1.4	-	1.6%	1.9	-	2.0%
Expected term (in years)	7.4	7.2	7.4	-	7.4	7.2	-	7.2
Pre-vesting departure rate	0.6%	0.6%	0.6	-	0.6%	0.6	-	0.6%

Expected volatility is based on a blended approach defined as the weighted average of the short-term implied volatility, the most recent volatility for the period equal to the expected term, and the most recent 15-year historical volatility.  The expected term assumption is the period of time the options are expected to be outstanding, and is calculated using a combination of historical exercise experience adjusted to reflect the current vesting period of options being valued, and partial life cycles of outstanding options.  The risk-free rate assumption is the implied rate for a zero-coupon U.S. Treasury bond with a term equal to the option’s expected term.

Incentive Stock Plans

The Corning Incentive Stock Plan permits restricted stock and restricted stock unit grants, either determined by specific performance goals or issued directly, in most instances, subject to the possibility of forfeiture and without cash consideration.  Restricted stock and restricted stock units under the Incentive Stock Plan are granted at the closing market price on the grant date, contingently vest over a period of generally one to ten years, and generally have contractual lives of one to ten years.  The fair value of each restricted stock grant or restricted stock unit awarded under the Incentive Stock Plan is based on the grant date closing price of the Company’s stock.

Time-Based Restricted Stock and Restricted Stock Units:

Time-based restricted stock and restricted stock units are issued by the Company on a discretionary basis, and are payable in shares of the Company’s common stock upon vesting.  The fair value is based on the closing market price of the Company’s stock on the grant date.  Compensation cost is recognized over the requisite vesting period and adjusted for actual forfeitures before vesting.

The following table represents a summary of the status of the Company’s non-vested time-based restricted stock and restricted stock units as of December 31, 2015, and changes which occurred during the nine months ended September 30, 2016:

	Shares (000’s)	Weighted Average Grant-Date Fair Value
Non-vested shares and share units at December 31, 2015	5,242	$	17.91
Granted	1,415		20.57
Vested	(1,802)		14.48
Forfeited	(75)		20.78
Non-vested shares and share units at September 30, 2016	4,780	$	19.95

© 2016 Corning Incorporated. All Rights Reserved.

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As of September 30, 2016, there was approximately $31 million of unrecognized compensation cost related to non-vested time-based restricted stock and restricted stock units compensation arrangements granted under the Plan.  The cost is expected to be recognized over a weighted-average period of 1.9 years.  Compensation cost related to time-based restricted stock and restricted stock units was approximately $8 million and $9 million for the three months ended September 30, 2016 and 2015, respectively, and approximately $23 million for the nine months ended September 30, 2016 and 2015, respectively.

17.      Reportable Segments

Our reportable segments are as follows:

·   Display Technologies – manufactures glass substrates primarily for flat panel liquid crystal displays.

·   Optical Communications – manufactures carrier and enterprise network components for the telecommunications industry.

·   Environmental Technologies – manufactures ceramic substrates and filters for automotive and diesel emission control applications.

·   Specialty Materials – manufactures products that provide more than 150 material formulations for glass, glass ceramics and fluoride crystals to meet demand for unique customer needs.

·   Life Sciences – manufactures glass and plastic labware, equipment, media and reagents enabling workflow solutions for scientific applications.

All other segments that do not meet the quantitative threshold for separate reporting have been grouped as “All Other.”  This group is primarily comprised of the results of Corning’s Pharmaceutical Technologies business, which consists of a pharmaceutical glass business and a glass tubing business used in the pharmaceutical packaging industry.  This segment also includes Corning Precision Materials’ non-LCD business and new product lines and development projects, as well as certain corporate investments such as Eurokera and Keraglass equity affiliates.

We prepared the financial results for our reportable segments on a basis that is consistent with the manner in which we internally disaggregate financial information to assist in making internal operating decisions.  We included the earnings of equity affiliates that are closely associated with our reportable segments in the respective segment’s net income.  We have allocated certain common expenses among reportable segments differently than we would for stand-alone financial information.  Segment net income may not be consistent with measures used by other companies.  The accounting policies of our reportable segments are the same as those applied in the consolidated financial statements.

© 2016 Corning Incorporated. All Rights Reserved.

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Reportable Segments (in millions)

		Display Technologies		Optical Communications		Environmental Technologies		Specialty Materials		Life Sciences		All Other		Total
Three months ended   September 30, 2016
	Net sales	$	902	$	795	$	264	$	295	$	214	$	37	$	2,507
	Depreciation (1)	$	152	$	41	$	32	$	26	$	14	$	12	$	277
	Amortization of purchased intangibles			$	10					$	5	$	2	$	17
	Research, development and engineering expenses (2)	$	14	$	37	$	24	$	31	$	6	$	47	$	159
	Equity in earnings of affiliated companies											$	(3)	$	(3)
	Income tax (provision) benefit	$	(98)	$	(49)	$	(17)	$	(21)	$	(8)	$	21	$	(172)
	Net income (loss) (3)	$	279	$	78	$	35	$	42	$	16	$	(47)	$	403

		Display Technologies		Optical Communications		Environmental Technologies		Specialty Materials		Life Sciences		All Other		Total
Three months ended   September 30, 2015
	Net sales	$	757	$	747	$	257	$	288	$	211	$	12	$	2,272
	Depreciation (1)	$	147	$	41	$	32	$	29	$	15	$	9	$	273
	Amortization of purchased intangibles			$	7					$	5			$	12
	Research, development and engineering expenses (2)	$	28	$	33	$	21	$	27	$	6	$	34	$	149
	Equity in earnings of affiliated companies	$	(3)									$	4	$	1
	Income tax (provision) benefit	$	(119)	$	(34)	$	(19)	$	(23)	$	(9)	$	19	$	(185)
	Net income (loss) (3)	$	255	$	70	$	38	$	46	$	18	$	(38)	$	389

© 2016 Corning Incorporated. All Rights Reserved.

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		Display Technologies		Optical Communications		Environmental Technologies		Specialty Materials		Life Sciences		All Other		Total
Nine months ended   September 30, 2016
	Net sales	$	2,408	$	2,186	$	787	$	788	$	633	$	112	$	6,914
	Depreciation (1)	$	452	$	125	$	97	$	81	$	42	$	34	$	831
	Amortization of purchased intangibles			$	25					$	15	$	6	$	46
	Research, development and engineering expenses (2)	$	49	$	110	$	75	$	96	$	18	$	139	$	487
	Restructuring, impairment and other charges	$	4	$	6	$	5	$	12	$	3	$	40	$	70
	Equity in earnings of affiliated companies											$	(8)	$	(8)
	Income tax (provision) benefit	$	(277)	$	(99)	$	(52)	$	(52)	$	(22)	$	87	$	(415)
	Net income (loss) (3)	$	692	$	172	$	106	$	106	$	45	$	(187)	$	934

		Display Technologies		Optical Communications		Environmental Technologies		Specialty Materials		Life Sciences		All Other		Total
Nine months ended   September 30, 2015
	Net sales	$	2,354	$	2,244	$	799	$	832	$	619	$	32	$	6,880
	Depreciation (1)	$	455	$	122	$	93	$	82	$	45	$	29	$	826
	Amortization of purchased intangibles			$	24					$	15			$	39
	Research, development and engineering expenses (2)	$	78	$	101	$	67	$	87	$	17	$	123	$	473
	Equity in earnings of affiliated companies	$	(8)									$	12	$	4
	Income tax (provision) benefit	$	(387)	$	(100)	$	(64)	$	(66)	$	(26)	$	63	$	(580)
	Net income (loss) (3)	$	852	$	204	$	132	$	128	$	52	$	(131)	$	1,237

(1) Depreciation expense for Corning’s reportable segments includes an allocation of depreciation of corporate property not specifically identifiable to a segment.

(2) Research, development and engineering expenses include direct project spending that is identifiable to a segment.

(3) Many of Corning’s administrative and staff functions are performed on a centralized basis.  Where practicable, Corning charges these expenses to segments based upon the extent to which each business uses a centralized function.  Other staff functions, such as corporate finance, human resources and legal, are allocated to segments, primarily as a percentage of sales.  Expenses that are not allocated to the segments are included in the reconciliation of reportable net segment net income to consolidated net income below.

© 2016 Corning Incorporated. All Rights Reserved.

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A reconciliation of reportable segment net income to consolidated net income follows (in millions):

	Three months ended September 30,				Nine months ended September 30,
	2016		2015		2016		2015
Net income of reportable segments	$	450	$	427	$	1,121	$	1,368
Net loss of All Other		(47)		(38)		(187)		(131)
Unallocated amounts:
Net financing costs (1)		(26)		(31)		(84)		(80)
Stock-based compensation expense		(10)		(11)		(33)		(36)
Exploratory research		(27)		(32)		(82)		(86)
Corporate contributions		(15)		(13)		(38)		(37)
Gain on realignment of equity investment						2,676
Equity in earnings of affiliated companies, net of impairments (2)		22		38		126		191
Unrealized loss on foreign currency hedges related to translated earnings		(239)		(317)		(2,441)		(447)
Resolution of Department of Justice investigation						(98)
Income tax benefit		199		178		1,253		375
Other corporate items		(23)		11		(90)		(2)
Net income	$	284	$	212	$	2,123	$	1,115

(1) Net financing costs include interest income, interest expense, and interest costs and investment gains and losses associated with benefit plans.

(2) Through May 31, 2016, the date of the strategic realignment of our equity interest in Dow Corning, this amount primarily represents the equity earnings of Dow Corning.

© 2016 Corning Incorporated. All Rights Reserved.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

ORGANIZATION OF INFORMATION

Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) provides a historical and prospective narrative on the Company’s financial condition and results of operations.  This interim MD&A should be read in conjunction with the MD&A in our 2015 Form 10-K.  The various sections of this MD&A contain a number of forward-looking statements that involve a number of risks and uncertainties.  Words such as “anticipates,” “expects,” “intends,” “plans,” “goals,” “believes,” “seeks,” “estimates,” “continues,” “may,” “will,” “should,” and variations of such words and similar expressions are intended to identify such forward-looking statements.  In addition, any statements that refer to projections of our future financial performance, our anticipated growth and trends in our businesses, uncertain events or assumptions, and other characterizations of future events or circumstances are forward-looking statements.  Such statements are based on our current expectations and could be affected by the uncertainties and risk factors described throughout this filing and particularly in “Risk Factors” in Part I, Item 1A of our 2015 Form 10-K, and as may be updated in our Forms 10-Q.  Our actual results may differ materially, and these forward-looking statements do not reflect the potential impact of any divestitures, mergers, acquisitions, or other business combinations that had not been completed as of September 30, 2016.

Our MD&A includes the following sections:

·   Overview

·   Results of Operations

·   Core Performance Measures

·   Reportable Segments

·   Capital Resources and Liquidity

·   Critical Accounting Estimates

·   New Accounting Standards

·   Environment

·   Forward-Looking Statements

OVERVIEW

Strategy and Capital Allocation Framework

In October 2015, Corning announced a new strategy and capital allocation framework that reflects the Company’s financial and operational strengths, as well as its ongoing commitment to increasing shareholder value.

Our probability of success increases as we invest in our world-class capabilities.  Over the next four years, Corning will concentrate approximately 80% of its research, development and engineering investment and capital spending on a cohesive set of three core technologies, four manufacturing and engineering platforms, and five market-access platforms.  This strategy will allow us to quickly apply our talents and repurpose our assets as needed.

Our financial strength also allows us to increase our return to shareholders.  Through 2019, we expect to generate and deploy over $26 billion and return greater than $12.5 billion to shareholders through share repurchases and dividends.  We intend to increase our dividend per common share by at least 10% annually through 2019.

© 2016 Corning Incorporated. All Rights Reserved.

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Investing in our Future

Corning is one of the world’s leading innovators in materials science.  For more than 160 years, Corning has applied its unparalleled expertise in specialty glass, ceramics, and optical physics to develop products that have created new industries and transformed people’s lives.  In the third quarter and first three quarters of 2016, our spending on research, development and engineering was $187 million and $569 million, respectively, consistent with the same periods in 2015.  We continue to maintain our innovation strategy focusing on growing our existing businesses, developing opportunities adjacent or closely related to our existing technical and manufacturing capabilities, and investing in long-range opportunities in each of our market segments.  We continue to make investments aimed at developing new products, including glass substrates for high-performance displays and LCD applications, precision glass for advanced displays, emission control products for cars, trucks and off-road vehicles, products that accelerate drug discovery and manufacturing and the optical fiber, cable and hardware and equipment that enable fiber-to-the-premises, and next generation data centers.  In addition, we are focusing on wireless solutions for diverse venue applications, such as distributed antenna systems.  We have also focused our research, development and engineering spending to support the advancement of new product attributes for our Corning® Gorilla® Glass suite of products, including Gorilla Glass in automotive and architectural markets.  We will continue to focus on adjacent glass opportunities which leverage existing materials or manufacturing processes, including Corning® Willow™ Glass, our ultra-slim flexible glass substrate for use in next-generation consumer electronic and architectural applications. 

Summary of results for the three and nine months ending September 30, 2016

Net sales in the third quarter and first three quarters of 2016 were $2.5 billion and $6.9 billion, respectively, compared to $2.3 billion and $6.9 billion in the same periods in 2015.  Net sales increased in all of our segments in the third quarter of 2016, led by the Display Technologies and Optical Communications segments, up $145 million and $48 million, respectively.  The increase in sales in the first three quarters of 2016 was driven by the Display Technologies segment and the Corning Pharmaceutical Technologies business, which increased by $54 million and $80 million, respectively.  Lower sales in the Optical Communications segment due to production issues related to the implementation of new manufacturing software, which limited our ability to fulfill customer orders in the first half of 2016, partially offset the increase in these segments.

In the third quarter of 2016, we generated net income of $284 million or $0.26 per share, compared to net income of $212 million or $0.15 per share for the same period in 2015.  The increase in net income was driven by the following items (amounts presented after-tax):

·   The decrease in unrealized losses from our foreign currency hedges related to translated earnings in the amount of $50 million;

·   An increase in net income of $24 million in the Display Technologies, driven by an increase in volume in the low-teens in percentage terms, the positive impact of the change in the contingent consideration fair value adjustment in the amount of $51 million and improvements in manufacturing efficiency, offset somewhat by LCD glass price declines slightly above 10%; and

·   An increase in net income of $8 million in the Optical Communications segment, driven by an increase in fiber-to-the-home products volume, favorable product mix and improvements in manufacturing efficiency.

Partially offsetting these events were the following items:

·   A decrease of $20 million in equity earnings as a result of our strategic realignment of our ownership interest in Dow Corning; and

·   Pension mark-to-market adjustments of $17 million resulting from small settlements in several of our benefit plans.

© 2016 Corning Incorporated. All Rights Reserved.

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The translation impact of fluctuations in foreign currency exchange rates positively affected Corning’s consolidated net income in the three months ended September 30, 2016 in the amount of $83 million when compared to the same period in 2015, largely due to the strengthening of the Japanese yen.  This impact was offset by a decrease of $105 million in the realized gain from our foreign currency translation hedges.

In the first three quarters of 2016, we generated net income of $2,123 million or $1.81 per share, compared to net income of $1,115 million or $0.82 per share for the same period in 2015.  The increase in net income in the first nine months of 2016 was driven by the following items (amounts presented after tax):

·   A $2.7 billion non-taxable gain and $105 million positive tax adjustment on the strategic realignment of our ownership interest in Dow Corning completed on May 31, 2016; and

·   The gain of $25 million on the contribution of our equity interests in PCC and PCE as partial settlement of the asbestos litigation.

Partially offsetting these events were the following items:

·   The increase in unrealized losses from our foreign currency translation hedges in the amount of $1,257 million;

·   Lower net income in the Display Technologies segment, down $160 million, or 19%, primarily driven by LCD glass price declines slightly higher than 10% and a decrease of $220 million in net realized gains from our yen and won-denominated currency hedge contracts, offset somewhat by an increase in volume and the positive impact on operations from the strengthening of the Japanese yen versus the U.S. dollar exchange rate;

·   A decrease in net income of $32 million, or 16%, in the Optical Communications segment, driven by lower sales primarily due to production issues related to the implementation of new manufacturing software, which limited our ability to fulfill customer orders in the first half of 2016; and

·   The resolution of an investigation by the U.S. Department of Justice and related costs in the total amount of $86 million.

The translation impact of fluctuations in foreign currency exchange rates positively affected Corning’s consolidated net income in the nine months ended September 30, 2016 in the amount of $171 million when compared to the same period in 2015, largely due to the strengthening of the Japanese yen versus the U.S. dollar.  This impact was offset by a decrease of $215 million in the realized gain from our foreign currency translation hedges.

2016 Corporate Outlook

Corning expects its Display Technologies segment to experience continued moderate sequential LCD glass price declines in the fourth quarter.  For the full year we expect the LCD glass market and our LCD glass demand to grow in the mid-single digit percentage year over year.  We anticipate that sales in the Optical Communications segment will grow by a high-single digit percentage in the fourth quarter driven by strong fiber-to-the-home demand, resulting in low-single digits growth for the full-year.  In the Environmental Technologies segment, we expect fourth quarter sales to be down low-single digits versus the fourth quarter last year driven by continued weakness in the heavy-duty truck markets, resulting in sales being down slightly for the full year.  In the Specialty Materials segment we expect high-single digit growth year-over-year in the fourth quarter, resulting in sales being down slightly for the full year.  We will continue to execute our strategy and capital allocation framework begun in the fourth quarter of 2015, under which we plan to grow and sustain our leadership position in our markets and return more than $12.5 billion to shareholders through 2019.

© 2016 Corning Incorporated. All Rights Reserved.

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RESULTS OF OPERATIONS

Selected highlights for the third quarter follow (dollars in millions):

	Three months ended September 30,				% change	Nine months ended September 30,				% change
	2016		2015		16 vs. 15	2016		2015		16 vs. 15
Net sales	$	2,507	$	2,272	10%	$	6,914	$	6,880	*
Gross margin	$	1,041	$	892	17%	$	2,756	$	2,796	(1%)
(gross margin %)		42%		39%			40%		41%
Selling, general and administrative expenses	$	302	$	307	(2%)	$	1,104	$	960	15%
(as a % of net sales)		12%		14%			16%		14%
Research, development and engineering expenses	$	187	$	181	3%	$	569	$	561	1%
(as a % of net sales)		7%		8%			8%		8%
Equity in earnings of affiliated companies	$	19	$	39	(51%)	$	119	$	195	(39%)
(as a % of net sales)		1%		2%			2%		3%
Translated earnings contract (loss) gain, net	$	(237)	$	(149)	59%	$	(2,295)	$	42	*
(as a % of net sales)		*		*			*		1%
Loss (gain) on realignment of equity investment						$	2,676			*
(as a % of net sales)							39%
Income before income taxes	$	257	$	218	18%	$	1,288	$	1,317	(2%)
(as a % of net sales)		10%		10%			19%		19%
Benefit (provision) for income taxes	$	27	$	(6)	(550%)	$	835	$	(202)	(513%)
(as a % of net sales)		1%		*			12%		*
Net income attributable to Corning Incorporated	$	284	$	212	34%	$	2,123	$	1,115	90%
(as a % of net sales)		11%		9%			31%		16%

* Percent change not meaningful.

© 2016 Corning Incorporated. All Rights Reserved.

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Net Sales

The following table presents net sales by reportable segment (in millions):

	Three months ended September 30,				% Change	Nine months ended September 30,				% Change
	2016		2015		16 vs. 15	2016		2015		16 vs. 15
Display Technologies	$	902	$	757	19%	$	2,408	$	2,354	2%
Optical Communications		795		747	6%		2,186		2,244	(3)%
Environmental Technologies		264		257	3%		787		799	(2)%
Specialty Materials		295		288	2%		788		832	(5)%
Life Sciences		214		211	1%		633		619	2%
All Other		37		12	208%		112		32	250%
Total net sales	$	2,507	$	2,272	10%	$	6,914	$	6,880	-

For the three months ended September 30, 2016, net sales increased by $235 million, or 10%, when compared to the same period in 2015.  The primary sales drivers by segment were as follows:

·   An increase of $145 million in the Display Technologies segment, driven by the positive impact from the strengthening of the Japanese yen in the amount of $138 million and an increase in volume in the low-teens in percentage terms, partially offset by LCD glass price declines slightly higher than 10%;

·   An increase of $48 million in the Optical Communications segment primarily due to higher sales of fiber-to-the-home products in North America;

·   An increase of $7 million in the Environmental Technologies segment, driven by record quarterly sales of light-duty substrate products due to market strength in North America, Europe and China;

·   An increase of $7 million in the Specialty Materials segment;

·   An increase of $3 million in the Life Sciences segment; and

·   An increase of $25 million in the All Other segment, driven by the acquisition of a glass tubing business and the formation of the Corning Pharmaceutical Technologies business completed in the fourth quarter of 2015.

For the nine months ended September 30, 2016, net sales increased by $34 million when compared to the same period in 2015.  The primary sales drivers by segment were as follows:

·   An increase of $54 million in the Display Technologies segment, driven by the positive impact from the strengthening of the Japanese yen in the amount of $274 million and a low-single digit percentage volume increase, offset somewhat by LCD glass price declines slightly higher than 10%;

·   A decrease of $58 million in the Optical Communications segment, driven primarily by production issues related to the implementation of new manufacturing software;

·   A decrease of $12 million in the Environmental Technologies segment driven by lower sales of heavy-duty diesel products due to the weakening of the North American truck market, offset partially by an increase in sales of light-duty substrates, driven by strength in the North American and European markets;

·   A decrease of $44 million in the Specialty Materials segment, driven by a decline in volume of Corning Gorilla Glass products;

·   An increase of $14 million in the Life Sciences segment, driven by volume growth in Europe, North America and China; and

·   An increase of $80 million in the All Other segment, driven by the acquisition of a glass tubing business and the formation of the Corning Pharmaceutical Technologies business completed in the fourth quarter of 2015.

In the three and nine months ended September 30, 2016, the translation impact of fluctuations in foreign currency exchange rates, primarily the Japanese yen, positively impacted Corning’s consolidated net sales by $133 million and $246 million, respectively, when compared to the same periods in 2015.

© 2016 Corning Incorporated. All Rights Reserved.

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Cost of Sales

The types of expenses included in the cost of sales line item are: raw materials consumption, including direct and indirect materials; salaries, wages and benefits; depreciation and amortization; production utilities; production-related purchasing; warehousing (including receiving and inspection); repairs and maintenance; inter-location inventory transfer costs; production and warehousing facility property insurance; rent for production facilities; and other production overhead.

Gross Margin

In the three months ended September 30, 2016, gross margin dollars and gross margin as a percentage of net sales increased when compared to the same period last year, up $149 million and 3%, respectively, driven by higher sales, cost reductions and improvements in manufacturing efficiency in the majority of our segments.  The Optical Communications segment experienced the largest increase, driven by an increase in volume and favorable product mix.

In the nine months ended September 30, 2016, gross margin dollars and gross margin as a percentage of net sales decreased when compared to the same period last year, down $40 million and 1%, respectively.  The decrease was primarily driven by LCD glass price declines in the Display Technologies segment and the impact of a power outage that temporarily halted production at our Tainan, Taiwan manufacturing location in the first half of 2016, resulting in asset write-offs and charges for facility repairs.  Additionally, in the first half of 2016, gross margin was negatively impacted by issues with a manufacturing software implementation in the Optical Communications segment which limited our ability to fulfill customer orders.  Lower manufacturing costs in the Specialty Materials segment and the stronger Japanese yen and Korean won versus the U.S. dollar exchange rate partially offset the decline in these periods.

Selling, General and Administrative Expenses

When compared to the third quarter of 2015, selling, general and administrative expenses decreased by $5 million in the three months ended September 30, 2016, driven by the positive impact of the change in the contingent consideration fair value adjustment of $61 million, offset somewhat by an increase of $26 million in the mark-to-market of our defined benefit pension plans resulting from small settlements in several of our benefit plans and $25 million in higher variable compensation and benefit expenses.

When compared to the first three quarters of 2015, selling, general and administrative expenses increased by $144 million in the nine months ended September 30, 2016, driven by the following items:

·   An increase of $58 million in acquisition-related costs primarily related to the realignment of our equity interest in Dow Corning and an acquisition completed in the second quarter of 2016;

·   An increase of $60 million in litigation, regulatory and other legal costs related to the resolution of an investigation by the U.S. Department of Justice and an environmental matter, partially offset by the gain on the contribution of our equity interests in PCC and PCE as partial settlement of the asbestos litigation;

·   An increase of $52 million in the mark-to-market of our defined benefit pension plans; and

·   Higher operating expenses in the Optical Communications, Environmental Technologies and Specialty Materials segments.

The positive impact of the change in the contingent consideration fair value adjustment of $40 million and a decrease of $25 million in post-combination expenses, which were higher in 2015 due to the completion of four acquisitions, partially offset the increases detailed above.

The types of expenses included in the selling, general and administrative expenses line item are: salaries, wages and benefits; stock-based compensation expense; travel; sales commissions; professional fees; and depreciation and amortization, utilities and rent for administrative facilities.

© 2016 Corning Incorporated. All Rights Reserved.

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Research, Development and Engineering Expenses

For the three and nine months ended September 30, 2016, research, development and engineering expenses and as a percentage of sales were relatively consistent with the same periods last year.

Equity in Earnings of Affiliated Companies

The following provides a summary of equity in earnings of affiliated companies (in millions):

	Three months ended September 30,				Nine months ended September 30,
	2016		2015		2016		2015
Dow Corning Corporation (1)			$	36	$	82	$	185
Hemlock Semiconductor Group (2)	$	22				44
All other		(3)		3		(7)		10
Total equity earnings	$	19	$	39	$	119	$	195

(1)   Results include equity earnings for Dow Corning, which includes the silicones business and Hemlock Semiconductor business, through May 31, 2016, the date of the realignment of our ownership interest in Dow Corning.

(2)   Results include equity earnings for Hemlock Semiconductor Group beginning on June 1, 2016.

On May 31, 2016, Corning completed the strategic realignment of its equity investment in Dow Corning Corporation (“Dow Corning”) pursuant to the Transaction Agreement announced on December 10, 2015.  Under the terms of the Transaction Agreement, Corning exchanged with Dow Corning its 50% stock interest in Dow Corning for 100% of the stock of a newly formed entity, which holds an equity interest in Hemlock Semiconductor Group and approximately $4.8 billion in cash.

The equity in earnings line on our income statement for the nine months ending September 30, 2016 reflects both the equity earnings from the silicones and polysilicones (Hemlock Semiconductor) businesses of Dow Corning from January 1, 2016 through May 31, 2016, the closing date of the Transaction Agreement, and four months of equity earnings from Hemlock Semiconductor Group.  Prior to the realignment of Dow Corning, equity earnings from the Hemlock Semiconductor business were reported on the equity in earnings line in Corning’s income statement, net of Dow Corning’s 35% U.S. tax.  Additionally, Corning reported its tax on equity earnings from Dow Corning on the tax provision line on its income statement at a U.S. tax provision rate of 7%.  As part of the realignment, Hemlock Semiconductor Group was converted to a partnership.  Each of the partners is responsible for the taxes on their portion of equity earnings.  Therefore, post-realignment, Hemlock Semiconductor Group’s equity earnings is reported before tax on the equity in earnings line and Corning’s tax is reported on the tax provision line.

Refer to Note 9 (Investments) to the consolidated financial statements for additional information.

© 2016 Corning Incorporated. All Rights Reserved.

35

Translated earnings contract (loss) gain, net

Included in the line item Translated earnings contract (loss) gain, net, is the impact of foreign currency hedges which hedge our translation exposure arising from movements in the Japanese yen, South Korean won and euro against the U.S. dollar and its impact on our net earnings.  The following table provides detailed information on the impact of our translated earnings contract losses and gains:

	Three months ended September 30, 2016				Three months ended September 30, 2015				Change 2016 vs. 2015
(in millions)	Income before income taxes		Net income		Income before income taxes		Net income		Income before income taxes		Net income
Hedges related to translated earnings:
Realized gains (losses), net	$	2	$	1	$	168	$	106	$	(166)	$	(105)
Unrealized (losses) gains, net		(239)		(150)		(317)		(200)		78		50
Total translated earnings contract loss, net	$	(237)	$	(149)	$	(149)	$	(94)	$	(88)	$	(55)

	Nine months ended September 30, 2016				Nine months ended September 30, 2015				Change 2016 vs. 2015
(in millions)	Income before income taxes		Net income		Income before income taxes		Net income		Income before income taxes		Net income
Hedges related to translated earnings:
Realized gains (losses), net	$	146	$	92	$	489	$	307	$	(343)	$	(215)
Unrealized losses, net		(2,441)		(1,539)		(447)		(282)		(1,994)		(1,257)
Total translated earnings contract (loss) gain, net	$	(2,295)	$	(1,447)	$	42	$	25	$	(2,337)	$	(1,472)

The gross notional amount outstanding for our foreign currency hedges related to translated earnings is $17.6 billion, and is comprised of the following:  1) Japanese yen-denominated hedges - $16 billion; 2) South Korean won-denominated hedges - $1.3 billion; and 3) euro-denominated hedges - $0.3 billion.

Income Before Income Taxes

The impact of fluctuations in foreign exchange rates positively impacted Corning’s consolidated income before income taxes in the three and nine months ended September 30, 2016 when compared to the same periods in 2015 in the amounts of $98 million and $215 million, respectively.

Benefit (Provision) for Income Taxes

Our benefit (provision) for income taxes and the related effective income tax rates were as follows (in millions):

	Three months ended September 30,				Nine months ended September 30,
	2016		2015		2016		2015
Benefit (provision) for income taxes	$	27	$	(6)	$	835	$	(202)
Effective tax rate		(10.5%)		2.8%		(64.8%)		15.3%

© 2016 Corning Incorporated. All Rights Reserved.

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For the three months ended September 30, 2016, the effective income tax rate differed from the U.S. statutory rate of 35% primarily due to the following benefits:

·   Rate differences on income (loss) of consolidated foreign companies, including the benefit of excess foreign tax credits resulting from the inclusion of foreign earnings in U.S. income.

For the nine months ended September 30, 2016, the effective income tax rate differed from the U.S. statutory rate of 35% primarily due to the following benefits:

·   Rate differences on income (loss) of consolidated foreign companies, including the benefit of excess foreign tax credits resulting from the inclusion of foreign earnings in U.S. income;

·   The impact of equity in earnings of nonconsolidated affiliates reported in the financials, net of tax; and

·   The tax-free nature of the realignment of our equity interest in Dow Corning during the period, as well as the release of the deferred tax liability related to Corning’s tax on Dow Corning’s undistributed earnings as of the date of the transaction.

For the three and nine months ended September 30, 2015, the effective income tax rate differed from the U.S. statutory rate of 35% primarily due to the following benefits:

·   Rate differences on income (loss) of consolidated foreign companies, including the benefit of excess foreign tax credits resulting from the inclusion of high-taxed foreign earnings in U.S. income; and

·   The impact of equity in earnings of nonconsolidated affiliates reported in the financials, net of tax.

Refer to Note 5 (Income Taxes) to the consolidated financial statements for additional information.

Net Income Attributable to Corning Incorporated

As a result of the above, our net income and per share data is as follows (in millions, except per share amounts):

	Three months ended September 30,				Nine months ended September 30,
	2016		2015		2016		2015
Net income attributable to Corning Incorporated	$	284	$	212	$	2,123	$	1,115
Net income attributable to Corning Incorporated used in basic earnings per common share calculation (1)	$	260	$	188	$	2,050	$	1,042
Net income attributable to Corning Incorporated used in diluted earnings per common share calculation (1)	$	284	$	188	$	2,123	$	1,115
Basic earnings per common share	$	0.27	$	0.16	$	1.96	$	0.84
Diluted earnings per common share	$	0.26	$	0.15	$	1.81	$	0.82
Weighted-average common shares outstanding - basic		978		1,210		1,046		1,241
Weighted-average common shares outstanding - diluted		1,102		1,218		1,170		1,366

(1) Refer to Note 6 (Earnings per Common Share) to the consolidated financial statements for additional information.

© 2016 Corning Incorporated. All Rights Reserved.

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Comprehensive Income

For the three and nine months ended September 30, 2016, comprehensive income increased by $535 million and $2,600 million, respectively, when compared to the same periods in 2015, driven by the following items:

·   An increase in net income attributable to Corning Incorporated of $72 million and $1,008 million, respectively;

·   The positive impact due to the change in foreign currency translation gains and losses of $426 million and $1,346 million, respectively, largely driven by the strengthening of the Japanese yen; and

·   The change in the amount of unamortized actuarial losses released in the amounts of $11 million and $248 million, respectively.  The significant change in the first three quarters of 2016 was driven by the release of Dow Corning’s unamortized actuarial loss in the amount of $260 million, which was included in the gain on the realignment of our ownership interests in Dow Corning.

Refer to Note 15 (Shareholders’ Equity) to the consolidated financial statements for additional information.

CORE PERFORMANCE MEASURES

In managing the Company and assessing our financial performance, we supplement certain measures provided by our consolidated financial statements with measures adjusted to exclude certain items, to arrive at core performance measures.  We believe reporting core performance measures provides investors greater transparency to the information used by our management team to make financial and operational decisions.  Corning has adopted the use of constant currency reporting for the Japanese yen and South Korean won, and uses an internally derived yen-to-dollar management rate of ¥99 and won-to-dollar management rate of ₩1,100.

Net sales, equity in earnings of affiliated companies and net income are adjusted to exclude the impacts of changes in the Japanese yen and the South Korean won, gains and losses on our foreign currency hedges related to translated earnings, acquisition-related costs, discrete tax items, restructuring and restructuring-related charges, certain litigation-related expenses, pension mark-to-market adjustments and other items which do not reflect on-going operating results of the Company or our equity affiliates.  Management’s discussion and analysis on our reportable segments has also been adjusted for these items, as appropriate.  These measures are not prepared in accordance with Generally Accepted Accounting Principles in the United States (“GAAP”).  We believe investors should consider these non-GAAP measures in evaluating our results as they are more indicative of our core operating performance and how management evaluates our operational results and trends.  These measures are not, and should not be viewed as a substitute for GAAP reporting measures.  With respect to the Company’s outlooks for future periods, it is not able to provide reconciliations for these non-GAAP measures because the Company does not forecast the movement of the Japanese yen and South Korean won against the U.S. dollar, or other items that do not reflect ongoing operations, nor does it forecast items that have not yet occurred or are out of the Company’s control.  As a result, the Company is unable to provide outlook information on a GAAP basis.

See “Use of Non-GAAP Financial Measures” for details on core performance measures.  For a reconciliation of non-GAAP performance measures to their most directly comparable GAAP financial measure, please see “Reconciliation of Non-GAAP Measures” below.

RESULTS OF OPERATIONS – CORE PERFORMANCE MEASURES

Selected highlights from our continuing operations, excluding certain items, follow (in millions):

	Three months ended September 30,				% change	Nine months ended September 30,				% change
	2016		2015		16 vs. 15	2016		2015		16 vs. 15
Core net sales	$	2,548	$	2,451	4%	$	7,159	$	7,398	(3)%
Core equity in earnings of affiliated companies	$	19	$	58	(67)%	$	138	$	182	(24)%
Core earnings	$	466	$	447	4%	$	1,240	$	1,453	(15)%

© 2016 Corning Incorporated. All Rights Reserved.

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Core Net Sales

The following table presents core net sales by reportable segment (in millions):

	Three months ended September 30,				% change	Nine months ended September 30,				% change
	2016		2015		16 vs. 15	2016		2015		16 vs. 15
Display Technologies	$	943	$	936	1%	$	2,652	$	2,871	(8)%
Optical Communications		795		747	6%		2,186		2,244	(3)%
Environmental Technologies		264		257	3%		787		799	(2)%
Specialty Materials		295		288	2%		788		832	(5)%
Life Sciences		214		211	1%		633		619	2%
All Other		37		12	208%		113		33	242%
Total core net sales	$	2,548	$	2,451	4%	$	7,159	$	7,398	(3)%

Core net sales increased by $97 million and decreased by $239 million in the three and nine months ended September 30, 2016, respectively, when compared to the same periods in 2015.  In all segments except Display Technologies, core net sales are consistent with GAAP net sales.  Because a significant portion of revenues in the Display Technologies segment are denominated in Japanese yen, this segment’s net sales are adjusted to remove the impact of translating yen into dollars.

When compared to the third quarter of 2015, core net sales in the Display Technologies segment increased by $7 million, or 1%, in the third quarter of 2016, driven by an increase in volume in the low-teens in percentage terms, offset somewhat by LCD glass price declines slightly higher than 10%.

When compared to the first three quarters of 2015, core net sales in the Display Technologies segment decreased by $219 million, or 8%, in the first three quarters of 2016, driven by LCD glass price declines slightly higher than 10%.

Core Equity in Earnings of Affiliated Companies

The following provides a summary of core equity in earnings of affiliated companies (in millions):

	Three months ended September 30,				Nine months ended September 30,
	2016		2015		2016		2015
Dow Corning Corporation (1)			$	53	$	98	$	167
Hemlock Semiconductor Group (2)	$	22				44
All other		(3)		5		(4)		15
Total core equity earnings	$	19	$	58	$	138	$	182

(1)   Results include equity earnings for Dow Corning, which includes the silicones business and Hemlock Semiconductor business, through May 31, 2016, the date of the realignment of our ownership interest in Dow Corning.

(2)   Results include equity earnings for Hemlock Semiconductor Group beginning on June 1, 2016.

Core Earnings

In the three and nine months ended September 30, 2016, we generated core earnings of $466 million or $0.42 per share and $1,240 million, or $1.06 per share, respectively, compared to $447 million or $0.34 per share and $1,453 million or $1.06 per share, respectively, in the same periods in 2015.  The increase of $19 million in the third quarter of 2016 was primarily due to an increase in core earnings of $27 million in the Optical Communications segment, driven by an increase in fiber-to-the-home products volume, favorable product mix and improvements in manufacturing efficiency.  Display Technologies core earnings also increased, up $13 million, driven by an increase in volume in the low-teens in percentage terms and improvements in manufacturing efficiency, offset somewhat by the LCD glass price declines slightly above 10%.  The decrease of $213 million in the nine months ended September 30, 2016 was driven by lower core earnings in the Display Technologies segment, down $111 million, driven by LCD glass price declines slightly higher than 10%.

© 2016 Corning Incorporated. All Rights Reserved.

39

Included in core earnings for the three and nine months ended September 30, 2016 is net periodic pension expense in the amounts of $13 million and $38 million, respectively, and for the same periods in 2015, $16 million and $48 million, respectively.  Refer to Note 11 (Employee Retirement Plans) to the Consolidated Financial Statements for additional information.

Core Earnings per Common Share

The following table sets forth the computation of core basic and core diluted earnings per common share (in millions, except per share amounts):

	Three months ended September 30,				Nine months ended September 30,
	2016		2015		2016		2015
Core earnings attributable to Corning Incorporated	$	466	$	447	$	1,240	$	1,453
Less:  Series A convertible preferred stock dividend		24		24		73		73
Core earnings available to common stockholders - basic		442		423		1,167		1,380
Add:  Series A convertible preferred stock dividend		24		24		73		73
Core earnings available to common stockholders - diluted	$	466	$	447	$	1,240	$	1,453
Weighted-average common shares outstanding - basic		978		1,210		1,046		1,241
Effect of dilutive securities:
Stock options and other dilutive securities		9		8		9		10
Series A convertible preferred stock		115		115		115		115
Weighted-average common shares outstanding - diluted		1,102		1,333		1,170		1,366
Core basic earnings per common share	$	0.45	$	0.35	$	1.12	$	1.11
Core diluted earnings per common share	$	0.42	$	0.34	$	1.06	$	1.06

Reconciliation of Non-GAAP Measures

We utilize certain financial measures and key performance indicators that are not calculated in accordance with GAAP to assess our financial and operating performance.  A non-GAAP financial measure is defined as a numerical measure of a company’s financial performance that (i) excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the comparable measure calculated and presented in accordance with GAAP in the statement of income or statement of cash flows, or (ii) includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the comparable measure as calculated and presented in accordance with GAAP in the statement of income or statement of cash flows.

Core net sales, core equity in earnings of affiliated companies and core earnings are non-GAAP financial measures utilized by our management to analyze financial performance without the impact of items that are driven by general economic conditions and events that do not reflect the underlying fundamentals and trends in the Company’s operations.

© 2016 Corning Incorporated. All Rights Reserved.

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The following tables reconcile our non-GAAP financial measures to their most directly comparable GAAP financial measure (amounts in millions except percentages and per share amounts):

	Three months ended September 30, 2016
	Net sales		Equity earnings		Income before income taxes		Net income		Effective tax rate	Per share
As reported - GAAP	$	2,507	$	19	$	257	$	284	(10.5)%	0.26
Constant-yen (1)		40				47		30		0.03
Constant-won (1)		1				(4)		(3)
Foreign currency hedges related to translated earnings (2)						237		149		0.14
Acquisition-related costs (3)						15		11		0.01
Discrete tax items and other tax-related adjustments (4)								6		0.01
Restructuring, impairment and other charges (6)						11		9		0.01
Impacts from the acquisition of Samsung Corning Precision Materials (8)						(49)		(41)		(0.04)
Pension mark-to-market(10)						26		17		0.02
Taiwan power outage(12)						5		4
Core performance measures	$	2,548	$	19	$	545	$	466	14.5%	0.42

See Part 1, Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations, Results of Operations – Core Performance Measures, Reconciliation of Non-GAAP Measures, “Items which we exclude from GAAP measures to arrive at core performance measures” for the descriptions of the footnoted reconciling items.

© 2016 Corning Incorporated. All Rights Reserved.

41

	Three months ended September 30, 2015
	Net sales		Equity earnings		Income before income taxes		Net income		Effective tax rate	Per share
As reported - GAAP	$	2,272	$	39	$	218	$	212	2.8%	0.15
Constant-yen (1)		178		2		144		111		0.08
Constant-won (1)		1		(1)		(14)		(10)		(0.01)
Foreign currency hedges related to translated earnings (2)						149		94		0.07
Acquisition-related costs (3)						9		5
Discrete tax items and other tax-related adjustments (4)								14		0.01
Litigation, regulatory and other legal matters (5)						(9)		(6)
Restructuring, impairment and other charges (6)						1		1
Equity in earnings of affiliated companies (7)				18		18		16		0.01
Impacts from the acquisition of Samsung Corning Precision Materials (8)						13		10		0.01
Core performance measures	$	2,451	$	58	$	529	$	447	15.5%	0.34

See Part 1, Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations, Results of Operations – Core Performance Measures, Reconciliation of Non-GAAP Measures, “Items which we exclude from GAAP measures to arrive at core performance measures” for the descriptions of the footnoted reconciling items.

© 2016 Corning Incorporated. All Rights Reserved.

42

	Nine months ended September 30, 2016
	Net sales		Equity earnings		Income before income taxes		Net income		Effective tax rate	Per share
As reported – GAAP	$	6,914	$	119	$	1,288	$	2,123	(64.8)%	1.81
Constant-yen (1)		242		4		232		164		0.14
Constant-won (1)		3		(1)		(36)		(26)		(0.02)
Foreign currency hedges related to translated earnings (2)						2,295		1,447		1.24
Acquisition-related costs (3)						109		95		0.08
Discrete tax items and other tax-related adjustments (4)								(83)		(0.07)
Litigation, regulatory and other legal matters (5)						55		70		0.06
Restructuring, impairment and other charges (6)						131		91		0.08
Equity in earnings of affiliated companies (7)				16		16		15		0.01
Impacts from the acquisition of Samsung Corning Precision Materials (8)						(45)		(38)		(0.03)
Pension mark-to-market(10)						60		39		0.03
Gain on realignment of equity investment(11)						(2,676)		(2,676)		(2.29)
Taiwan power outage(12)						25		19		0.02
Core performance measures	$	7,159	$	138	$	1,454	$	1,240	14.7%	1.06

See Part 1, Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations, Results of Operations – Core Performance Measures, Reconciliation of Non-GAAP Measures, “Items which we exclude from GAAP measures to arrive at core performance measures” for the descriptions of the footnoted reconciling items.

© 2016 Corning Incorporated. All Rights Reserved.

43

	Nine months ended September 30, 2015
	Net sales		Equity earnings		Income before income taxes		Net income		Effective tax rate	Per share
As reported	$	6,880	$	195	$	1,317	$	1,115	15.3%	0.82
Constant-yen (1)		517		4		419		313		0.23
Constant-won (1)		1		(1)		(13)		(10)		(0.01)
Foreign currency hedges related to translated earnings (2)						(42)		(25)		(0.02)
Acquisition-related costs (3)						40		25		0.02
Discrete tax items and other tax-related adjustments (4)								25		0.02
Litigation, regulatory and other legal matters (5)						(6)		(4)
Restructuring, impairment and other charges (6)						6		6
Equity in earnings of affiliated companies (7)				(16)		(16)		(16)		(0.01)
Impacts from the acquisition of Samsung Corning Precision Materials (8)						4		3
Post-combination expenses (9)						25		16		0.01
Pension mark-to-market(10)						8		5
Core performance measures	$	7,398	$	182	$	1,742	$	1,453	16.6%	1.06

See Part 1, Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations, Results of Operations – Core Performance Measures, Reconciliation of Non-GAAP Measures, “Items which we exclude from GAAP measures to arrive at core performance measures” for the descriptions of the footnoted reconciling items.

© 2016 Corning Incorporated. All Rights Reserved.

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Items which we exclude from GAAP measures to arrive at core performance measures are as follows:

(1)	Constant-currency adjustments:
	Constant-yen:  Because a significant portion of Display Technologies segment revenues and manufacturing costs are denominated in Japanese yen, management believes it is important to understand the impact on core earnings of translating yen into dollars.  Presenting results on a constant-yen basis mitigates the translation impact of the Japanese yen, and allows management to evaluate performance period over period, analyze underlying trends in our businesses, and establish operational goals and forecasts.  As of January 1, 2015, we used an internally derived management rate of ¥99, which is closely aligned to our current yen portfolio of foreign currency hedges, and have recast all periods presented based on this rate in order to effectively remove the impact of changes in the Japanese yen.
	Constant-won:  Because a significant portion of Corning Precision Materials’ costs are denominated in South Korean won, management believes it is important to understand the impact on core earnings from translating won into dollars.  Presenting results on a constant-won basis mitigates the translation impact of the South Korean won, and allows management to evaluate performance period over period, analyze underlying trends in our businesses, and establish operational goals and forecasts without the variability caused by the fluctuations caused by changes in the rate of this currency.  We use an internally derived management rate of ₩1,100, which is consistent with historical prior period averages of the won.
(2)	Foreign currency hedges related to translated earnings:  We have excluded the impact of the gains and losses of our foreign currency hedges related to translated earnings for each period presented.
(3)	Acquisition-related costs:  These expenses include intangible amortization, inventory valuation adjustments and external acquisition-related deal costs.
(4)	Discrete tax items and other tax-related adjustments:  This represents the removal of discrete adjustments attributable to changes in tax law and other non-operational tax-related adjustments.
(5)	Litigation, regulatory and other legal matters:  Includes amounts related to the Pittsburgh Corning Corporation (PCC) asbestos litigation, adjustments to our estimated liability for environmental-related items and other legal matters.
(6)	Restructuring, impairment and other charges:  This amount includes restructuring, impairment and other charges, including goodwill impairment charges and other expenses and disposal costs not classified as restructuring expense.
(7)	Equity in earnings of affiliated companies:  These adjustments relate to items which do not reflect expected on-going operating results of our affiliated companies, such as restructuring, impairment and other charges and settlements under “take-or-pay” contracts.
(8)	Impacts from the acquisition of Samsung Corning Precision Materials:  Fair value adjustments to the indemnity asset related to contingent consideration and other items related to the acquisition of Samsung Corning Precision Materials.
(9)	Post-combination expenses:  Post-combination expenses incurred as a result of an acquisition in the first quarter of 2015.
(10)	Pension mark-to-market adjustment:  Mark-to-market pension gains and losses, which arise from changes in actuarial assumptions and the difference between actual and expected returns on plan assets and discount rates.
(11)	Gain on realignment of equity investment:  Gain recorded upon the completion of the strategic realignment of our ownership interest in Dow Corning.
(12)	Taiwan power outage:  Impact of the power outage that temporarily halted production at our Tainan, Taiwan manufacturing location in the first half of 2016.  The impact includes asset write-offs and charges for facility repairs, offset somewhat by partial reimbursement through our insurance program.  We expect to receive the remainder of the insurance reimbursement in the fourth quarter of 2016.

© 2016 Corning Incorporated. All Rights Reserved.

45

REPORTABLE SEGMENTS

Our reportable segments are as follows:

·   Display Technologies – manufactures glass substrates primarily for flat panel liquid crystal displays.

·   Optical Communications – manufactures carrier and enterprise network components for the telecommunications industry.

·   Environmental Technologies – manufactures ceramic substrates and filters for automotive and diesel emission control applications.

·   Specialty Materials – manufactures products that provide more than 150 material formulations for glass, glass ceramics and fluoride crystals to meet demand for unique customer needs.

·   Life Sciences – manufactures glass and plastic labware, equipment, media and reagents enabling workflow solutions for scientific applications.

All other segments that do not meet the quantitative threshold for separate reporting have been grouped as “All Other.”  This group is primarily comprised of the results of Corning’s Pharmaceutical Technologies business, which consists of a pharmaceutical glass business and a glass tubing business used in the pharmaceutical packaging industry.  This segment also includes Corning Precision Materials’ non-LCD business and new product lines and development projects, as well as certain corporate investments such as Eurokera and Keraglass equity affiliates.

We prepared the financial results for our reportable segments on a basis that is consistent with the manner in which we internally disaggregate financial information to assist in making internal operating decisions.  We included the earnings of equity affiliates that are closely associated with our reportable segments in the respective segment’s net income.  We have allocated certain common expenses among our reportable segments differently than we would for stand-alone financial information prepared in accordance with GAAP.  Our reportable segments include non-GAAP measures which are not prepared in accordance with GAAP.  We believe investors should consider these non-GAAP measures in evaluating our results as they are more indicative of our core operating performance and how management evaluates our operational results and trends.  These measures are not, and should not be viewed as a substitute for GAAP reporting measures.  For a reconciliation of non-GAAP performance measures to their most directly comparable GAAP financial measure, please see “Reconciliation of Non-GAAP Measures” above.  Segment net income may not be consistent with measures used by other companies.  The accounting policies of our reportable segments are the same as those applied in the consolidated financial statements.

Display Technologies

The following tables provide net sales and net income for the Display Technologies segment and reconcile the non-GAAP financial measures for the Display Technologies segment with our financial statements presented in accordance with GAAP (in millions):

	Three months ended September 30, 2016				Nine months ended September 30, 2016
(in millions)	Net sales		Net income		Net sales		Net income
As reported - GAAP	$	902	$	279	$	2,408	$	692
Constant-yen (1)		40		35		242		171
Constant-won (1)		1		(3)		2		(24)
Foreign currency hedges related to translated earnings (2)				(2)				(93)
Restructuring, impairment and other charges (6)								13
Impacts from the acquisition of Samsung Corning Precision Materials (8)				(41)				(38)
Taiwan power outage (12)				2				9
Core performance	$	943	$	270	$	2,652	$	730

© 2016 Corning Incorporated. All Rights Reserved.

46

	Three months ended September 30, 2015				Nine months ended September 30, 2015
(in millions)	Net sales		Net income		Net sales		Net income
As reported - GAAP	$	757	$	255	$	2,354	$	852
Constant-yen (1)		178		107		516		311
Constant won (1)		1		(9)		1		(9)
Foreign currency hedges related to translated earnings (2)				(106)				(313)
Impacts from the acquisition of Samsung Corning Precision Materials (8)				10
Core performance	$	936	$	257	$	2,871	$	841

See Part 1, Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations, Results of Operations – Core Performance Measures, Reconciliation of Non-GAAP Measures, “Items which we exclude from GAAP measures to arrive at core performance measures” for the descriptions of the footnoted reconciling items.

As Reported

Net sales in the Display Technologies segment increased by $145 million, or 19%, in the third quarter of 2016 when compared to the third quarter of 2015.  The increase was driven by the positive impact from the strengthening of the Japanese yen in the amount of $138 million and an increase in volume in the low-teens in percentage terms, partially offset by LCD glass price declines slightly higher than 10%.  Net income increased by $24 million, or 9%, in the third quarter of 2016, when compared to the third quarter of 2015.  The increase was driven by the positive impact of the strengthening of the yen in the amount of $72 million, an increase in volume in the low-teens in percentage terms, the positive impact of the change in the contingent consideration fair value adjustment in the amount of $51 million and improvements in manufacturing efficiency, offset somewhat by the LCD glass price declines described above and a decrease of $104 million in the realized gain from our yen and won-denominated currency hedges.

Net sales in the Display Technologies segment increased by $54 million, or 2%, in the first nine months of 2016 when compared to the same period in 2015, driven by the positive impact from the strengthening of the Japanese yen in the amount of $274 million and a low-single digit percentage volume increase, offset somewhat by LCD glass price declines slightly higher than 10%.  Net income decreased by $160 million, or 19%, in the nine months ended September 30, 2016, when compared to the same period in 2015.  The decrease was driven primarily by the LCD glass price declines described above and a decrease of $220 million in the realized gain from our yen and won-denominated currency hedges, offset partially by the impact of the strengthening of the yen of $140 million, an increase in volume in the low-single digit percentage, the positive impact of the change in the contingent consideration fair value adjustment in the amount of $38 million, improvements in manufacturing efficiency and a decline in operating expenses.

Core Performance

Core net sales increased in the third quarter of 2016 by $7 million, or 1%, when compared to the third quarter of 2015, driven by an increase in volume in the low-teens in percentage terms, partially offset by LCD glass price declines slightly higher than 10%.  Core earnings also increased in the third quarter of 2016, up $13 million, or 5%, driven by the increase in volume described above, improvements in manufacturing efficiency and a decline in operating expenses.  LCD glass price declines slightly higher than 10% partially offset the increase.

Core net sales decreased by $219 million, or 8%, in the first three quarters of 2016, when compared to the third quarter of 2015, driven by LCD glass price declines slightly higher than 10%, partially offset by a low-single digit percentage volume increase.  Core earnings also decreased in this period, down $111 million, or 13%, driven by LCD glass price declines slightly higher than 10%, partially offset by a low-single digit percentage volume increase, improvements in manufacturing efficiency and a decline in operating expenses.

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Outlook:

The company expects panel maker utilization to remain high and for LCD glass supply to remain tight in the fourth quarter.  Sequentially, fourth-quarter volume is expected to be consistent to slightly down, in line with the glass market.

Optical Communications

The following tables provide net sales and net income for the Optical Communications segment and reconcile the non-GAAP financial measures for the Optical Communications segment with our financial statements presented in accordance with GAAP (in millions):

	Three months ended September 30, 2016				Nine months ended September 30, 2016
(in millions)	Net sales		Net income		Net sales		Net income
As reported - GAAP	$	795	$	78	$	2,186	$	172
Acquisition-related costs (3)				3				16
Discrete tax items and other tax-related adjustments (4)				6				6
Restructuring, impairment and other charges (6)				7				12
Pension mark to market (10)				4				4
Core performance	$	795	$	98	$	2,186	$	210

	Three months ended September 30, 2015				Nine months ended September 30, 2015
(in millions)	Net sales		Net income		Net sales		Net income
As reported - GAAP	$	747	$	70	$	2,244	$	204
Acquisition-related costs (3)				1				15
Restructuring, impairment and other charges (6)								(1)
Post-combination expenses (9)								16
Core performance	$	747	$	71	$	2,244	$	234

See Part 1, Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations, Results of Operations – Core Performance Measures, Reconciliation of Non-GAAP Measures, “Items which we exclude from GAAP measures to arrive at core performance measures” for the descriptions of the footnoted reconciling items.

As Reported

Net sales in the Optical Communications segment increased by $48 million, or 6%, in the third quarter of 2016 when compared to the same period in 2015.  The increase was due to higher sales of fiber-to-the-home products in North America and the impact of an acquisition completed in the second quarter of 2016.  Net income in the third quarter of 2016 increased by $8 million, or 11%, when compared to the third quarter of 2015, driven by an increase in volume, favorable product mix and improvements in manufacturing efficiency, offset slightly by higher operating expenses driven by restructuring, impairment and other charges and pension mark-to-market costs.  Movements in foreign exchange rates positively impacted segment net sales in the amount of $2 million and net income in the amount of $3 million in the third quarter of 2016 when compared to the same period in 2015.

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Net sales and net income in the Optical Communications segment decreased by $58 million, or 3%, and $32 million, or 16%, respectively, in the nine months ended September 30, 2016, when compared to the same period in 2015.  This decline was driven by production issues related to the implementation of new manufacturing software, which constrained our ability to manufacture product in the first half of 2016.  Production returned to normal levels at the end of the second quarter, and the increase in volume in the third quarter partially offset the lower first half results.  Movements in foreign exchange rates negatively impacted segment net sales in the amount of $6 million and positively impacted net income in the amount of $10 million, respectively, in the third quarter of 2016 when compared to the same period in 2015.

Core Performance

Core earnings increased in the third quarter of 2016 by $27 million, or 38%, respectively, driven by an increase in volume, favorable product mix and improvements in manufacturing efficiency.  Core earnings were lower in the first nine months of 2016, down $24 million, or 10%, driven by the production issues described above, offset slightly by higher sales in the third quarter of 2016.  Movements in foreign exchange rates positively impacted core earnings in the amounts of $3 million and $10 million, respectively, in the three and nine months ended September 30, 2016 when compared to the same periods in 2015.

Outlook:

In the fourth quarter, Corning expects Optical Communications sales to increase by a high-single digit percentage on a year-over-year basis driven by continued fiber-to-the-home strength.

Environmental Technologies

The following table provides net sales and net income for the Environmental Technologies segment and reconciles the non-GAAP financial measures for the Environmental Technologies segment with our financial statements presented in accordance with GAAP (in millions):

	Three months ended September 30, 2016				Nine months ended September 30, 2016
(in millions)	Net sales		Net income		Net sales		Net income
As reported - GAAP	$	264	$	35	$	787	$	106
Restructuring, impairment and other charges (6)								3
Core performance measures	$	264	$	35	$	787	$	109

	Three months ended September 30, 2015				Nine months ended September 30, 2015
(in millions)	Net sales		Net income		Net sales		Net income
As reported - GAAP	$	257	$	38	$	799	$	132
Core performance measures	$	257	$	38	$	799	$	132

See Part 1, Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations, Results of Operations – Core Performance Measures, Reconciliation of Non-GAAP Measures, “Items which we exclude from GAAP measures to arrive at core performance measures” for the descriptions of the footnoted reconciling items.

As Reported

Net sales in the Environmental Technologies segment increased by $7 million, or 3%, in the third quarter of 2016 when compared to the same period in 2015.  Sales of light-duty substrate products were at record levels in the third quarter, driven by market strength in North America, Europe and China.  Lower sales of heavy-duty diesel products in North America and China partially offset this increase.  Net income in the third quarter of 2016 decreased by $3 million, or 8%, driven by increased expenses in support of new product launches.  Movements in foreign exchange rates versus the U.S. dollar negatively impacted net sales and net income in this segment in the amounts of $5 million and $2 million, respectively, in the third quarter of 2016, when compared to the same period in 2015.

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Net sales in the Environmental Technologies segment decreased by $12 million, or 2%, in the first three quarters of 2016 when compared to the same period in 2015, driven by lower sales of diesel products due to the weakening of the North American truck market, offset partially by an increase in sales of light-duty substrates, driven by strength in the North American, European and Chinese markets.  Net income decreased by $26 million, or 20%, driven by lower sales of heavy-duty diesel products and increased expenses in support of new product launches.  Movements in foreign exchange rates versus the U.S. dollar negatively impacted net sales and net income in this segment in the amounts of $15 million and $6 million, respectively, in the nine months ended September 30, 2016, when compared to the same period in 2015.

Core Performance

Core earnings decreased by $3 million, or 8%, and $23 million, or 17%, in the third quarter and first three quarters of 2016, driven by the items impacting our As Reported results described above.

Outlook:

In the fourth quarter, the Company anticipates Environmental Technologies sales to be down by a low-single digit percentage on a year-over-year basis driven by continued weakness in the heavy-duty truck markets.

Specialty Materials

The following tables provide net sales and net income for the Specialty Materials segment and reconciles the non-GAAP financial measures for the Specialty Materials segment with our financial statements presented in accordance with GAAP (in millions):

	Three months ended September 30, 2016				Nine months ended September 30, 2016
(in millions)	Net sales		Net income		Net sales		Net income
As reported - GAAP	$	295	$	42	$	788	$	106
Constant-yen (1)								(1)
Constant-won (1)								(1)
Restructuring, impairment and other charges (6)								14
Taiwan power outage (12)				2				6
Core performance	$	295	$	44	$	788	$	124

	Three months ended September 30, 2015				Nine months ended September 30, 2015
(in millions)	Net sales		Net income		Net sales		Net income
As reported - GAAP	$	288	$	46	$	832	$	128
Constant-yen (1)				(2)				(5)
Constant-won (1)				(1)				(1)
Foreign currency hedges related to translated earnings (2)								5
Restructuring, impairment and other charges (6)				1				7
Core performance	$	288	$	44	$	832	$	134

See Part 1, Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations, Results of Operations – Core Performance Measures, Reconciliation of Non-GAAP Measures, “Items which we exclude from GAAP measures to arrive at core performance measures” for the descriptions of the footnoted reconciling items.

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As Reported

Net sales in the Specialty Materials segment increased by $7 million, or 2%, in the third quarter of 2016 when compared to the same period in 2015, driven by higher sales of advanced optics products and an increase in Corning Gorilla Glass volume.  Net income in the third quarter of 2016 decreased by $4 million, or 9%, impacted by ramp up costs associated with launch of new products, and customer mix.  Movements in foreign exchange rates did not materially impact net sales and net income in the Specialty Materials segment in the three months ended September 30, 2016 when compared to the same period in 2015.

Net sales in the Specialty Materials segment decreased by $44 million, or 5%, in the first three quarters of 2016 when compared to the same period in 2015, driven by a decrease in sales of Corning Gorilla Glass products.  The mobile consumer electronics industry is experiencing lower smartphone and tablet demand in 2016, driven by worldwide macroeconomic conditions, fewer major product launches and longer repurchases cycles.  Net income decreased by $22 million, or 17%, driven by higher restructuring, impairment and other charges and the impact of a power outage that temporarily halted production at our Tainan, Taiwan manufacturing location.  Movements in foreign exchange rates did not materially impact net sales and net income in the Specialty Materials segment in the nine months ended September 30, 2016 when compared to the same period in 2015.

Core Performance

Core earnings in the third quarter of 2016 was consistent with the same period in 2015.  Core earnings declined by $10 million, or 7%, in the nine months ended September 30, 2016, driven primarily by a decline in sales of Corning Gorilla Glass products and higher research and development costs.

Outlook:

Fourth-quarter segment sales are expected to increase by a high-single digit percentage year over year driven by volume growth in Corning Gorilla Glass.

Life Sciences

The following tables provide net sales and net income for the Life Sciences segment and reconcile the non-GAAP financial measures for the Life Sciences segment with our financial statements presented in accordance with GAAP (in millions):

	Three months ended September 30, 2016				Nine months ended September 30, 2016
(in millions)	Net sales		Net income		Net sales		Net income
As reported – GAAP	$	214	$	16	$	633	$	45
Acquisition-related costs (3)				3				9
Restructuring, impairment and other charges (6)				2				6
Core performance	$	214	$	21	$	633	$	60

	Three months ended September 30, 2015				Nine months ended September 30, 2015
(in millions)	Net sales		Net income		Net sales		Net income
As reported – GAAP	$	211	$	18	$	619	$	52
Acquisition-related costs (3)				3				9
Core performance	$	211	$	21	$	619	$	61

See Part 1, Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations, Results of Operations – Core Performance Measures, Reconciliation of Non-GAAP Measures, “Items which we exclude from GAAP measures to arrive at core performance measures” for the descriptions of the footnoted reconciling items.

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As Reported

Net sales in the Life Sciences segment increased by $3 million, or 1%, in the third quarter of 2016 when compared to the same period in 2015, driven by volume growth in Europe, North America and China, slightly offset by the impact of movements in foreign exchange rates in the amount of $2 million.  Net income declined by $2 million, or 11%, driven by the negative impact of movements in foreign exchange rates.

Net sales in the Life Sciences segment increased by $14 million, or 2%, in the nine months ended September 30, 2016 when compared to the same period in 2015, driven by volume growth in Europe, North America and China, slightly offset by the impact of movements in foreign exchange rates in the amount of $7 million.  Net income declined by $7 million, or 13%, driven by the negative impact of movements in foreign exchange rates.

Core Performance

Core earnings in the three and nine months ended September 30, 2016 were consistent with the prior year.

Outlook:

Fourth-quarter sales are expected to grow by a low single-digit percentage when compared to the fourth quarter of 2015.

All Other

All other segments that do not meet the quantitative threshold for separate reporting have been grouped as “All Other.”  This group is primarily comprised of the results of Corning’s Pharmaceutical Technologies business, which consists of a pharmaceutical glass business and a glass tubing business used in the pharmaceutical packaging industry.  This segment also includes Corning Precision Materials’ non-LCD business and new product lines and development projects, as well as certain corporate investments such as Eurokera and Keraglass equity affiliates.

The following table provides net sales and other data for All Other (in millions):

	Three months ended September 30,				Nine months ended September 30,
As Reported	2016		2015		2016		2015
Net sales	$	37	$	12	$	112	$	32
Research, development and engineering expenses	$	47	$	34	$	139	$	123
Equity earnings of affiliated companies	$	(3)	$	4	$	(8)	$	12
Net loss	$	(47)	$	(38)	$	(187)	$	(131)

The increase in net sales of this segment in the three and nine months ended September 30, 2016 reflects the impact of an acquisition in the Corning Pharmaceutical Technologies business completed in the fourth quarter of 2015 and an increase in sales in our emerging businesses.  The increase in the net loss of this segment was driven by asset write-offs in emerging businesses, offset slightly by the addition of the Corning Pharmaceutical Technologies business net income.

CAPITAL RESOURCES AND LIQUIDITY

Financing and Capital Resources

The following items impacted Corning’s financing and capital structure in the nine months ended September 30, 2016 and 2015:

2016

On July 20, 2016, Corning’s Board of Directors approved a $1 billion increase to our commercial paper program, raising it to $2 billion.  If needed, this program is supported by our $2 billion revolving credit facility that expires in 2019.

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2015

In the second quarter of 2015, we issued $375 million of 1.50% senior unsecured notes that mature on May 8, 2018 and $375 million of 2.90% senior unsecured notes that mature on May 15, 2022.  The net proceeds of $745 million will be used for general corporate purposes.  We can redeem these debentures at any time, subject to certain stipulations.

Common Stock Dividends

On February 3, 2016, Corning’s Board of Directors declared a 12.5% increase in the Company’s quarterly common stock dividend, which increased the quarterly dividend from $0.12 to $0.135 per share of common stock, beginning with the dividend paid in the first quarter of 2016.

Share Repurchase Program

On July 28, 2016, Corning entered into an accelerated share repurchase transaction (“ASR”) with Morgan Stanley & Co. LLC (“Morgan Stanley”) to repurchase $2 billion of Corning’s common stock in two tranches of $1.5 billion and $500 million, respectively, each with its own scheduled termination date.  The ASR was executed under the $4 billion share repurchase program authorized on October 26, 2015 (the “2015 Repurchase Program”).  Under the ASR, Corning made a $2 billion aggregate payment to Morgan Stanley on July 28, 2016 and received an initial aggregate delivery of 74.4 million shares of Corning common stock from Morgan Stanley on the same day.  Each tranche is subject to acceleration at Morgan Stanley’s option during an acceleration period prior to its scheduled termination date.  The total number of shares Corning will repurchase under each tranche of the ASR will be based generally upon the average daily volume weighted average price of Corning’s common stock during the repurchase period for such tranche, less a discount and subject to adjustments pursuant to the terms and conditions of the ASR.  Depending on the circumstances at settlement of each tranche, Morgan Stanley may be required to deliver additional shares of common stock to Corning or Corning may be required either to deliver shares of common stock or to make a cash payment to Morgan Stanley.  Final settlement of both tranches of the ASR is scheduled to occur in the fourth quarter of 2016.

In addition to the ASR, during the three and nine months ended September 30, 2016, the Company repurchased 15.3 million and 96 million shares of common stock on the open market for approximately $340 million and $1,901 million, respectively, as part of its 2015 Repurchase Program.

Capital Spending

Capital spending totaled $815 million and $939 million for the nine months ended September 30, 2016 and 2015, respectively.  Spending in the first nine months of 2016 was driven primarily by the Display Technologies segment, and focused on finishing line optimization and tank rebuilds.  We expect our 2016 capital spending to be approximately $1.2 billion.

Cash Flow

Summary of cash flow data (in millions):

	Nine months ended September 30,
	2016		2015
Net cash provided by operating activities	$	1,095	$	1,845
Net cash provided by (used in) investing activities	$	3,956	$	(822)
Net cash used in financing activities	$	(4,858)	$	(1,589)

Net cash provided by operating activities decreased by $750 million in the nine months ended September 30, 2016 when compared to the same period last year, driven largely by a decline of $123 million in dividends received from equity affiliates primarily driven by the strategic realignment of our ownership interest in Dow Corning and an increase in accounts receivable in all of our segments, notably in the Display Technologies and Optical Communications segments, offset somewhat by a decrease in accounts payable and other current liabilities.

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Net cash provided by investing activities increased substantially in the nine months ended September 30, 2016, when compared to the same period last year, driven by the cash received on the realignment of Dow Corning, lower capital expenditures and a decrease in acquisition spending, offset slightly by a decrease in realized gains on our translated earnings contracts.

Net cash used in financing activities in the nine months ended September 30, 2016 increased when compared to the same period last year, driven by an increase in share repurchases, net commercial paper repayments and the absence of cash received from the issuance of long-term debt in the third quarter of 2015.

Key Balance Sheet Data

Balance sheet and working capital measures are provided in the following table (dollars in millions):

	As of September 30, 2016		As of December 31, 2015
Working capital	$	6,185	$	5,455
Current ratio		3.7:1		2.9:1
Trade accounts receivable, net of allowances	$	1,645	$	1,372
Days sales outstanding		59		55
Inventories	$	1,516	$	1,385
Inventory turns		3.8		4.0
Days payable outstanding (1)		43		42
Long-term debt	$	3,916	$	3,890
Total debt to total capital		18%		19%

(1) Includes trade payables only.

Credit Rating

Our credit ratings remain the same as those disclosed in our 2015 Form 10-K.

RATING AGENCY	Rating Long-Term Debt	Outlook last update
Fitch	BBB+	Stable
		October 29, 2015
Standard & Poor’s	BBB+	Stable
		October 27, 2015
Moody’s	Baa1	Stable
		October 28, 2015

Management Assessment of Liquidity

We ended the third quarter of 2016 with approximately $4.8 billion of cash and cash equivalents, an increase of $321 million from December 31, 2015.  We believe the Company has adequate sources of liquidity and we are confident in our ability to generate cash to meet reasonably likely future cash requirements.  Our cash and cash equivalents, which are generally unrestricted, are held in various locations throughout the world, with approximately 64% of the consolidated amount held outside of the United States at September 30, 2016.  We believe we have sufficient U.S. liquidity, including borrowing capacity, to fund foreseeable U.S. cash needs without requiring the repatriation of foreign cash.  We utilize a variety of financing strategies to ensure that our worldwide cash is available in the locations in which it is needed.

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Corning also has a commercial paper program pursuant to which we may issue short-term, unsecured commercial paper notes.  On July 20, 2016, Corning’s Board of Directors approved an increase to the allowable maximum aggregate principal amount outstanding at any time from $1 billion to $2 billion.  Under this program, the Company may issue the notes from time to time and will use the proceeds for general corporate purposes.  The Company’s $2 billion revolving credit facility is available to support obligations under the commercial paper program, if needed.  Corning did not have outstanding commercial paper at September 30, 2016.

Other

We complete comprehensive reviews of our significant customers and their creditworthiness by analyzing their financial strength at least annually or more frequently for customers where we have identified a measure of increased risk.  We closely monitor payments and developments which may signal possible customer credit issues.  We currently have not identified any potential material impact on our liquidity resulting from customer credit issues.

Our major source of funding for 2016 and beyond will be our operating cash flow, our existing balances of cash and cash equivalents and proceeds from any issuances of debt.  We believe we have sufficient liquidity for the next several years to fund operations, acquisitions, the asbestos litigation, capital expenditures, scheduled debt repayments and dividend payments and share repurchase programs.

Corning has access to a $2 billion unsecured committed revolving credit facility.  This credit facility includes a leverage ratio financial covenant.  The required leverage ratio, which measures debt to total capital, is a maximum of 50%.  At September 30, 2016, our leverage using this measure was approximately 18% and we are in compliance with the financial covenant.

Our debt instruments contain customary event of default provisions, which allow the lenders the option of accelerating all obligations upon the occurrence of certain events.  In addition, some of our debt instruments contain a cross default provision, whereby an uncured default in excess of a specified amount on one debt obligation of the Company, also would be considered a default under the terms of another debt instrument.As of September 30, 2016, we were in compliance with all such provisions.

Management is not aware of any known trends or any known demands, commitments, events or uncertainties that will result in or that are reasonably likely to result in a material decrease in our liquidity.  In addition, other than items discussed, there are no known material trends, favorable or unfavorable, in our capital resources and no expected material changes in the mix and relative cost of such resources.

Off Balance Sheet Arrangements

There have been no material changes outside the ordinary course of business in our off balance sheet arrangements as disclosed in our 2015 Form 10-K under the caption “Off Balance Sheet Arrangements.”

Contractual Obligations

There have been no material changes outside the ordinary course of business in the contractual obligations disclosed in our 2015 Form 10-K under the caption “Contractual Obligations.”

CRITICAL ACCOUNTING ESTIMATES

The preparation of financial statements requires management to make estimates and assumptions that affect amounts reported therein.  The estimates that required management’s most difficult, subjective or complex judgments are described in our 2015 Form 10-K and remain unchanged through the first nine months of 2016.  For certain items, additional details are provided below.

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Impairment of Assets Held for Use

We are required to assess the recoverability of the carrying value of long-lived assets when an indicator of impairment has been identified.  We review our long-lived assets in each quarter in which impairment indicators are present.  We must exercise judgment in assessing whether an event of impairment has occurred.

Manufacturing equipment includes certain components of production equipment that are constructed of precious metals, primarily platinum and rhodium.  These metals are not depreciated because they have very low physical losses and are repeatedly reclaimed and reused in our manufacturing process and have a very long useful life.  Precious metals are reviewed for impairment as part of our assessment of long-lived assets.  This review considers all of the Company’s precious metals that are either in place in the production process; in reclamation, fabrication, or refinement in anticipation of re-use; or awaiting use to support increased capacity.  Precious metals are only acquired to support our operations and are not held for trading or other purposes.

At September 30, 2016 and December 31, 2015, the carrying value of precious metals was higher than the fair market value by $868 million and $976 million, respectively.  These precious metals are utilized by the Display Technologies and Specialty Materials segments.  Corning believes these precious metal assets to be recoverable due to the significant positive cash flow in both segments.  The potential for impairment exists in the future if negative events significantly decrease the cash flow of these segments.  Such events include, but are not limited to, a significant decrease in demand for products or a significant decrease in profitability in our Display Technologies or Specialty Materials segments.

NEW ACCOUNTING STANDARDS

Refer to Note 1 (Significant Accounting Policies) to the Consolidated Financial Statements.

ENVIRONMENT

Corning has been named by the Environmental Protection Agency (“the Agency”) under the Superfund Act, or by state governments under similar state laws, as a potentially responsible party for 17 active hazardous waste sites.  Under the Superfund Act, all parties who may have contributed any waste to a hazardous waste site, identified by the Agency, are jointly and severally liable for the cost of cleanup unless the Agency agrees otherwise.  It is Corning’s policy to accrue for its estimated liability related to Superfund sites and other environmental liabilities related to property owned by Corning based on expert analysis and continual monitoring by both internal and external consultants.  At September 30, 2016 and December 31, 2015, Corning had accrued approximately $45 million (undiscounted) and $37 million (undiscounted), respectively, for the estimated liability for environmental cleanup and related litigation.  Based upon the information developed to date, management believes that the accrued reserve is a reasonable estimate of the Company’s liability and that the risk of an additional loss in an amount materially higher than that accrued is remote.

FORWARD-LOOKING STATEMENTS

The statements in this Quarterly Report on Form 10-Q, in reports subsequently filed by Corning with the Securities and Exchange Commission (“SEC”) on Forms 8-K, and related comments by management that are not historical facts or information and contain words such as “will,” “believe,” “anticipate,” “expect,” “intend,” “plan,” “seek,” “see,” “would,” and “target” and similar expressions are forward-looking statements.  Such statements relate to future events that by their nature address matters that are, to different degrees, uncertain.  These forward-looking statements relate to, among other things, the company’s future operating performance, the company's share of new and existing markets, the company's revenue and earnings growth rates, the company’s ability to innovate and commercialize new products, and the company’s implementation of cost-reduction initiatives and measures to improve pricing, including the optimization of the company’s manufacturing capacity.

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Although the company believes that these forward-looking statements are based upon reasonable assumptions regarding, among other things, current estimates and forecasts, general economic conditions, its knowledge of its business, and key performance indicators that impact the company, actual results could differ materially.  The company does not undertake to update forward-looking statements.  Some of the risks, uncertainties and other factors that could cause actual results to differ materially from those expressed in or implied by the forward-looking statements include, but are not limited to:

- global business, financial, economic and political conditions;

- tariffs and import duties;

- currency fluctuations between the U.S. dollar and other currencies, primarily the Japanese yen, New Taiwan dollar, euro, Chinese renminbi and South Korean won;

- product demand and industry capacity;

- competitive products and pricing;

- availability and costs of critical components and materials;

- new product development and commercialization;

- order activity and demand from major customers;

- capital allocation plans, as such plans may change including with respect to the timing and size of share repurchases, acquisitions, joint ventures, dispositions and other strategic actions;

- the effectiveness of our risk management framework;

- fluctuations in capital spending by customers;

- the amount and timing of our cash flows and earnings and other conditions, which may affect our ability to pay our quarterly dividend at the planned level or to repurchase shares at planned levels;

- possible disruption in commercial activities due to terrorist activity, cyber-attack, armed conflict, political or financial instability, natural disasters, or major health concerns;

- unanticipated disruption to equipment, facilities, IT systems or operations;

- facility expansions and new plant start-up costs;

- effect of regulatory and legal developments;

- ability to pace capital spending to anticipated levels of customer demand;

- credit rating and ability to obtain financing and capital on commercially reasonable terms;

- adequacy and availability of insurance;

- financial risk management;

- acquisition and divestiture activities;

- rate of technology change;

- level of excess or obsolete inventory;

- ability to enforce patents and protect intellectual property and trade secrets;

- adverse litigation;

- product and components performance issues;

- retention of key personnel;

- stock price fluctuations;

- trends for the continued growth of the Company’s businesses;

- the ability of research and development projects to produce revenues in future periods;

- a downturn in demand or decline in growth rates for LCD glass substrates;

- customer ability, most notably in the Display Technologies segment, to maintain profitable operations and obtain financing to fund their ongoing operations and manufacturing expansions and pay their receivables when due;

- loss of significant customers;

- fluctuations in supply chain inventory levels;

- equity company activities;

- changes in tax laws and regulations;

- changes in accounting rules and standards;

- the potential impact of legislation, government regulations, and other government action and investigations;

- temporary idling of capacity or delaying expansion;

- the ability to implement productivity, consolidation and cost reduction efforts, and to realize anticipated benefits;

- restructuring actions and charges; and

- other risks detailed in Corning’s SEC filings.

© 2016 Corning Incorporated. All Rights Reserved.

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ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market Risk Disclosures

As noted in our 2015 Form 10-K, we operate and conduct business in many foreign countries and as a result are exposed to fluctuations between the U.S. dollar and other currencies.  Volatility in the global financial markets could increase the volatility of foreign currency exchange rates which would, in turn, impact our sales and net income.  For a discussion of our exposure to market risk and how we mitigate that risk, refer to Part II, Item 1A, Risk Factors in this Quarterly Report on Form 10-Q and Part II, Item 7A, Quantitative and Qualitative Disclosures About Market Risks, contained in our 2015 Form 10-K.

During the nine months ended September 30, 2016 the Company entered into a series of average rate forwards with no associated premium, which partially hedge the impact of Japanese yen translation on the Company’s projected 2018 through 2022 net income.  At September 30, 2016 the total gross notional value for the yen translated earnings contracts was $16.0 billion (at December 31, 2015: $8.3 billion), including zero-cost collars of $1.5 billion (at December 31, 2015: $2.0 billion) and average rate forwards of $14.5 billion (at December 31, 2015: $6.3 billion).  With respect to the zero-cost collars, the gross notional amount includes the value of both the put and call options.  However, due to the nature of the zero-cost collars, either the put or the call option can be exercised at maturity.  As of September 30, 2016, the total net notional value of the zero-cost collars was $0.7 billion (at December 31, 2015: $1.0 billion).

The fair value of our unsettled foreign exchange forward and option contracts is most significantly impacted by fluctuations in the Japanese yen.  At September 30, 2016, a hypothetical 10% adverse movement in Japanese yen exchange rates could result in an unrealized loss in fair value of these instruments of $1.8 billion (at December 31, 2015: $0.7 billion).  Changes in fair values of these instruments are ultimately offset in the period of settlement by changes in the fair value of the underlying exposure.  Prior to settlement, the unrealized fair value changes could cause material volatility in our earnings. 

ITEM 4.  CONTROLS AND PROCEDURES

Under the supervision of and with the participation of Corning’s management, including our chief executive officer and chief financial officer, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended), as of September 30, 2016, the end of the period covered by this report.  Based on that evaluation, we have concluded that the Company’s disclosure controls and procedures were effective as of that date.  Corning’s disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by Corning in the reports that it files or submits under the Exchange Act is accumulated and communicated to Corning’s management, including Corning’s principal executive and principal financial officers, or other persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

An evaluation of our internal controls over financial reporting was also performed to determine whether any changes have occurred during the period covered by this Report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.  The chief executive officer and chief financial officer concluded that there was no change in Corning’s internal control over financial reporting that materially affected, or is reasonably likely to materially affect, internal control over financial reporting.

© 2016 Corning Incorporated. All Rights Reserved.

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Part II – Other Information

ITEM 1.  LEGAL PROCEEDINGS

DowCorningCorporation.See our 2015 Form 10-K, Part I, Item 3. Given the realignment of our ownership interest in Dow Corning on May 31, 2016, the Company no longer has an ownership interest in Dow Corning and will no longer provide litigation disclosure regarding Dow Corning Corporation.

Pittsburgh CorningCorporation.  See our 2015 Form 10-K, Part I, Item 3.  On April 27, 2016, the Modified Third Amended Plan of Reorganization for Pittsburgh Corning Corporation (the “Plan”) became effective.  Given the effectiveness of the Plan and the contribution of PCC and PCE to the settlement trust, the Company will no longer provide litigation disclosure regarding Pittsburgh Corning Corporation.  For additional information and updates to estimated liabilities as of September 30, 2016, see Part I, Item 1, Financial Statements, Note 3 (Commitments, Contingencies and Guarantees) of the Notes to Unaudited Consolidated Financial Statements included under Item 1 of this quarterly report, which is incorporated herein by reference.

Non-PCC AsbestosLitigation.  See our 2015 Form 10-K, Part I, Item 3.  For additional information and updates to estimated liabilities as of September 30, 2016, see Part I, Item 1, Financial Statements, Note 3 (Commitments, Contingencies and Guarantees) of the Notes to Unaudited Consolidated Financial Statements included under Item 1 of this quarterly report, which is incorporated herein by reference.

EnvironmentalLitigation. See our 2015 Form 10-K, Part I, Item 3.  For updates to estimated liabilities as of September 30, 2016, see Part I, Item 1, Financial Statements, Note 3 (Commitments, Contingencies and Guarantees) of the Notes to Unaudited Consolidated Financial Statements included under Item 1 of this quarterly report, which is incorporated herein by reference.

ChineseAnti-DumpingInvestigationInvolvingOpticalFiberPreformsProduced intheUnited States.See our 2015 Form 10-K, Part I, Item 3.

ITEM 1A.  RISK FACTORS

In addition to other information set forth in this report, you should carefully consider the factors discussed in Part I, Item 1A. Risk Factors in our 2015 Form 10-K, which could materially impact our business, financial condition or future results.  Risks disclosed in our 2015 Form 10-K are not the only risks facing our Company.  Additional risks and uncertainties not currently known to us or that we currently deem immaterial may materially adversely impact our business, financial condition or operating results.  There have been no material changes to Part I, Item 1A. Risk Factors in our 2015 Form 10-K except for the updated risk factor listed below.

© 2016 Corning Incorporated. All Rights Reserved.

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ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

This table provides information about our purchases of our common stock during the third quarter of 2016:

Issuer Purchases of Equity Securities

Period	Total number of shares purchased (1)	Average price paid per share (1)	Number of shares purchased as part of publicly announced plan or program (2)	Approximate dollar value of shares that may yet be purchased under the plans or programs (2)
July 1-31, 2016	79,260,346	$21.47	79,189,464	$1,010,581,646
August 1-31, 2016	5,525,500	$22.71	5,523,401	$   885,135,880
September 1-30, 2016	5,006,403	$22.88	5,004,963	$   770,601,760
Total	89,792,249	$21.62	89,717,828	$   770,601,760

(1) This column reflects the following transactions during the third quarter of 2016:  (i) the deemed surrender to us of 25,679 shares of common stock to satisfy tax withholding obligations in connection with the vesting of employee restricted stock units; (ii) the surrender to us of 48,742 shares of common stock to satisfy tax withholding obligations in connection with the vesting of restricted stock issued to employees; and (iii) the purchase of 89,717,828 shares of common stock in conjunction with the repurchase program announced on October 26, 2015.

(2) On October 26, 2015, Corning’s Board of Directors authorized the repurchase of up to $4 billion worth of shares of common stock between date of announcement and December 31, 2016.

© 2016 Corning Incorporated. All Rights Reserved.

60

ITEM 6.  EXHIBITS

(a)	Exhibits
	Exhibit Number	Exhibit Name
	10.1	Master Confirmation – Uncollared Accelerated Share Repurchase
	31.1	Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) under the Exchange Act
	31.2	Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) under the Exchange Act
	32	Certification Pursuant to 18 U.S.C. Section 1350
	101.INS	XBRL Instance Document
	101.SCH	XBRL Taxonomy Extension Schema Document
	101.CAL	XBRL Taxonomy Calculation Linkbase Document
	101.LAB	XBRL Taxonomy Label Linkbase Document
	101.PRE	XBRL Taxonomy Presentation Linkbase Document
	101.DEF	XBRL Taxonomy Definition Document

© 2016 Corning Incorporated. All Rights Reserved.

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SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	Corning Incorporated
	(Registrant)
October 27, 2016	/s/ Edward Schlesinger
Date	Edward Schlesinger
	Vice President and Corporate Controller

© 2016 Corning Incorporated. All Rights Reserved.

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EX-10.1

Exhibit 10.1

To: Corning Incorporated
One Riverfront Plaza
Corning, NY 14831
Attention:		Stephen Propper, Assistant Treasurer
Telephone No.:		(607) 248-4492
Facsimile No.:		(607) 974-4375
Re:	Master Confirmation—Uncollared Accelerated Share Repurchase

This master confirmation (this “Master Confirmation”), dated as of July 28, 2016, is intended to set forth certain terms and provisions of certain Transactions (each, a “Transaction”) entered into from time to time between Morgan Stanley & Co. LLC (“Dealer”), and Corning Incorporated, a New York corporation (“Counterparty”).  This Master Confirmation, taken alone, is neither a commitment by either party to enter into any Transaction nor evidence of a Transaction.  The additional terms of any particular Transaction shall be set forth in a Supplemental Confirmation in the form of Schedule A hereto (a “Supplemental Confirmation”), which shall reference this Master Confirmation and supplement, form a part of, and be subject to this Master Confirmation.  This Master Confirmation and each Supplemental Confirmation together shall constitute a “Confirmation” as referred to in the Agreement specified below.

The definitions and provisions contained in the 2002 ISDA Equity Derivatives Definitions (the “Equity Definitions”), as published by the International Swaps and Derivatives Association, Inc., are incorporated into this Master Confirmation.  This Master Confirmation and each Supplemental Confirmation evidence a complete binding agreement between Counterparty and Dealer as to the subject matter and terms of each Transaction to which this Master Confirmation and such Supplemental Confirmation relate and shall supersede all prior or contemporaneous written or oral communications with respect thereto.

This Master Confirmation and each Supplemental Confirmation supplement, form a part of, and are subject to an agreement in the form of the 2002 ISDA Master Agreement (the “Agreement”) as if Dealer and Counterparty had executed the Agreement on the date of this Master Confirmation (but without any Schedule except for (i) the election of New York law as the governing law (without reference to its choice of law provisions) ; the election that Multiple Transaction Payment Netting apply; (iii) the election that, in Section 5(a)(i) of the Agreement, each occurrence of the word “first” in the third line thereof shall be replaced with “third” and (iv) such other elections set forth in this Master Confirmation.

The Transactions shall be the sole Transactions under the Agreement.  If there exists any ISDA Master Agreement between Dealer and Counterparty or any confirmation or other agreement between Dealer and Counterparty pursuant to which an ISDA Master Agreement is deemed to exist between Dealer and Counterparty, then notwithstanding anything to the contrary in such ISDA Master Agreement, such confirmation or agreement or any other agreement to which Dealer and Counterparty are parties, the Transactions shall not be considered Transactions under, or otherwise governed by, such existing or deemed ISDA Master Agreement, and the occurrence of any Event of Default or Termination Event under the Agreement with respect to either party or any Transaction shall not, by itself, give rise to any right or obligation under any such other agreement or deemed agreement.  Notwithstanding anything to the contrary in any other agreement between the parties or their Affiliates, the Transactions shall not be “Specified Transactions” (or similarly treated) under any other agreement between the parties or their Affiliates.

All provisions contained or incorporated by reference in the Agreement shall govern this Master Confirmation and each Supplemental Confirmation except as expressly modified herein or in the related Supplemental Confirmation.

If, in relation to any Transaction to which this Master Confirmation and a Supplemental Confirmation relate, there is any inconsistency between the Agreement, this Master Confirmation, such Supplemental Confirmation and the Equity Definitions, the following will prevail for purposes of such Transaction in the order of precedence indicated: (i) such Supplemental Confirmation; (ii) this Master Confirmation; (iii) the Equity Definitions; and (iv) the Agreement.

© 2016 Corning Incorporated. All Rights Reserved.

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1.Each Transaction constitutes a Share Forward Transaction for the purposes of the Equity Definitions.  Set forth below are the terms and conditions that, together with the terms and conditions set forth in the Supplemental Confirmation relating to any Transaction, shall govern such Transaction.

General Terms.
	Trade Date:	For each Transaction, as set forth in the related Supplemental Confirmation.
	Buyer:	Counterparty
	Seller:	Dealer
	Shares:	The common stock of Counterparty, par value USD 0.50 per share (Exchange symbol “GLW”).
	Exchange:	The New York Stock Exchange
	Related Exchange(s):	All Exchanges.
	Prepayment/Variable Obligation:	Applicable
	Prepayment Amount:	For each Transaction, as set forth in the related Supplemental Confirmation.
	Prepayment Date:	For each Transaction, as set forth in the related Supplemental Confirmation.
Valuation.
	VWAP Price:	For any Exchange Business Day, the Rule 10b-18-compliant dollar volume-weighted average price per Share for such day based on transactions executed during such day, as reported on Bloomberg Screen “GLW US <Equity> AQR SEC” (or any successor thereto), or in the event such price is not so reported on such day for any reason or is manifestly incorrect, as determined, in a commercially reasonable manner, by the Calculation Agent for Rule 10b-18-compliant transactions on such day using a volume weighted method.
	Forward Price:	For each Transaction, the arithmetic average of the VWAP Prices for all of the Exchange Business Days in the Calculation Period for such Transaction, subject to “Valuation Disruption” below.
	Exchange Business Day:	As set forth in the Equity Definitions; provided that any Excluded Days for a Transaction shall not be Exchange Business Days for such Transaction.
	Excluded Days:	For each Transaction, as set forth in the related Supplemental Confirmation.
	Forward Price Adjustment Amount:	For each Transaction, as set forth in the related Supplemental Confirmation.

© 2016 Corning Incorporated. All Rights Reserved.

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Calculation Period:	For each Transaction, the period from, and including, the Calculation Period Start Date for such Transaction to, and including, the Termination Date for such Transaction.
Calculation Period Start Date:	For each Transaction, as set forth in the related Supplemental Confirmation.
Termination Date:	For each Transaction, the Scheduled Termination Date for such Transaction; provided that Dealer shall have the right to designate any Exchange Business Day on or after the First Acceleration Date to be the Termination Date for all of such Transaction (an “Accelerated Termination Date”) by delivering notice (an “Acceleration Notice”) to Counterparty of any such designation prior to 5:00 p.m. (New York City time) on the Exchange Business Day immediately following the designated Accelerated Termination Date.
Scheduled Termination Date:	For each Transaction, as set forth in the related Supplemental Confirmation, subject to postponement as provided in “Valuation Disruption” below.
First Acceleration Date:	For each Transaction, as set forth in the related Supplemental Confirmation.
Valuation Disruption:	The definition of “Market Disruption Event” in Section 6.3(a) of the Equity Definitions is hereby amended by deleting the words “at any time during the one-hour period that ends at the relevant Valuation Time, Latest Exercise Time, Knock-in Valuation Time or Knock-out Valuation Time, as the case may be” and inserting the words “at any time on any Scheduled Trading Day during the Calculation Period or Settlement Valuation Period” after the word “material,” in the third line thereof.
	Section 6.3(d) of the Equity Definitions is hereby amended by deleting the remainder of the provision following the term “Scheduled Closing Time” in the fourth line thereof.

© 2016 Corning Incorporated. All Rights Reserved.

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Notwithstanding anything to the contrary in the Equity Definitions, if a Disrupted Day occurs (i) in the Calculation Period, the Calculation Agent may, in its good faith and commercially reasonable discretion, postpone the Scheduled Termination Date, or (ii) in the Settlement Valuation Period, the Calculation Agent may extend the Settlement Valuation Period.  The Calculation Agent may also determine that (i) such Disrupted Day is a Disrupted Day in full, in which case the VWAP Price for such Disrupted Day shall not be included for purposes of determining the Forward Price or the Settlement Price, as the case may be, or (ii) such Disrupted Day is a Disrupted Day only in part, in which case the VWAP Price for such Disrupted Day shall be determined by the Calculation Agent based on Rule 10b-18-compliant transactions in the Shares on such Disrupted Day taking into account the nature and duration of the relevant Market Disruption Event, and the weighting of the VWAP Price for the relevant Exchange Business Days during the Calculation Period or the Settlement Valuation Period, as the case may be, shall be adjusted in a commercially reasonable manner by the Calculation Agent for purposes of determining the Forward Price or the Settlement Price, as the case may be, with such adjustments based on, among other factors, the duration of any Market Disruption Event and the volume, historical trading patterns and price of the Shares; provided, however, that any Market Disruption Event due to a Regulatory Disruption shall be a Disrupted Day in full.  Any Exchange Business Day on which, as of the date hereof, the Exchange is scheduled to close prior to its normal close of trading shall be deemed not to be an Exchange Business Day; if a closure of the Exchange prior to its normal close of trading on any Exchange Business Day is scheduled following the date hereof, then such Exchange Business Day shall be deemed to be a Disrupted Day in full.

If a Disrupted Day occurs during the Calculation Period for any Transaction or the Settlement Valuation Period for any Transaction, as the case may be, and each of the nine immediately following Scheduled Trading Days is a Disrupted Day (a “Disruption Event”), then the Calculation Agent, in its good faith and commercially reasonable discretion, may deem such Disruption Event (and each consecutive Disrupted Day thereafter) to be either (x) a Potential Adjustment Event in respect of such Transaction or (y) an Additional Termination Event in respect of such Transaction, with Counterparty as the sole Affected Party and such Transaction as the sole Affected Transaction.

© 2016 Corning Incorporated. All Rights Reserved.

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Settlement Terms.
	Settlement Procedures:	For each Transaction:
		(i)	if the Number of Shares to be Delivered for such Transaction is positive, Physical Settlement shall be applicable to such Transaction; provided that Dealer does not, and shall not, make the agreement or the representations set forth in Section 9.11 of the Equity Definitions related to the restrictions imposed by applicable securities laws with respect to any Shares delivered by Dealer to Counterparty under any Transaction; or
		(ii)	if the Number of Shares to be Delivered for such Transaction is negative, then the Counterparty Settlement Provisions in Annex A hereto shall apply to such Transaction.
	Number of Shares to be Delivered:	For each Transaction, a number of Shares (rounded down to the nearest whole number) equal to (a)(i) the Prepayment Amount for such Transaction, divided by (ii)(A) the Forward Price for such Transaction minus (B) the Forward Price Adjustment Amount for such Transaction, minus (b) the number of Initial Shares for such Transaction; provided that if the result of the calculation in clause (a)(ii) is equal to or less than the Floor Price for such Transaction, then the Number of Shares to be Delivered for such Transaction shall be determined as if clause (a)(ii) were replaced with “(ii) the Floor Price for such Transaction”.  For the avoidance of doubt, if the Forward Price Adjustment Amount for any Transaction is a negative number, clause (a)(ii) of the immediately preceding sentence shall be equal to (A) the Forward Price for such Transaction, plus (B) the absolute value of the Forward Price Adjustment Amount.
	Floor Price:	For each Transaction, as set forth in the related Supplemental Confirmation.
	Excess Dividend Amount:	For the avoidance of doubt, all references to the Excess Dividend Amount shall be deleted from Section 9.2(a)(iii) of the Equity Definitions.
	Settlement Date:	For each Transaction, if the Number of Shares to be Delivered for such Transaction is positive, the date that is one Settlement Cycle immediately following the Termination Date for such Transaction.
	Settlement Currency:	USD

© 2016 Corning Incorporated. All Rights Reserved.

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	Initial Share Delivery:	For each Transaction, Dealer shall deliver a number of Shares equal to the Initial Shares for such Transaction to Counterparty on the Initial Share Delivery Date for such Transaction in accordance with Section 9.4 of the Equity Definitions, with such Initial Share Delivery Date deemed to be a “Settlement Date” for purposes of such Section 9.4.
	Initial Share Delivery Date:	For each Transaction, as set forth in the related Supplemental Confirmation
	Initial Shares:	For each Transaction, as set forth in the related Supplemental Confirmation.
Share Adjustments.
	Potential Adjustment Event:	In addition to the events described in Section 11.2(e) of the Equity Definitions, it shall constitute an additional Potential Adjustment Event if (x) the Scheduled Termination Date for any Transaction is postponed pursuant to “Valuation Disruption” above (including, for the avoidance of doubt, pursuant to Section 7 hereof), (y) a Regulatory Disruption as described in Section 7 occurs or (z) a Disruption Event occurs.  In the case of any event described in clause (x), (y) or (z) above occurs, the Calculation Agent may, in its commercially reasonable judgment, adjust any relevant terms of such Transaction as necessary to preserve as nearly as practicable the fair value of such Transaction to Dealer prior to such postponement, Regulatory Disruption or Disruption Event.
	Excess Dividend:	For any calendar quarter, any dividend or distribution on the Shares with an ex-dividend date occurring during such calendar quarter (other than any dividend or distribution of the type described in Section 11.2(e)(i) or Section 11.2(e)(ii)(A) of the Equity Definitions or any Extraordinary Dividend) (a “Dividend”) the amount or value of which per Share (as determined by the Calculation Agent), when aggregated with the amount or value (as determined by the Calculation Agent) of any and all previous Dividends with ex-dividend dates occurring in the same calendar quarter, exceeds the Ordinary Dividend Amount.
	Extraordinary Dividend	Means the per Share cash dividend or distribution, or a portion thereof, declared by Counterparty on the Shares that is classified by the board of directors of Counterparty as an “extraordinary” dividend.  For the avoidance of doubt, no dividend paid on Counterparty’s Fixed Rate Cumulative Convertible Preferred Stock, Series A, par value $100 per share (“Preferred Stock”), shall be considered a Dividend, Excess Dividend or Extraordinary Dividend under this Master Confirmation or any Supplemental Confirmation.

© 2016 Corning Incorporated. All Rights Reserved.

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	Consequences of Excess Dividend:	The declaration by the Issuer of any Excess Dividend, the ex-dividend date for which occurs or is scheduled to occur during the Relevant Dividend Period for any Transaction, shall, at Dealer’s election in its sole judgment, either (x) constitute an Additional Termination Event in respect of such Transaction, with Counterparty as the sole Affected Party and such Transaction as the sole Affected Transaction or (y) result in an adjustment, by the Calculation Agent, to the Floor Price as the Calculation Agent determines appropriate to account for the economic effect on such Transaction of such Excess Dividend; provided that Dealer’s election must be made within 10 days of the first public announcement of such Excess Dividend.
	Ordinary Dividend Amount:	For each Transaction, as set forth in the related Supplemental Confirmation.
	Method of Adjustment:	Calculation Agent Adjustment
	Early Ordinary Dividend Payment:	For each Transaction, if an ex-dividend date for any Dividend that is not (x) an Excess Dividend or (y) a dividend or distribution of the type described in Section 11.2(e)(i) or Section 11.2(e)(ii)(A) of the Equity Definitions, occurs during any calendar quarter occurring (in whole or in part) during the Relevant Dividend Period for such Transaction and is prior to the Scheduled Ex-Dividend Date for such Transaction for the relevant calendar quarter (as determined by the Calculation Agent), then the Calculation Agent shall make such adjustment to the exercise, settlement, payment or any other terms of the relevant Transaction as the Calculation Agent determines appropriate to account for the economic effect on such Transaction of such event.
	Scheduled Ex-Dividend Dates:	For each Transaction, as set forth in the related Supplemental Confirmation for each calendar quarter.
	Relevant Dividend Period:	For each Transaction, the period from, and including, the Trade Date for such Transaction to, and including, the Relevant Dividend Period End Date for such Transaction.
	Relevant Dividend Period End Date:	For each Transaction, if the Number of Shares to be Delivered for such Transaction is negative, the last day of the Settlement Valuation Period; otherwise, the Termination Date for such Transaction.
Extraordinary Events.
	Consequences of Merger Events:
	(a) Share-for-Share:	Modified Calculation Agent Adjustment
	(b) Share-for-Other:	Cancellation and Payment
	(c) Share-for-Combined:	Component Adjustment

© 2016 Corning Incorporated. All Rights Reserved.

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Tender Offer:	Applicable; provided that (a) Section 12.1(l) of the Equity Definitions shall be amended (i) by deleting the parenthetical in the fifth line thereof, (ii) by replacing “that” in the fifth line thereof with “whether or not such announcement” and (iii) by adding immediately after the words “Tender Offer” in the fifth line thereof “, and any publicly announced change or amendment to such an announcement (including, without limitation, the announcement of an abandonment of such intention)” and (b) Sections 12.3(a) and 12.3(d) of the Equity Definitions shall each be amended by replacing each occurrence of the words “Tender Offer Date” by “Announcement Date.”
Consequences of Tender Offers:
(a) Share-for-Share:	Modified Calculation Agent Adjustment
(b) Share-for-Other:	Modified Calculation Agent Adjustment
(c) Share-for-Combined:	Modified Calculation Agent Adjustment
Nationalization, Insolvency or Delisting:	Cancellation and Payment; provided that in addition to the provisions of Section 12.6(a)(iii) of the Equity Definitions, it shall also constitute a Delisting if the Exchange is located in the United States and the Shares are not immediately re-listed, re-traded or re-quoted on any of the New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or their respective successors); if the Shares are immediately re-listed, re-traded or re-quoted on any such exchange or quotation system, such exchange or quotation system shall be deemed to be the Exchange.
Additional Disruption Events:
(a) Change in Law:	Applicable; provided that Section 12.9(a)(ii) of the Equity Definitions is hereby amended by (i) replacing the phrase “the interpretation” in the third line thereof with the phrase “, or public announcement of, the formal or informal interpretation”; provided further that Section 12.9(a)(ii) of the Equity Definitions is hereby amended by replacing the parenthetical beginning after the word “regulation” in the second line thereof with the words “(including, for the avoidance of doubt and without limitation, (x) any tax law or (y) adoption or promulgation of new regulations authorized or mandated by existing statute)”.  Notwithstanding the Equity Definitions, the consequence of an occurrence of a Change in Law under clause (y) thereof shall be as set forth under 12.9(b)(vi) of the Equity Definitions.
(b) Failure to Deliver:	Applicable
(c) Insolvency Filing:	Applicable
(d) Loss of Stock Borrow:	Applicable

© 2016 Corning Incorporated. All Rights Reserved.

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		Maximum Stock Loan Rate:	For each Transaction, as set forth in the related Supplemental Confirmation.
		Hedging Party:	Dealer
		Determining Party:	Dealer
		(e) Increased Cost of Stock Borrow:	Applicable
		Initial Stock Loan Rate:	For each Transaction, as set forth in the related Supplemental Confirmation.
		Hedging Party:	Dealer
		Determining Party:	Dealer
		Hedging Adjustments:	For the avoidance of doubt, whenever the Calculation Agent is called upon to make an adjustment pursuant to the terms of this Confirmation or the Equity Definitions to take into account the effect of an event, the Calculation Agent shall make such adjustment by reference to the effect of such event on Dealer, assuming that Dealer maintains a commercially reasonable Hedge Position.
		Non-Reliance/Agreements and Acknowledgements Regarding Hedging Activities/Additional Acknowledgements:	Applicable
2.	Calculation Agent.		Dealer; In addition, if at any time an Event of Default occurs or exists with respect to Dealer ,then Counterparty will appoint a third party independent dealer in the relevant market to act as Calculation Agent.  For the avoidance of doubt, all calculations and determinations of the Calculation Agent shall be done in a commercially reasonable manner.  Following any determination or calculation by the Calculation Agent hereunder, upon a written request by Counterparty, the Calculation Agent will promptly (but in any event no later than five (5) Exchange Business Days following receipt of such written request by Dealer) provide to Counterparty by e-mail to the e-mail address provided by Counterparty in such written request a report (in a commonly used file format for the storage and manipulation of financial data) displaying in reasonable detail the basis for such determination or calculation, as the case may be, it being understood that the Calculation Agent shall not be obligated to disclose any proprietary or confidential models or any other confidential or proprietary information, in each case, used by it for such determination or calculation.

© 2016 Corning Incorporated. All Rights Reserved.

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3.	Account Details.
	(a)	Account for payments to Counterparty:
		Bank:	JPMorgan Chase Bank, NA
		ABA#:	021000021
		Acct No.:	XXXXX6911
		Beneficiary:	Corning Incorporated
		Account for delivery of Shares to Counterparty:
		DTC 50108
	(b)	Account for payments to Dealer:
		To be provided separately
		Account for delivery of Shares to Dealer:
		To be provided separately
4.	Offices.
	(a)	The Office of Counterparty for each Transaction is:  Inapplicable, Counterparty is not a Multibranch Party.
	(b)	The Office of Dealer for each Transaction is: London
5.	Notices.
	(a)	Address for notices or communications to Counterparty:
		Corning Incorporated
		Attention:	Stephen C. Propper
		Telephone No.:	607-248-4492
		Facsimile No.:	607-974-4375
		Email Address:	proppersc@corning.com
	(b)	Address for notices or communications to Dealer:
		Morgan Stanley & Co. LLC
		Attention:	David Oakes
		Telephone No.:	+1-212-761-5319
		Email Address:	david.oakes@morganstanley.com
		With a copy to:
		Morgan Stanley & Co. LLC
		Attention:	Steven Seltzer
		Telephone No.:	+1-212-761-1719
		Facsimile:	+1-212-507-1554
		Email Address:	steven.seltzer1@morganstanley.com

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6.	Representations, Warranties and Agreements.
	(a)	Additional Representations, Warranties and Covenants of Each Party.  In addition to the representations, warranties and covenants in the Agreement, each party represents, warrants and covenants to the other party that:
		(i)	It is an “eligible contract participant” (as such term is defined in the Commodity Exchange Act, as amended).
		(ii)	Each party acknowledges that the offer and sale of each Transaction to it is intended to be exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”), by virtue of Section 4(2) thereof.  Accordingly, each party represents and warrants to the other that (A) it has the financial ability to bear the economic risk of its investment in each Transaction and is able to bear a total loss of its investment, (B) it is an “accredited investor” as that term is defined under Regulation D under the Securities Act and (C) the disposition of each Transaction is restricted under this Master Confirmation, the Securities Act and state securities laws.
	(b)	Additional Representations, Warranties and Covenants of Counterparty.  In addition to the representations, warranties and covenants in the Agreement, Counterparty represents, warrants and covenants to Dealer that:
		(i)	As of the Trade Date for each Transaction hereunder, (A) such Transaction is being entered into pursuant to a publicly disclosed Share buy-back program and its Board of Directors has approved the use of derivatives to effect the Share buy-back program, and (B) there is no internal policy of Counterparty, whether written or oral, that would prohibit Counterparty from entering into any aspect of such Transaction, including, without limitation, the purchases of Shares to be made pursuant to such Transaction.
		(ii)	As of the Trade Date for each Transaction hereunder, the purchase or writing of such Transaction and the transactions contemplated hereby will not violate Rule 13e-1 or Rule 13e-4 under the Exchange Act.
		(iii)	As of the Trade Date for each Transaction hereunder, it is not entering into such Transaction, in each case (A) on the basis of, and is not aware of, any material non-public information regarding Counterparty or the Shares, (B) in anticipation of, in connection with, or to facilitate, a distribution of its securities, a self tender offer or a third-party tender offer in violation of the Exchange Act or (C) to create actual or apparent trading activity in the Shares (or any security convertible into or exchangeable for the Shares) or to raise or depress or otherwise manipulate the price of the Shares (or any security convertible into or exchangeable for the Shares).
		(iv)	Counterparty (A) is capable of evaluating investment risks independently, both in general and with regard to all transactions and investment strategies involving a security or securities; (B) will exercise independent judgment in evaluating the recommendations of any broker-dealer or its associated persons, unless it has otherwise notified the broker-dealer in writing; and (C) has total assets of at least USD 50,000,000 as of the date hereof.

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(v)	As of the Trade Date for each Transaction hereunder, Counterparty is in compliance in all material respects with its reporting obligations under the Exchange Act and its most recent Annual Report on Form 10-K, together with all reports filed by it through the Trade Date pursuant to the Exchange Act, taken together and as amended and supplemented to the date of this representation, do not, as of their respective filing dates, contain any untrue statement of a material fact or omit to state any 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.
(vii)	The Shares are not, and Counterparty will not cause the Shares to be, subject to a “restricted period” (as defined in Regulation M promulgated under the Exchange Act) at any time during any Regulation M Period (as defined below) for any Transaction unless Counterparty has provided written notice to Dealer of such restricted period not later than the Scheduled Trading Day immediately preceding the first day of such “restricted period”; Counterparty acknowledges that any such notice may cause a Disrupted Day to occur pursuant to Section 7 below; accordingly, Counterparty acknowledges that its delivery of such notice must comply with the standards set forth in Section 8 below.  Counterparty is not currently contemplating any “distribution” (as defined in Regulation M promulgated under the Exchange Act) of Shares, or any security for which Shares are a “reference security” (as defined in Regulation M promulgated under the Exchange Act).  “Regulation M Period” means, for any Transaction, (A) the Relevant Period (as defined below) for such Transaction, (B) the Settlement Valuation Period, if any, for such Transaction and (C) the Seller Termination Purchase Period (as defined below), if any, for such Transaction.  “Relevant Period” means, for any Transaction, the period commencing on the Calculation Period Start Date for such Transaction and ending on the later of (1) the earlier of (x) the Scheduled Termination Date and (y) the last Additional Relevant Day (as specified in the related Supplemental Confirmation) for such Transaction, or such earlier day as elected by Dealer and communicated to Counterparty on such day (or, if later, the First Acceleration Date without regard to any acceleration thereof pursuant to “Special Provisions for Acquisition Transaction Announcements” below) and (2) if Section 14 is applicable to such Transaction, the date on which all deliveries owed pursuant to Section 14 have been made.
(viii)	As of the Trade Date, the Prepayment Date, the Initial Share Delivery Date, the Settlement Date, any Cash Settlement Payment Date and any Settlement Method Election Date for each Transaction, Counterparty is not “insolvent” (as such term is defined under Section 101(32) of the U.S.  Bankruptcy Code (Title 11 of the United States Code) (the “Bankruptcy Code”)) and Counterparty would be able to purchase a number of Shares with a value equal to the Prepayment Amount in compliance with the laws of the jurisdiction of Counterparty’s incorporation.
(ix)	Counterparty is not, and after giving effect to each Transaction will not be, required to register as an “investment company” as such term is defined in the Investment Company Act of 1940, as amended.

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		(x)	Counterparty has not entered, and will not enter, into any repurchase transaction with respect to the Shares (or any security convertible into or exchangeable for the Shares) (including, without limitation, any agreements similar to the Transactions described herein), except with Dealer or any of its affiliates, where any initial hedge period, calculation period, relevant period, settlement valuation period or seller termination purchase period (each however defined) in such other transaction will overlap at any time (including, without limitation, as a result of extensions in such initial hedge period, calculation period, relevant period, settlement valuation period or seller termination purchase period as provided in the relevant agreements) with any Relevant Period, any Settlement Valuation Period (if applicable) or any Seller Termination Purchase Period (if applicable) under this Master Confirmation.  In the event that the initial hedge period, relevant period, calculation period or settlement valuation period in any other transaction overlaps with any Relevant Period, any Settlement Valuation Period (if applicable) or any Seller Termination Purchase Period (if applicable) under this Master Confirmation as a result of any postponement of the Scheduled Termination Date or extension of the Settlement Valuation Period pursuant to “Valuation Disruption” above or any analogous provision in such other transaction, Counterparty shall promptly amend such other transaction to avoid any such overlap.
		(xi)	Counterparty shall, at least one day prior to the first day of the Calculation Period, the Settlement Valuation Period, if any, or the Seller Termination Purchase Period, if any, for any Transaction, notify Dealer of the total number of Shares purchased in Rule 10b-18 purchases of blocks pursuant to the once-a-week block exception set forth in paragraph (b)(4) of Rule 10b-18 under the Exchange Act (“Rule 10b-18”) by or for Counterparty or any of its “affiliated purchasers” (as defined in Rule 10b-18) during each of the four calendar weeks preceding such day and during the calendar week in which such day occurs (“Rule 10b-18 purchase” and “blocks” each being used as defined in Rule 10b-18), which notice shall be substantially in the form set forth in Schedule B hereto.
		(xii)	As of the Trade Date for each Transaction hereunder, and as of the date of any election with respect to any Transaction hereunder, there has not been any Merger Announcement (as defined below).
	(c)	Additional Representations, Warranties and Covenants of Dealer.  In addition to the representations, warranties and covenants in the Agreement, Dealer represents, warrants and covenants to Counterparty that it has implemented policies and procedures, taking into consideration the nature of its business, reasonably designed to ensure that individuals making investment decisions related to any Transaction would not violate the laws prohibiting trading on the basis of material nonpublic information regarding Issuer.
7.	Regulatory Disruption.  In the event that Dealer concludes, in its good faith and commercially reasonable discretion based on the advice of counsel that it is necessary with respect to any legal, regulatory or self-regulatory requirements or related policies and procedures (whether or not such requirements, policies or procedures are imposed by law or have been voluntarily adopted by Dealer, and provided that such policies or procedures are related to legal or regulatory issues and are generally applicable in similar situations and applied to any Transaction hereunder in a non-discriminatory manner), for it to refrain from or decrease any market activity on any Scheduled Trading Day or Days during the Calculation Period or, if applicable, the Settlement Valuation Period, Dealer may by written notice to Counterparty elect to deem that a Market Disruption Event has occurred and will be continuing on such Scheduled Trading Day or Days.

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8.	Other Provisions
	(a)	Rule 10b-18:
		(i)	Dealer covenants and agrees to use commercially reasonable efforts, during the Calculation Period and any Settlement Valuation Period (as defined in Annex A) for any Transaction, to make all purchases of Shares in connection with such Transaction in a manner that would comply with the limitations set forth in clauses (b)(1), (b)(2), (b)(3) and (b)(4) and (c) of Rule 10b-18, as if such rule were applicable to such purchases and taking into account any applicable Securities and Exchange Commission no-action letters as appropriate, and subject to any delays between the execution and reporting of a trade of the Shares on the Exchange and other circumstances beyond Dealer’s control; provided that, during the Calculation Period, the foregoing agreement shall not apply to purchases made to dynamically hedge for Dealer’s own account or the account of its affiliate(s) the optionality arising under a Transaction (including, for the avoidance of doubt, timing optionality); provided further that, without limiting the generality of the first sentence of this Section 6(c)(i), Dealer shall not be responsible for any failure to comply with Rule 10b-18(b)(3) to the extent any transaction that was executed (or deemed to be executed) by or on behalf of Counterparty or an “affiliated purchaser” (as defined under Rule 10b-18) pursuant to a separate agreement is not deemed to be an “independent bid” or an “independent transaction” for purposes of Rule 10b-18(b)(3).
		(ii)	Except as disclosed to Dealer in writing prior to the Trade Date, Counterparty represents and warrants to Dealer that it has not made any purchases of blocks by or for itself or any of its "affiliated purchasers" pursuant to the one block purchase per week exception in Rule 10b-18(b)(4) under the Exchange Act during each of the four calendar weeks preceding such date ("Rule 10b-18 purchase," "blocks" and "affiliated purchaser", each as defined in Rule 10b-18).
	(b)	10b5-1 Plan:
		(i)	Counterparty is entering into this Master Confirmation and each Transaction hereunder in good faith and not as part of a plan or scheme to evade the prohibitions of Rule 10b5-1 under the Exchange Act (“Rule 10b5-1”) or any other antifraud or anti-manipulation provisions of the federal or applicable state securities laws and that it has not entered into or altered and will not enter into or alter any corresponding or hedging transaction or position with respect to the Shares.  Counterparty acknowledges that it is the intent of the parties that each Transaction entered into under this Master Confirmation comply with the requirements of paragraphs (c)(1)(i)(A) and (B) of Rule 10b5-1 and each Transaction entered into under this Master Confirmation shall be interpreted to comply with the requirements of Rule 10b5-1(c).
		(ii)	During the Calculation Period and the Settlement Valuation Period, if any, for any Transaction and in connection with the delivery of any Alternative Delivery Units for any Transaction, Dealer (or its agent or Affiliate) may effect transactions in Shares in connection with such Transaction.  The timing of such transactions by Dealer, the price paid or received per Share pursuant to such transactions and the manner in which such transactions are made, including, without limitation, whether such transactions are made on any securities exchange or privately, shall be within the sole judgment of Dealer.  Counterparty acknowledges and agrees that all such transactions shall be made in Dealer’s sole judgment and for Dealer’s own account.

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		(iii)	Counterparty represents that it does not have, and shall not attempt to exercise, any control or influence over how, when or whether Dealer (or its agent or Affiliate) makes any “purchases or sales” (within the meaning of Rule 10b5-1(c)(1)(i)(B)(3)) in connection with any Transaction, including, without limitation, over how, when or whether Dealer (or its agent or Affiliate) enters into any hedging transactions.  Counterparty represents and warrants that it has consulted with its own advisors as to the legal aspects of its adoption and implementation of this Master Confirmation and each Supplemental Confirmation under Rule 10b5-1.
		(iv)	Counterparty acknowledges and agrees that any amendment, modification, waiver or termination of this Master Confirmation or any Supplemental Confirmation must be effected in accordance with the requirements for the amendment or termination of a “plan” as defined in Rule 10b5-1(c).  Without limiting the generality of the foregoing, any such amendment, modification, waiver or termination shall be made in good faith and not as part of a plan or scheme to evade the prohibitions of Rule 10b-5, and no such amendment, modification or waiver shall be made at any time at which Counterparty or any officer, director, manager or similar person of Counterparty is aware of any material non-public information regarding Counterparty or the Shares.
		(v)	Counterparty shall not, directly or indirectly, communicate any information relating to the Shares or any Transaction (including, without limitation, any notices required by Section 10(a)) to any employee of Dealer, other than as set forth in written procedures provided by Dealer to Counterparty.
9.	Counterparty Purchases.  Counterparty (or any “affiliate” or “affiliated purchaser” as defined in Rule 10b-18) shall not, without the prior written consent of Dealer (which written consent shall not be unreasonably withheld or delayed, but it being understood that Dealer may withhold such consent if it determines that such request would adversely impact Dealer’s trading activity in respect of any Transaction), directly or indirectly purchase any Shares (including by means of a derivative instrument), listed contracts on the Shares or securities that are convertible into, or exchangeable or exercisable for Shares (including, without limitation, any Rule 10b-18 purchases of blocks (as defined in Rule 10b-18)) during any Relevant Period, any Settlement Valuation Period (if applicable) or any Seller Termination Purchase Period (if applicable) provided that this Section 9 shall not apply to any of the following: (A) purchases of Shares pursuant to exercises of stock options granted to former or current employees, officers, directors, or other affiliates of Counterparty, including the withholding and/or purchase of Shares from holders of such options to satisfy payment of the option exercise price and/or satisfy tax withholding requirements in connection with the exercise of such options; (B) purchases of Shares from holders of performance shares or units or restricted shares or units to satisfy tax withholding requirements in connection with vesting; (C) the conversion or exchange by holders of any convertible or exchangeable securities of the Counterparty previously issued; (D) purchases of Shares effected by or for a plan by an agent independent of Counterparty that satisfy the requirements of Rule 10b-18(a)(13)(ii); (E) purchases which are not solicited by or on behalf of Counterparty, its “affiliates” or “affiliated purchasers” (each as defined in Rule 10b-18) and are not reasonably expected to result in purchases of Shares in the market; (F) purchases of Preferred Stock; (G) purchases executed by or through Dealer or an Affiliate of Dealer and, if Dealer is requested to make any such purchases, Dealer will endeavor in good faith and in a commercially reasonable manner to fulfill such request, taking into account such factors as it deems appropriate at such time in light of this Transaction and existing liquidity conditions at such time.

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10.	Special Provisions for Merger Transactions.  Notwithstanding anything to the contrary herein or in the Equity Definitions:
	(a)	Counterparty agrees that it:
		(i)	will not during the period commencing on the Trade Date for any Transaction and ending on the last day of the Relevant Period or, if applicable, the later of the last day of the Settlement Valuation Period and the last day of the Seller Termination Purchase Period, for such Transaction make, or to the extent it is within its reasonable control, permit to be made, any public announcement (as defined in Rule 165(f) under the Securities Act) of any Merger Transaction or potential Merger Transaction (a “Merger Announcement”) unless such Merger Announcement is made prior to the opening or after the close of the regular trading session on the Exchange for the Shares;
		(ii)	shall promptly (but in any event prior to the next opening of the regular trading session on the Exchange) notify Dealer following any such Merger Announcement that such Merger Announcement has been made; and
		(iii)	shall promptly (but in any event prior to the next opening of the regular trading session on the Exchange) provide Dealer with written notice specifying (i) Counterparty’s average daily Rule 10b-18 Purchases (as defined in Rule 10b-18) during the three full calendar months immediately preceding the announcement date of any Merger Transaction or potential Merger Transaction that were not effected through Dealer or its Affiliates and (ii) the number of Shares purchased pursuant to the proviso in Rule 10b-18(b)(4) under the Exchange Act for the three full calendar months preceding the announcement date of any Merger Transaction or potential Merger Transaction.  Such written notice shall be deemed to be a certification by Counterparty to Dealer that such information is true and correct.  In addition, Counterparty shall promptly notify Dealer of the earlier to occur of the completion of such transaction and the completion of the vote by target shareholders.
	(b)	Counterparty acknowledges that any such Merger Announcement or delivery of a notice with respect thereto may cause the terms of any Transaction to be adjusted or such Transaction to be terminated; accordingly, Counterparty acknowledges that its delivery of such notice must comply with the standards set forth in Section 8 above.
	(c)	Upon the occurrence of any Merger Announcement (whether made by Counterparty or a third party), Dealer in its sole discretion may (i) make commercially reasonable adjustments to the terms of any Transaction including, without limitation, the Scheduled Termination Date or the Forward Price Adjustment Amount, and/or suspend the Calculation Period and/or any Settlement Valuation Period or (ii) treat the occurrence of such Merger Announcement as an Additional Termination Event with Counterparty as the sole Affected Party and the Transactions hereunder as the Affected Transactions and with the amount under Section 6(e) of the Agreement determined taking into account the fact that the Calculation Period or Settlement Valuation Period, as the case may be, had fewer Scheduled Trading Days than originally anticipated.
	“Merger Transaction” means any merger, acquisition or similar transaction involving a recapitalization as contemplated by Rule 10b-18(a)(13)(iv) under the Exchange Act, other than, solely for purposes of this Section 10, any such transaction in which the consideration consists solely of cash and there is no valuation period.

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11.	Special Provisions for Acquisition Transaction Announcements.  Notwithstanding anything to the contrary herein or in the Equity Definitions:
	(a)	If an Acquisition Transaction Announcement occurs on or prior to the Settlement Date for any Transaction, then the Calculation Agent shall make such adjustments to the exercise, settlement, payment or any of the other terms of such Transaction as the Calculation Agent determines reasonably commercially appropriate (including, without limitation and for the avoidance of doubt, adjustments that would allow the Number of Shares to be Delivered to be less than zero), at such time or at multiple times as the Calculation Agent determines to be commercially reasonably appropriate, to account for the economic effect of such Acquisition Transaction Announcement on such Transaction (including adjustments to account for changes in volatility, expected dividends, stock loan rate, value of any commercially reasonable Hedge Positions in connection with the Transaction and liquidity relevant to the Shares or to such Transaction).  If an Acquisition Transaction Announcement occurs after the Trade Date, but prior to the First Acceleration Date of any Transaction, the First Acceleration Date shall be the date of such Acquisition Transaction Announcement.  If the Number of Shares to be Delivered for any settlement of any Transaction is a negative number, then the terms of the Counterparty Settlement Provisions in Annex A hereto shall apply.
	(b)	“Acquisition Transaction Announcement” means (i) the announcement of an Acquisition Transaction or an event that, if consummated, would result in an Acquisition Transaction, (ii) an announcement that Counterparty or any of its subsidiaries has entered into an agreement, a letter of intent or an understanding designed to result in an Acquisition Transaction, (iii) the announcement of the intention to solicit or enter into, or to explore strategic alternatives or other similar undertaking that may include, an Acquisition Transaction, (iv) any other announcement that in the reasonable judgment of the Calculation Agent is reasonably likely to result in an Acquisition Transaction, or (v) any announcement of any change or amendment to any previous Acquisition Transaction Announcement (including any announcement of the abandonment of any such previously announced Acquisition Transaction, agreement, letter of intent, understanding or intention).  For the avoidance of doubt, announcements as used in the definition of Acquisition Transaction Announcement refer to any public announcement whether made by the Issuer or a third party.
	(c)	“Acquisition Transaction” means (i) any Merger Event (for purposes of this definition the definition of Merger Event shall be read with the references therein to “100%” being replaced by “25%” and references to “50%” being replaced by “75%” and without reference to the clause beginning immediately following the definition of Reverse Merger therein to the end of such definition), Tender Offer or Merger Transaction or any other transaction involving the merger of Counterparty with or into any third party, (ii) the sale or transfer of all or substantially all of the assets of Counterparty, (iii) a recapitalization, reclassification, binding share exchange or other similar transaction with respect to Counterparty, (iv) any acquisition by Counterparty or any of its subsidiaries where the aggregate consideration transferable by Counterparty or its subsidiaries exceeds 25% of the market capitalization of Counterparty, (v) any lease, exchange, transfer, disposition (including, without limitation, by way of spin-off or distribution) of assets (including, without limitation, any capital stock or other ownership interests in subsidiaries) or other similar event by Counterparty or any of its subsidiaries where the aggregate consideration transferable or receivable by or to Counterparty or its subsidiaries exceeds 25% of the market capitalization of Counterparty or (vi) any transaction in which Counterparty or its board of directors has a legal obligation to make a recommendation to its shareholders in respect of such transaction (whether pursuant to Rule 14e-2 under the Exchange Act or otherwise).

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12.	Acknowledgments.
	(a)	The parties hereto intend for:
		(i)	each Transaction to be a “securities contract” as defined in Section 741(7) of the Bankruptcy Code and a “forward contract” as defined in Section 101(25) of the Bankruptcy Code, and the parties hereto to be entitled to the protections afforded by, among other Sections, Sections 362(b)(6), 362(b)(27), 362(o), 546(e), 546(j), 555, 556, 560 and 561 of the Bankruptcy Code;
		(ii)	the Agreement to be a “master netting agreement” as defined in Section 101(38A) of the Bankruptcy Code;
		(iii)	a party’s right to liquidate, terminate or accelerate any Transaction, net out or offset termination values or payment amounts, and to exercise any other remedies upon the occurrence of any Event of Default or Termination Event under the Agreement with respect to the other party or any Extraordinary Event that results in the termination or cancellation of any Transaction to constitute a “contractual right” (as defined in the Bankruptcy Code); and
		(iv)	all payments for, under or in connection with each Transaction, all payments for the Shares (including, for the avoidance of doubt, payment of the Prepayment Amount) and the transfer of such Shares to constitute “settlement payments” and “transfers” (as defined in the Bankruptcy Code).
	(b)	Counterparty acknowledges that:
		(i)	during the term of any Transaction, Dealer and its Affiliates may buy or sell Shares or other securities or buy or sell options or futures contracts or enter into swaps or other derivative securities in order to establish, adjust or unwind its hedge position with respect to such Transaction;
		(ii)	Dealer and its Affiliates may also be active in the market for the Shares and Share-linked transactions other than in connection with hedging activities in relation to any Transaction;
		(iii)	Dealer shall make its own determination as to whether, when or in what manner any hedging or market activities in Counterparty’s securities shall be conducted and shall do so in a manner that it deems appropriate to hedge its price and market risk with respect to the Forward Price and the VWAP Price;
		(iv)	any market activities of Dealer and its Affiliates with respect to the Shares may affect the market price and volatility of the Shares, as well as the Forward Price and VWAP Price, each in a manner that may be adverse to Counterparty; and
		(v)	each Transaction is a derivatives transaction in which it has granted Dealer an option; Dealer may purchase shares for its own account at an average price that may be greater than, or less than, the price paid by Counterparty under the terms of the related Transaction.

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13.

No Collateral, Netting or Setoff.  Notwithstanding any provision of the Agreement or any other agreement between the parties to the contrary, the obligations of Counterparty hereunder are not secured by any collateral.  Obligations under any Transaction shall not be netted, recouped or set off (including pursuant to Section 6 of the Agreement) against any other obligations of the parties, whether arising under the Agreement, this Master Confirmation or any Supplemental Confirmation, or under any other agreement between the parties hereto, by operation of law or otherwise, and no other obligations of the parties shall be netted, recouped or set off (including pursuant to Section 6 of the Agreement) against obligations under any Transaction, whether arising under the Agreement, this Master Confirmation or any Supplemental Confirmation, or under any other agreement between the parties hereto, by operation of law or otherwise, and each party hereby waives any such right of setoff, netting or recoupment.

14.

Alternative Termination Settlement.  In the event that (a) an Early Termination Date (whether as a result of an Event of Default or a Termination Event) occurs or is designated with respect to any Transaction or (b) any Transaction is cancelled or terminated upon the occurrence of an Extraordinary Event (except as a result of (i) a Nationalization, Insolvency or Merger Event in which the consideration to be paid to holders of Shares consists solely of cash, (ii) a Merger Event or Tender Offer that is within Counterparty’s control, or (iii) an Event of Default in which Counterparty is the Defaulting Party or a Termination Event in which Counterparty is the Affected Party other than an Event of Default of the type described in Section 5(a)(iii), (v), (vi), (vii) or (viii) of the Agreement or a Termination Event of the type described in Section 5(b) of the Agreement, in each case that resulted from an event or events outside Counterparty’s control), if either party would owe any amount to the other party pursuant to Section 6(d)(ii) of the Agreement or any Cancellation Amount pursuant to Article 12 of the Equity Definitions (any such amount, a “Payment Amount”), then, in lieu of any payment of such Payment Amount, unless Counterparty makes an election to the contrary no later than the Early Termination Date or the date on which such Transaction is terminated or cancelled, Counterparty or Dealer, as the case may be, shall deliver to the other party a number of Shares (or, in the case of a Nationalization, Insolvency or Merger Event, a number of units, each comprising the number or amount of the securities or property that a hypothetical holder of one Share would receive in such Nationalization, Insolvency or Merger Event, as the case may be (each such unit, an “Alternative Delivery Unit”) with a value equal to the Payment Amount, as determined by the Calculation Agent over a commercially reasonable period of time (and the parties agree that, in making such determination of value, the Calculation Agent may take into account a number of factors, including, without limitation, the market price of the Shares or Alternative Delivery Units on the Early Termination Date or the date of early cancellation or termination, as the case may be, and, if such delivery is made by Dealer, the prices at which Dealer purchases Shares or Alternative Delivery Units to fulfill its delivery obligations under this Section 14); provided that in determining the composition of any Alternative Delivery Unit, if the relevant Nationalization, Insolvency or Merger Event involves a choice of consideration to be received by holders, such holder shall be deemed to have elected to receive the maximum possible amount of cash; and provided further that Counterparty may elect that the provisions of this Section 14 above providing for the delivery of Shares or Alternative Delivery Units, as the case may be, shall not apply only if Counterparty represents and warrants to Dealer, in writing on the date it notifies Dealer of such election, that, as of such date, Counterparty is not aware of any material non-public information regarding Counterparty or the Shares and is making such election in good faith and not as part of a plan or scheme to evade compliance with the federal securities laws.  If delivery of Shares or Alternative Delivery Units, as the case may be, pursuant to this Section 14 is to be made by Counterparty, paragraphs 2 through 7 of Annex A hereto shall apply as if (A) such delivery were a settlement of such Transaction to which Net Share Settlement applied, (B) the Cash Settlement Payment Date were the Early Termination Date or the date of early cancellation or termination, as the case may be, and (C) the Forward Cash Settlement Amount were equal to (x) zero minus (y) the Payment Amount owed by Counterparty.  For the avoidance of doubt, if Counterparty validly elects for the provisions of this Section 14 relating to the delivery of Shares or Alternative Delivery Units, as the case may be, not to apply to any Payment Amount, the provisions of Article 12 of the Equity Definitions, or the provisions of Section 6(d)(ii) of the Agreement, as the case may be, shall apply.  If delivery of Shares or Alternative Delivery Units, as the case may be, is to be made by Dealer pursuant to this Section 14, the period during which Dealer purchases Shares or Alternative Delivery Units to fulfill its delivery obligations under this Section 14 shall be referred to as the “Seller Termination Purchase Period”.

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15.	Calculations and Payment Date upon Early Termination.  The parties acknowledge and agree that in calculating (a) the Close-Out Amount pursuant to Section 6 of the Agreement and (b) the amount due upon cancellation or termination of any Transaction (whether in whole or in part) pursuant to Article 12 of the Equity Definitions as a result of an Extraordinary Event, Dealer may (but need not) determine such amount based on (i) expected losses assuming a commercially reasonable (including, without limitation, with regard to reasonable legal and regulatory guidelines) risk bid were used to determine loss or (ii) the price at which one or more market participants would offer to sell to the Seller a block of shares of Common Stock equal in number to the Seller’s hedge position in relation to the Transaction.  Notwithstanding anything to the contrary in Section 6(d)(ii) of the Agreement or Article 12 of the Equity Definitions, all amounts calculated as being due in respect of an Early Termination Date under Section 6(e) of the Agreement or upon cancellation or termination of the relevant Transaction under Article 12 of the Equity Definitions will be payable on the day that notice of the amount payable is effective; provided that if Counterparty elects to receive or deliver Shares or Alternative Delivery Units in accordance with Section 14, such Shares or Alternative Delivery Units shall be delivered on a date selected by Dealer as promptly as practicable.
16.	Limit on Beneficial Ownership.  Notwithstanding any other provisions hereof, Dealer may not be entitled to take delivery of any Shares deliverable hereunder to the extent (but only to the extent) that, after such receipt of any Shares hereunder, the Equity Percentage would exceed 8%.  Any purported delivery hereunder shall be void and have no effect to the extent (but only to the extent) that, after such delivery the Equity Percentage would exceed 8%. If any delivery owed to Dealer hereunder is not made, in whole or in part, as a result of this provision, Counterparty’s obligation to make such delivery shall not be extinguished and Counterparty shall make such delivery as promptly as practicable after, but in no event later than one Business Day after, Dealer gives notice to Counterparty that, after such delivery, the Equity Percentage would not exceed 8%.  The “Equity Percentage” as of any day is the fraction, expressed as a percentage, (A) the numerator of which is the number of Shares that Dealer and any of its affiliates or any other person subject to aggregation with Dealer for purposes of the “beneficial ownership” test under Section 13 of the Exchange Act, or any “group” (within the meaning of Section 13) of which Dealer is or may be deemed to be a part beneficially owns (within the meaning of Section 13 of the Exchange Act), without duplication, on such day (or, to the extent that for any reason the equivalent calculation under Section 16 of the Exchange Act and the rules and regulations thereunder results in a higher number, such higher number) and (B) the denominator of which is the number of Shares outstanding on such day.
17.	Maximum Share Delivery.  Notwithstanding anything to the contrary in this Master Confirmation, in no event shall Dealer be required to deliver any Shares, or any Shares or other securities comprising Alternative Delivery Units, in respect of any Transaction in excess of the Maximum Number of Shares set forth in the Supplemental Confirmation for such Transaction, as such number may be proportionately adjusted by the Calculation Agent to reflect stock splits or similar events.
18.	Additional Termination Events.
	(a)	Notwithstanding anything to the contrary in Section 6 of the Agreement, if a Termination Price is specified in the Supplemental Confirmation for any Transaction, then an Additional Termination Event will occur without any notice or action by Dealer or Counterparty if the closing price of the Shares on the Exchange for any two consecutive Exchange Business Days falls below such Termination Price and for the purposes of the Agreement, such second consecutive Exchange Business Day will be the “Early Termination Date”
19.	Non-confidentiality.  Notwithstanding any provision in this Master Confirmation to the contrary, in connection with Section 1.6011-4 of the Treasury Regulations, the parties hereby agree that each party (and each employee, representative, or other agent of such party) may disclose to any and all persons, without limitation of any kind, the U.S. tax treatment and U.S. tax structure of any Transaction and all materials of any kind (including opinions or other tax analyses) that are provided to such party relating to such U.S. tax treatment and U.S. tax structure, other than any information for which nondisclosure is reasonably necessary in order to comply with applicable securities laws.

© 2016 Corning Incorporated. All Rights Reserved.

20

20.	Counterparty Indemnification.  Counterparty agrees to indemnify and hold harmless Dealer and its officers, directors, employees, Affiliates, advisors, agents and controlling persons (each, an “Indemnified Person”) from and against any and all losses, claims, damages and liabilities, joint or several (collectively, “Obligations”), to which an Indemnified Person may become subject arising out of or attributable to: (a) any breach by Counterparty of its obligations under this Master Confirmation; (b) the incorrectness or inaccuracy of any of Counterparty’s representations or warranties; or (c) any violation by Counterparty of applicable laws or regulations relating to this Master Confirmation or any Transaction, or any claim, litigation, investigation or proceeding relating thereto, regardless of whether any of such Indemnified Person is a party thereto, and to reimburse, upon written request, each such Indemnified Person for any reasonable legal or other expenses incurred in connection with investigating, preparation for, providing evidence for or defending any of the foregoing; provided, however, that Counterparty shall not have any liability to any Indemnified Person to the extent that such Obligations (a) are finally determined by a court of competent jurisdiction to have resulted from the gross negligence, bad faith, breach of agreement or willful misconduct of such Indemnified Person (and in such case, such Indemnified Person shall promptly return to Counterparty any amounts previously expended by Counterparty hereunder) or (b) are trading losses incurred by Dealer as part of its purchases or sales of Shares pursuant to this Master Confirmation or any Supplemental Confirmation (unless such trading losses are a direct result of the breach of any agreement, term or covenant herein).
21.	Assignment and Transfer.  Notwithstanding anything to the contrary in the Agreement, Dealer may assign any of its rights or duties hereunder to any one or more of its Affiliates organized in the United States (or any State thereof) or in England whose obligations hereunder are guaranteed by Dealer without the prior written consent of Counterparty subject to (A) the following conditions:
	(i) Counterparty will not be required to pay to the transferee an amount in respect of an Indemnifiable Tax under Section 2(d)(i)(4) of the Agreement (except in respect of interest under Section 2(e), 6(d)(ii), or 6(e)) greater than the amount in respect of which Counterparty would have been required to pay to Dealer  in the absence of such transfer;
	(ii) Counterparty will not receive a payment from which an amount has been withheld or deducted, on account of a Tax under Section 2(d)(i) (except in respect of interest under Section 2(e), 6(d)(ii), or 6(e) of the Agreement), in excess of that which Dealer would have been required to so withhold or deduct in the absence of such transfer, unless the transferee would be required to make additional payments pursuant to Section 2(d)(i)(4) of the Agreement corresponding to such withholding or deduction;
	(iii) It is not unlawful for either party to perform any obligation under the Agreement or the Transaction as a result of such transfer; and
	(iv) An Extraordinary Event, Announcement Event, Potential Adjustment Event, Event of Default or Termination Event does not occur as a result of such transfer;
	Notwithstanding any other provision in this Master Confirmation to the contrary requiring or allowing Dealer to purchase, sell, receive or deliver any Shares or other securities to or from Counterparty, Dealer may designate any of its Affiliates to purchase, sell, receive or deliver such Shares or other securities and otherwise to perform Dealer’s obligations in respect of any Transaction and any such designee may assume such obligations.  Dealer may assign the right to receive Settlement Shares to any third party who may legally receive Settlement Shares.  Dealer shall be discharged of its obligations to Counterparty only to the extent of any such performance.  For the avoidance of doubt, Dealer hereby acknowledges that notwithstanding any such designation hereunder, to the extent any of Dealer’s obligations in respect of any Transaction are not completed by its designee, Dealer shall be obligated to continue to perform or to cause any other of its designees to perform in respect of such obligations.

© 2016 Corning Incorporated. All Rights Reserved.

21

22.	Amendments to the Equity Definitions.
	(a)	Section 11.2(e) of the Equity Definitions is hereby amended by deleting items (iii) and (v) in their entirety.
	(b)	Section 12.9(b)(iv) of the Equity Definitions is hereby amended by deleting (1) subsection (A) in its entirety, (2) the phrase “or (B)” following subsection (A) and (3) the phrase “in each case” in subsection (B); and replacing the phrase “neither the Non-Hedging Party nor the Lending Party lends Shares” with the phrase “such Lending Party does not lend Shares” in the penultimate sentence.
	(c)	Section 12.9(b)(v) of the Equity Definitions is hereby amended by adding the word “or” immediately before subsection “(B)” and deleting the comma at the end of subsection (A); and (1) deleting subsection (C) in its entirety, (2) deleting the word “or” immediately preceding subsection (C), (3) deleting the penultimate sentence in its entirety and replacing it with the sentence “The Hedging Party will determine the Cancellation Amount payable by one party to the other” and (4) deleting clause (X) in the final sentence.
23.	Extraordinary Dividend.If Counterparty declares any Extraordinary Dividend that has an ex-dividend date during the period commencing on the Trade Date for any Transaction and ending on the last day of the Relevant Period or, if applicable, the later of the last day of the Settlement Valuation Period and the last day of the Seller Termination Purchase Period, for such Transaction, then prior to or on the date on which such Extraordinary Dividend is paid by Counterparty to holders of record, Counterparty shall pay to Dealer, for each Transaction under this Master Confirmation, an amount in cash equal to the product of (i) the amount of such Extraordinary Dividend and (ii) the theoretical short delta number of shares as of the opening of business on the related ex-dividend date, as determined by the Calculation Agent, required for Dealer to hedge its exposure to such Transaction.
24.	Status of Claims in Bankruptcy.  Dealer acknowledges and agrees that neither this Master Confirmation nor any Supplemental Confirmation is intended to convey to Dealer rights against Counterparty with respect to any Transaction that are senior to the claims of common stockholders of Counterparty in any United States bankruptcy proceedings of Counterparty; provided that nothing herein shall limit or shall be deemed to limit Dealer’s right to pursue remedies in the event of a breach by Counterparty of its obligations and agreements with respect to any Transaction; provided further that nothing herein shall limit or shall be deemed to limit Dealer’s rights in respect of any transactions other than any Transaction.
25.	Wall Street Transparency and Accountability Act.In connection with Section 739 of the Wall Street Transparency and Accountability Act of 2010 (“WSTAA”), the parties hereby agree that neither the enactment of WSTAA or any regulation under the WSTAA, nor any requirement under WSTAA or an amendment made by WSTAA, nor any similar legal certainty provision in any legislation enacted, or rule or regulation promulgated, on or after the date of this Master Confirmation, shall limit or otherwise impair either party’s otherwise applicable rights to terminate, renegotiate, modify, amend or supplement any Supplemental Confirmation, this Master Confirmation or the Agreement, as applicable, arising from a termination event, force majeure, illegality, increased costs, regulatory change or similar event under any Supplemental Confirmation, this Master Confirmation, the Equity Definitions incorporated herein, or the Agreement (including, without limitation, rights arising from Change in Law, Loss of Stock Borrow, Increased Cost of Stock Borrow, or Illegality).

© 2016 Corning Incorporated. All Rights Reserved.

22

26.

Waiver of Jury Trial. EACH PARTY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING RELATING TO THE AGREEMENT, THIS MASTER CONFIRMATION, EACH SUPPLEMENTAL CONFIRMATION, THE TRANSACTIONS HEREUNDER AND ALL MATTERS ARISING IN CONNECTION WITH THE AGREEMENT, THIS MASTER CONFIRMATION AND ANY SUPPLEMENTAL CONFIRMATION AND THE TRANSACTIONS HEREUNDER.EACH PARTY (I) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF SUCH A SUIT, ACTION OR PROCEEDING, SEEK TO ENFORCE THE FOREGOING WAIVER AND (II) ACKNOWLEDGES THAT IT AND THE OTHER PARTY HAVE BEEN INDUCED TO ENTER INTO THE TRANSACTIONS, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS PROVIDED HEREIN.

27.

Counterparts.This Master Confirmation may be executed in any number of counterparts, all of which shall constitute one and the same instrument, and any party hereto may execute this Master Confirmation by signing and delivering one or more counterparts.

Please confirm that the foregoing correctly sets forth the terms of our agreement by executing this Master Confirmation and returning it to us.

Very truly yours,

MORGAN STANLEY & CO. LLC
By:	/s/ Chris Andrews
Authorized Signatory
Name:	Chris Andrews

Accepted and confirmed
as of the date first set
forth above:
CORNING INCORPORATED
By:	/s/ Mark S. Rogus
Senior Vice President and Treasurer
Name:	Mark S. Rogus

© 2016 Corning Incorporated. All Rights Reserved.

23

SCHEDULE A

FORM OF SUPPLEMENTAL CONFIRMATION

[_____]
			[_____], 201[6]
To:	Corning Incorporated
	[_______________]
	[_______________]
	Attention:	[Title of contact]
	Telephone No.:	[____________]
	Facsimile No.:	[____________]

Re:           Supplemental Confirmation—Uncollared Accelerated Share Repurchase

The purpose of this Supplemental Confirmation is to confirm the terms and conditions of the Transaction entered into between [_____] (“Dealer”), and Corning Incorporated, a New York corporation (“Counterparty”) on the Trade Date specified below.  This Supplemental Confirmation is a binding contract between Dealer and Counterparty as of the relevant Trade Date for the Transaction referenced below.

1.           This Supplemental Confirmation supplements, forms part of, and is subject to the Master Confirmation, dated as of [  ] (the “Master Confirmation”), between Dealer and Counterparty, as amended and supplemented from time to time.  All provisions contained in the Master Confirmation govern this Supplemental Confirmation except as expressly modified below.

2.           The terms of the Transaction to which this Supplemental Confirmation relates are as follows:

Trade Date:	[__________], 2015
Forward Price Adjustment Amount:	USD [___]
Calculation Period Start Date:	The [__]th Scheduled Trading Day immediately following the Trade Date.
Scheduled Termination Date:	[     ]
First Acceleration Date:	[     ].
Prepayment Amount:	USD [___]
Prepayment Date:	[__________], 2015

© 2016 Corning Incorporated. All Rights Reserved.

A-1

Initial Shares:	[___] Shares; provided that if, in connection with the Transaction, Dealer is unable, after using commercially reasonable efforts, to borrow or otherwise acquire a number of Shares equal to the Initial Shares for delivery to Counterparty on the Initial Share Delivery Date, the Initial Shares delivered on the Initial Share Delivery Date shall be reduced to such number of Shares that Dealer is able to so borrow or otherwise acquire provided further that (i) if the Initial Shares are reduced as provided in the preceding proviso, then Dealer shall use commercially reasonable efforts to borrow or otherwise acquire an additional number of Shares equal to the shortfall in the Initial Shares delivered on the Initial Share Delivery Date and shall deliver such additional Shares as promptly as practicable, and all Shares so delivered shall be considered Initial Shares, and (ii) if fewer than [same number as above] Initial Shares are so delivered in the aggregate on or prior to the second Exchange Business Day following the Initial Share Delivery Date, then (A) the Prepayment Amount shall be reduced by an amount equal to (x)(I) [same number as above] minus (II) the aggregate number of Initial Shares so delivered on or prior to such second Exchange Business Day multiplied by (y) USD [insert closing price on the Trade Date] divided by (z) [   ], and (B) Dealer shall return to Counterparty on such second Exchange Business Day the amount by which the Prepayment Amount is so reduced.  All Shares delivered to Counterparty in respect of the Transaction pursuant to this paragraph shall be the “Initial Shares” for purposes of “Number of Shares to be Delivered” in the Master Confirmation.
Initial Share Delivery Date:	[__________], 20[__]
Ordinary Dividend Amount:	For any Dividend before the Termination Date, USD [___] per Share For any Dividend after the Termination Date, USD 0.00 per Share
Scheduled Ex-Dividend Dates:	[__________]
Maximum Stock Loan Rate:	200 basis points per annum
Initial Stock Loan Rate:	25 basis points per annum
Maximum Number of Shares:	[___] Shares
Floor Price:	USD 0.01 per Share
Termination Price:	USD [___] per Share
Excluded Days:	N/A
Additional Relevant Days:	N/A

© 2016 Corning Incorporated. All Rights Reserved.

A-2

Reserved Shares: Notwithstanding anything to the contrary in the Master Confirmation, as of the date of this Supplemental Confirmation, the Reserved Shares shall be equal to [___] Shares.

3.           Counterparty represents and warrants to Dealer that neither it nor any “affiliated purchaser” (as defined in Rule 10b-18 under the Exchange Act) has made any purchases of blocks pursuant to the proviso in Rule 10b-18(b)(4) under the Exchange Act during either (i) the four full calendar weeks immediately preceding the Trade Date or (ii) during the calendar week in which the Trade Date occurs, except as set forth in any notice delivered pursuant to Section 6(b)(xv) of the Master Confirmation.

4.           This Supplemental Confirmation may be executed in any number of counterparts, all of which shall constitute one and the same instrument, and any party hereto may execute this Supplemental Confirmation by signing and delivering one or more counterparts.

Please confirm that the foregoing correctly sets forth the terms of our agreement by executing this Supplemental Confirmation and returning it to us.

Very truly yours,

[_____]

By:

Authorized Signatory

Name:

Accepted and confirmed

as of the Trade Date:

CORNING INCORPORATED

By:

Authorized Signatory

Name:

© 2016 Corning Incorporated. All Rights Reserved.

A-3

SCHEDULE B

FORM OF CERTIFICATE OF RULE 10B-18 PURCHASES

[_____]

Re:           Uncollared Accelerated Share Repurchase

Ladies and Gentlemen:

In connection with our entry into the Master Confirmation, dated as of [_____], between Dealer and Corning Incorporated, a New York corporation, as amended and supplemented from time to time (the “Master Confirmation”), we hereby represent that set forth below is the total number of shares of our common stock purchased by or for us or any of our affiliated purchasers in Rule 10b-18 purchases of blocks (all as defined in Rule 10b-18 under the Securities Exchange Act of 1934) pursuant to the once-a-week block exception set forth in Rule 10b-18(b)(4) during the four full calendar weeks immediately preceding the first day of the [Calculation Period][Settlement Valuation Period][Seller Termination Purchase Period] (as defined in the Master Confirmation) and the week during which the first day of such [Calculation Period][Settlement Valuation Period][Seller Termination Purchase Period] occurs.

Number of Shares:   __________________

We understand that you will use this information in calculating trading volume for purposes of Rule 10b-18.

Very truly yours,

CORNING INCORPORATED

By:

Authorized Signatory

Name:

© 2016 Corning Incorporated. All Rights Reserved.

B-1

ANNEX A

COUNTERPARTY SETTLEMENT PROVISIONS

1.The following Counterparty Settlement Provisions shall apply to any Transaction to the extent indicated under the Master Confirmation:

Settlement Currency:	USD
Settlement Method Election:	Applicable; provided that (i) Section 7.1 of the Equity Definitions is hereby amended by deleting the word “Physical” in the sixth line thereof and replacing it with the words “Net Share” and (ii) the Electing Party may make a settlement method election only if the Electing Party represents and warrants to Dealer in writing on the date it notifies Dealer of its election that, as of such date, the Electing Party is not aware of any material non-public information regarding Counterparty or the Shares and is electing the settlement method in good faith and not as part of a plan or scheme to evade compliance with the federal securities laws.
Electing Party:	Counterparty
Settlement Method Election Date:	Subsequent to the expiration of the Settlement Valuation Period, the earlier of (i) the date on which Counterparty is able to make the representation and warranty required for such election, as provided under “Settlement Method Election”, and (ii) the 45th calendar day following the conclusion of the Settlement Valuation Period.
Default Settlement Method:	Cash Settlement
Forward Cash Settlement Amount:	An amount equal to (a) the Number of Shares to be Delivered, multiplied by (b) the Settlement Price.
Settlement Price:	The average of the 10b-18 VWAP prices for the Exchange Business Days in the Settlement Valuation Period, subject to Valuation Disruption as specified in the Confirmation.
Settlement Valuation Period:	A number of Scheduled Trading Days selected by Dealer in its reasonable discretion by notice to Counterparty on or prior to the second Scheduled Trading Day prior to the last Scheduled Trading Day thereof, beginning on the Scheduled Trading Day immediately following the earlier of (i) the Scheduled Termination Date or (ii) the Exchange Business Day immediately following the Termination Date.
Cash Settlement:	If Cash Settlement is applicable, then Buyer shall pay to Dealer the absolute value of the Forward Cash Settlement Amount on the Cash Settlement Payment Date.

© 2016 Corning Incorporated. All Rights Reserved.

Annex A - 1

Cash Settlement Payment Date:	The Exchange Business Day immediately following the date of Counterparty’s Settlement Method Election or, if no election is made, the Settlement Method Election Date.
Net Share Settlement Procedures:	If Net Share Settlement is applicable, Net Share Settlement shall be made in accordance with paragraphs 2 through 7 below.

2.           Net Share Settlement shall be made by delivery on the Cash Settlement Payment Date of a number of Shares satisfying the conditions set forth in paragraph 3 below (the “Registered Settlement Shares”), or a number of Shares not satisfying such conditions (the “Unregistered Settlement Shares”), in either case with a value equal to 101% (in the case of Registered Settlement Shares) or 105% (in the case of Unregistered Settlement Shares) of the absolute value of the Forward Cash Settlement Amount, with such Shares’ value based on the value thereof to Dealer (which value shall, in the case of Unregistered Settlement Shares, take into account a commercially reasonable illiquidity discount), in each case as determined by the Calculation Agent.  If all of the conditions for delivery of either Registered Settlement Shares or Unregistered Settlement Shares have not been satisfied, Cash Settlement shall be applicable in accordance with paragraph 1 above notwithstanding Counterparty’s election of Net Share Settlement.

3.           Counterparty may only deliver Registered Settlement Shares pursuant to paragraph 2 above if:

(a)           a registration statement covering public resale of the Registered Settlement Shares by Dealer (the “Registration Statement”) shall have been filed with the Securities and Exchange Commission under the Securities Act and been declared or otherwise become effective on or prior to the date of delivery, and no stop order shall be in effect with respect to the Registration Statement; a printed prospectus relating to the Registered Settlement Shares (including, without limitation, any prospectus supplement thereto, the “Prospectus”) shall have been delivered to Dealer, in such quantities as Dealer shall reasonably have requested, on or prior to the date of delivery;

(b)           the form and content of the Registration Statement and the Prospectus (including, without limitation, any sections describing the plan of distribution) shall be satisfactory to Dealer;

(c)           as of or prior to the date of delivery, Dealer and its agents shall have been afforded a reasonable opportunity to conduct a due diligence investigation with respect to Counterparty customary in scope for underwritten offerings of equity securities and the results of such investigation are satisfactory to Dealer, in its discretion; and

(d)           as of the date of delivery, an agreement (the “Underwriting Agreement”) shall have been entered into with Dealer in connection with the public resale of the Registered Settlement Shares by Dealer substantially similar to underwriting agreements customary for underwritten offerings of equity securities, in form and substance satisfactory to Dealer, which Underwriting Agreement shall include, without limitation, provisions substantially similar to those contained in such underwriting agreements relating, without limitation, to the indemnification of, and contribution in connection with the liability of, Dealer and its Affiliates and the provision of customary opinions, accountants’ comfort letters and lawyers’ negative assurance letters.

4.           If Counterparty delivers Unregistered Settlement Shares pursuant to paragraph 2 above:

(a)           all Unregistered Settlement Shares shall be delivered to Dealer (or any Affiliate of Dealer designated by Dealer) pursuant to the exemption from the registration requirements of the Securities Act provided by Section 4(2) thereof;

(b)           as of or prior to the date of delivery, Dealer and any potential purchaser of any such shares from Dealer (or any Affiliate of Dealer designated by Dealer) identified by Dealer shall be afforded a commercially reasonable opportunity to conduct a due diligence investigation with respect to Counterparty customary in scope for similar size of private placements of equity securities (including, without limitation, the right to have made available to them for inspection all financial and other records, pertinent corporate documents and other information reasonably requested by them); provided that prior to receiving or being granted access to any such information, any such potential purchaser may be required by Counterparty to enter into a customary nondisclosure agreement with Counterparty in respect of any such due diligence investigation;

© 2016 Corning Incorporated. All Rights Reserved.

Annex A - 2

(c)           as of the date of delivery, Counterparty shall enter into an agreement (a “Private Placement Agreement”) with Dealer (or any Affiliate of Dealer designated by Dealer) in connection with the private placement of such shares by Counterparty to Dealer (or any such Affiliate) and the private resale of such shares by Dealer (or any such Affiliate), substantially similar to private placement purchase agreements customary for private placements of equity securities, in form and substance commercially reasonably satisfactory to Dealer, which Private Placement Agreement shall include, without limitation, provisions substantially similar to those contained in such private placement purchase agreements relating, without limitation, to the indemnification of, and contribution in connection with the liability of, Dealer and its Affiliates and the provision of customary opinions, accountants’ comfort letters and lawyers’ negative assurance letters, and shall provide for the payment by Counterparty of all reasonable fees and actual, documented out-of-pocket expenses of Dealer (and any such Affiliate) in connection with such resale, including, without limitation, all reasonable fees and actual, documented out-of-pocket expenses of counsel for Dealer, and shall contain representations, warranties, covenants and agreements of Counterparty reasonably necessary or advisable to establish and maintain the availability of an exemption from the registration requirements of the Securities Act for such resales; and

(d)           in connection with the private placement of such shares by Counterparty to Dealer (or any such Affiliate) and the private resale of such shares by Dealer (or any such Affiliate), Counterparty shall, if so requested by Dealer, prepare, in cooperation with Dealer, a private placement memorandum in form and substance reasonably satisfactory to Dealer.

5.           Dealer, itself or through an Affiliate (the “Selling Agent”) or any underwriter(s), will sell all, or such lesser portion as may be required hereunder, of the Registered Settlement Shares or Unregistered Settlement Shares and any Makewhole Shares (as defined below) (together, the “Settlement Shares”) delivered by Counterparty to Dealer pursuant to paragraph 6 below commencing on the Cash Settlement Payment Date and continuing until the date on which the aggregate Net Proceeds (as such term is defined below) of such sales, as determined by Dealer, is equal to the absolute value of the Forward Cash Settlement Amount (such date, the “Final Resale Date”).  If Counterparty is prohibited by law or by contract from disclosing all material information known to Counterparty with respect to Counterparty and the Shares to any potential purchasers of such Settlement Shares, then the sale of such Settlement Shares shall not be required to commence or may be suspended until Counterparty is able to so disclose such information.  If the proceeds of any sale(s) made by Dealer, the Selling Agent or any underwriter(s), net of any fees and commissions (including, without limitation, underwriting or placement fees) customary for similar transactions under the circumstances at the time of the offering, together with carrying charges and expenses incurred in connection with the offer and sale of the Shares (including, without limitation, the covering of any over-allotment or short position (syndicate or otherwise)) (the “Net Proceeds”) exceed the absolute value of the Forward Cash Settlement Amount, Dealer will refund, in USD, such excess to Counterparty on the date that is three (3) Currency Business Days following the Final Resale Date, and, if any portion of the Settlement Shares remains unsold, Dealer shall return to Counterparty on that date such unsold Shares.

6.           If the Calculation Agent determines that the Net Proceeds received from the sale of the Registered Settlement Shares or Unregistered Settlement Shares or any Makewhole Shares, if any, pursuant to this paragraph 6 are less than the absolute value of the Forward Cash Settlement Amount (the amount in USD by which the Net Proceeds are less than the absolute value of the Forward Cash Settlement Amount being the “Shortfall” and the date on which such determination is made, the “Deficiency Determination Date”), Counterparty shall on the Exchange Business Day next succeeding the Deficiency Determination Date (the “Makewhole Notice Date”) deliver to Dealer, through the Selling Agent, a notice of Counterparty’s election that Counterparty shall either (i) pay an amount in cash equal to the Shortfall on the day that is one Currency Business Day after the Makewhole Notice Date, or (ii) deliver additional Shares.  If Counterparty elects to deliver to Dealer additional Shares, then Counterparty shall deliver additional Shares in compliance with the terms and conditions of paragraph 3 or paragraph 4 above, as the case may be (the “Makewhole Shares”), on the first Clearance System Business Day which is also an Exchange Business Day following the Makewhole Notice Date in such number as the Calculation Agent reasonably believes would have a market value on that Exchange Business Day equal to the Shortfall.  Such Makewhole Shares shall be sold by Dealer in accordance with the provisions above; provided that if the sum of the Net Proceeds from the sale of the originally delivered Shares and the Net Proceeds from the sale of any Makewhole Shares is less than the absolute value of the Forward Cash Settlement Amount then Counterparty shall, at its election, either make such cash payment or deliver to Dealer further Makewhole Shares until such Shortfall has been reduced to zero.

© 2016 Corning Incorporated. All Rights Reserved.

Annex A - 3

7.           Notwithstanding the foregoing, in no event shall the aggregate number of Settlement Shares for any Transaction be greater than the Reserved Shares minus the amount of any Shares actually delivered by Counterparty under any other Transaction under this Master Confirmation (the result of such calculation, the “Capped Number”).  Counterparty represents and warrants (which shall be deemed to be repeated on each day that a Transaction is outstanding) that the Capped Number is equal to or less than the number of Shares determined according to the following formula:

A – B
	Where	A  =	the number of authorized but unissued shares of Counterparty that are not reserved for future issuance on the date of the determination of the Capped Number; and
		B  =	the maximum number of Shares required to be delivered to third parties if Counterparty elected Net Share Settlement of all transactions in the Shares (other than Transactions in the Shares under this Master Confirmation) with all third parties that are then currently outstanding and unexercised.

“Reserved Shares” means initially, 200,000,000 Shares.  The Reserved Shares may be increased or decreased in a Supplemental Confirmation.

If at any time, as a result of this paragraph 7, Counterparty fails to deliver to Dealer any Settlement Shares, Counterparty shall, to the extent that Counterparty has at such time authorized but unissued Shares not reserved for other purposes, promptly notify Dealer thereof and deliver to Dealer a number of Shares not previously delivered as a result of this paragraph 7.

© 2016 Corning Incorporated. All Rights Reserved.

Annex A - 4

EX-31.1

Exhibit 31.1

CHIEF EXECUTIVE OFFICER CERTIFICATION

I, Wendell P. Weeks, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Corning Incorporated (the registrant);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

October 27, 2016

/s/ Wendell P. Weeks

Wendell P. Weeks

Chairman, Chief Executive Officer and President

(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CHIEF FINANCIAL OFFICER CERTIFICATION

I, R. Tony Tripeny, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Corning Incorporated (the registrant);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

October 27, 2016

/s/ R. Tony Tripeny

R. Tony Tripeny

Senior Vice President and Chief Financial Officer

(Principal Financial Officer)

EX-32

Exhibit 32

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Corning Incorporated (the Company) on Form 10-Q for the period ended September 30, 2016 as filed with the Securities and Exchange Commission on the date hereof (the Report), we, Wendell P. Weeks, Chairman, Chief Executive Officer and President and R. Tony Tripeny, Senior Vice President and Chief Financial Officer, of the Company, certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated:  October 27, 2016

/s/ Wendell P. Weeks

Wendell P. Weeks

Chairman, Chief Executive Officer and President

/s/ R. Tony Tripeny

R. Tony Tripeny

Senior Vice President and Chief Financial Officer

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Document And Entity Information - shares	9 Months Ended
	Sep. 30, 2016	Oct. 14, 2016
Document Information [Line Items]
Entity Registrant Name	CORNING INC /NY
Entity Central Index Key	0000024741
Trading Symbol	glw
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	Yes
Entity Common Stock, Shares Outstanding (in shares)		951,225,180
Document Type	10-Q
Document Period End Date	Sep. 30, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q3
Amendment Flag	false

XML

Consolidated Statements of Income (Unaudited) - USD ($)		3 Months Ended		9 Months Ended
		Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Net sales		$ 2,507,000,000	$ 2,272,000,000	$ 6,914,000,000	$ 6,880,000,000
Cost of sales		1,466,000,000	1,380,000,000	4,158,000,000	4,084,000,000
Gross margin		1,041,000,000	892,000,000	2,756,000,000	2,796,000,000
Operating expenses:
Selling, general and administrative expenses		302,000,000	307,000,000	1,104,000,000	960,000,000
Research, development and engineering expenses		187,000,000	181,000,000	569,000,000	561,000,000
Amortization of purchased intangibles		17,000,000	12,000,000	46,000,000	40,000,000
Restructuring, impairment and other charges		0	0	78,000,000	0
Operating income		535,000,000	392,000,000	959,000,000	1,235,000,000
Equity in earnings of affiliated companies		19,000,000	39,000,000	119,000,000	195,000,000
Interest income		9,000,000	6,000,000	21,000,000	16,000,000
Interest expense		(41,000,000)	(38,000,000)	(122,000,000)	(101,000,000)
Translated earnings contract (loss) gain, net		(237,000,000)	(149,000,000)	(2,295,000,000)	42,000,000
Gain			0	2,676,000,000	0
Other expense, net		(28,000,000)	(32,000,000)	(70,000,000)	(70,000,000)
Income before income taxes		257,000,000	218,000,000	1,288,000,000	1,317,000,000
Income tax (provision) benefit		27,000,000	(6,000,000)	835,000,000	(202,000,000)
Net income attributable to Corning Incorporated		$ 284,000,000	$ 212,000,000	$ 2,123,000,000	$ 1,115,000,000
Earnings per common share attributable to Corning Incorporated:
Basic (Note 6) (in dollars per share)		$ 0.27	$ 0.16	$ 1.96	$ 0.84
Diluted (Note 6) (in dollars per share)		0.26	0.15	1.81	0.82
Dividends declared per common share (1) (in dollars per share)	[1]	$ 0.135	$ 0.12	$ 0.405	$ 0.24

[1] The first quarter 2015 dividend was declared on December 3, 2014.

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Consolidated Statements of Comprehensive Income (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Net income	$ 284,000,000	$ 212,000,000	$ 2,123,000,000	$ 1,115,000,000
Foreign currency translation adjustments and other	245,000,000	(181,000,000)	869,000,000	(477,000,000)
Net unrealized (losses) gains on investments			(3,000,000)	1,000,000
Unamortized (losses) gains and prior service credits (costs) for postretirement benefit plans	(5,000,000)	6,000,000	260,000,000	12,000,000
Net unrealized gains (losses) on designated hedges	11,000,000	(37,000,000)	(30,000,000)	(32,000,000)
Other comprehensive income (loss), net of tax (Note 15)	251,000,000	(212,000,000)	1,096,000,000	(496,000,000)
Comprehensive income attributable to Corning Incorporated	$ 535,000,000	$ 0	$ 3,219,000,000	$ 619,000,000

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Consolidated Balance Sheets (Unaudited) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Current assets:
Cash and cash equivalents	$ 4,821,000,000	$ 4,500,000,000
Short-term investments, at fair value	0	100,000,000
Trade accounts receivable, net of doubtful accounts and allowances - $62 and $48	1,645,000,000	1,372,000,000
Inventories, net of inventory reserves - $160 and $146 (Note 8)	1,516,000,000	1,385,000,000
Other current assets	497,000,000	912,000,000
Total current assets	8,479,000,000	8,269,000,000
Investments (Note 9)	352,000,000	1,975,000,000
Property, plant and equipment, net of accumulated depreciation - $10,206 and $9,188	13,293,000,000	12,648,000,000
Goodwill, net (Note 10)	1,569,000,000	1,380,000,000
Other intangible assets, net (Note 10)	797,000,000	706,000,000
Deferred income taxes (Note 5)	3,110,000,000	2,056,000,000
Other assets	1,209,000,000	1,493,000,000
Total Assets	28,809,000,000	28,527,000,000
Current liabilities:
Current portion of long-term debt and short-term borrowings (Note 4)	7,000,000	572,000,000
Accounts payable	933,000,000	934,000,000
Other accrued liabilities (Note 3 and Note 12)	1,354,000,000	1,308,000,000
Total current liabilities	2,294,000,000	2,814,000,000
Long-term debt (Note 4)	3,916,000,000	3,890,000,000
Postretirement benefits other than pensions (Note 11)	708,000,000	718,000,000
Other liabilities (Note 3 and Note 12)	4,104,000,000	2,242,000,000
Total liabilities	11,022,000,000	9,664,000,000
Shareholders’ equity (Note 15):
Convertible preferred stock, Series A – Par value $100 per share; Shares authorized 3,100; Shares issued: 2,300	2,300,000,000	2,300,000,000
Common stock – Par value $0.50 per share; Shares authorized 3.8 billion; Shares issued: 1,689 million and 1,681 million	844,000,000	840,000,000
Additional paid-in capital – common stock	13,340,000,000	13,352,000,000
Retained earnings	15,460,000,000	13,832,000,000
Treasury stock, at cost; Shares held: 738 million and 551 million	(13,508,000,000)	(9,725,000,000)
Accumulated other comprehensive loss	(715,000,000)	(1,811,000,000)
Total Corning Incorporated shareholders’ equity	17,721,000,000	18,788,000,000
Noncontrolling interests	66,000,000	75,000,000
Total equity	17,787,000,000	18,863,000,000
Total Liabilities and Equity	$ 28,809,000,000	$ 28,527,000,000

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Consolidated Balance Sheets (Unaudited) (Parentheticals) - USD ($) $ in Millions	Sep. 30, 2016	Dec. 31, 2015
Doubtful accounts and allowances	$ 62	$ 48
Inventory reserves	160	146
Accumulated depreciation	$ 10,206	$ 9,188
Convertible preferred stock, par value (in dollars per share)	$ 100	$ 100
Convertible preferred stock, shares authorized (in shares)	3,100	3,100
Convertible preferred stock, shares issued (in shares)	2,300	2,300
Common stock, par value (in dollars per share)	$ 0.50	$ 0.50
Common stock, shares authorized (in shares)	3,800,000,000	3,800,000,000
Common stock, shares issued (in shares)	1,689,000,000	1,681,000,000
Treasury stock, shares held (in shares)	738,000,000	551,000,000

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Consolidated Statements of Cash Flows (Unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Cash Flows from Operating Activities:
Net income	$ 2,123,000,000	$ 1,115,000,000
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	844,000,000	842,000,000
Amortization of purchased intangibles	46,000,000	40,000,000
Restructuring, impairment and other charges	78,000,000	0
Stock compensation charges	33,000,000	36,000,000
Equity in earnings of affiliated companies	(119,000,000)	(195,000,000)
Dividends received from affiliated companies	20,000,000	143,000,000
Deferred tax (benefit) provision	(1,047,000,000)	187,000,000
Restructuring payments	(10,000,000)	(38,000,000)
Employee benefit payments less than expense	0	5,000,000
Losses (gains) on foreign currency hedges related to translated earnings	2,295,000,000	(42,000,000)
Unrealized translation (gains) losses on transactions	(177,000,000)	303,000,000
Contingent consideration fair value adjustment	(40,000,000)
Gain on realignment of equity investment	(2,676,000,000)	0
Changes in certain working capital items:
Trade accounts receivable	(184,000,000)	52,000,000
Inventories	(69,000,000)	(60,000,000)
Other current assets	(42,000,000)	(204,000,000)
Accounts payable and other current liabilities	14,000,000	(294,000,000)
Other, net	6,000,000	(45,000,000)
Net cash provided by operating activities	1,095,000,000	1,845,000,000
Cash Flows from Investing Activities:
Capital expenditures	(815,000,000)	(939,000,000)
Acquisitions of business, net of cash acquired	(279,000,000)	(531,000,000)
Investment in unconsolidated entities	(14,000,000)	(33,000,000)
Cash	4,818,000,000	0
(Payments) proceeds from loan repayments from unconsolidated entities	(10,000,000)	6,000,000
Short-term investments – acquisitions	(20,000,000)	(859,000,000)
Short-term investments – liquidations	121,000,000	1,046,000,000
Realized gains on foreign currency hedges related to translated earnings	146,000,000	489,000,000
Other, net	9,000,000	(1,000,000)
Net cash provided by (used in) investing activities	3,956,000,000	(822,000,000)
Cash Flows from Financing Activities:
Net repayments of short-term borrowings and current portion of long-term debt	(85,000,000)	0
Principal payments under capital lease obligations	(1,000,000)	(1,000,000)
Proceeds from issuance of short-term debt	0	2,000,000
Proceeds from issuance of long-term debt	0	745,000,000
Payments from issuance of commercial paper	(481,000,000)	0
Payments from settlement of interest rate swap arrangements	0	(10,000,000)
Proceeds from the exercise of stock options	(86,000,000)	(99,000,000)
Repurchases of common stock for treasury	(3,884,000,000)	(1,905,000,000)
Dividends paid	(493,000,000)	(519,000,000)
Net cash used in financing activities	(4,858,000,000)	(1,589,000,000)
Effect of exchange rates on cash	128,000,000	(303,000,000)
Net increase (decrease) in cash and cash equivalents	321,000,000	(869,000,000)
Cash and cash equivalents at beginning of period	4,500,000,000	5,309,000,000
Cash and cash equivalents at end of period	$ 4,821,000,000	$ 4,440,000,000

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Note 1 - Significant Accounting Policies

9 Months Ended

Sep. 30, 2016

Notes to Financial Statements

Significant Accounting Policies [Text Block]

1.      Significant Accounting Policies

Basis of Presentation

In these notes, the terms “Corning,” “Company,” “we,” “us,” or “our” mean Corning Incorporated and its subsidiary companies.

The accompanying unaudited consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”) for interim financial information.  Certain information and note disclosures normally included in financial statements prepared in accordance with GAAP have been omitted or condensed.  These interim consolidated financial statements should be read in conjunction with Corning’s consolidated financial statements and notes thereto included in its Annual Report on Form 10-K for the year ended December 31, 2015 (“2015 Form 10-K”).

The unaudited consolidated financial statements reflect all adjustments which, in the opinion of management, are necessary for a fair statement of the results of operations, financial position and cash flows for the interim periods presented.  All such adjustments are of a normal recurring nature.  The results for interim periods are not necessarily indicative of results which may be expected for any other interim period or for the full year.

Certain prior year amounts have been reclassified to conform to the current-year presentation.  These reclassifications had no impact on our results of operations, financial position, or changes in shareholders’ equity.

New Accounting Standards

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. (“ASU”) 2014-09, Revenue from Contracts with Customers, as a new Topic, Accounting Standards Codification (“ASC”) Topic 606.  The new revenue recognition standard provides a five-step analysis of transactions to determine when and how revenue is recognized.  The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.  This ASU originally was effective for annual periods beginning after December 15, 2016, including interim periods within that reporting period.  This ASU shall be applied retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption.

In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606), deferring the effective date of ASU 2014-09 by one year.  We can elect to adopt the provisions of ASU 2014-09 for annual periods beginning after December 15, 2017, including interim periods within that reporting period.  The FASB also agreed to allow entities to choose to adopt the standard as of the original effective date.  We are currently assessing the adoption date and potential impact of adopting ASU 2014-09 on our financial statements and related disclosures.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which supersedes all existing guidance on accounting for leases in ASC Topic 840.  ASU 2016-02 is intended to provide enhanced transparency and comparability by requiring lessees to record right-of-use assets and corresponding lease liabilities on the balance sheet.  ASU 2016-02 will continue to classify leases as either finance or operating, with classification affecting the pattern of expense recognition in the statement of income.  ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years.  Early adoption is permitted.  ASU 2016-02 is required to be applied with a modified retrospective approach to each prior reporting period presented with various optional practical expedients.  We are currently assessing the adoption date and the potential impact of adopting ASU 2016-02 on our financial statements and related disclosures.

In March 2016, the FASB issued ASU 2016-09, Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting.  ASU 2016-09 changes how companies account for certain aspects of share-based payment awards to employees, including the accounting for income taxes, forfeitures and statutory tax withholding requirements, as well as classification in the statement of cash flows.  ASU 2016-09 is effective for annual periods beginning after December 15, 2016, including interim periods within those annual periods.  If an entity early adopts in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period and the entity must adopt all of the amendments from ASU 2016-09 in the same period.  We are currently assessing the potential impact of adopting ASU 2016-09 on our financial statements and related disclosures.  Corning does not expect adoption of this standard to have a material impact on its consolidated results of operations and financial condition.

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments.  ASU 2016-15 refines how companies classify certain aspects of the cash flow statement in regards to debt prepayment, settlement of debt instruments, contingent consideration payments, proceeds from insurance claims and life insurance policies, distribution from equity method investees, beneficial interests in securitization transactions and separately identifiable cash flows.  ASU 2016-15 is effective for annual periods beginning after December 15, 2017, and for interim periods within fiscal years beginning after December 15, 2018.  Early adoption is permitted.  We are currently assessing the adoption date and the potential impact of adopting ASU 2016-15 on our financial statements and related disclosures.

In October 2016, the FASB issued ASU No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory, which reduces the complexity in the accounting standards by allowing the recognition of current and deferred income taxes for an intra-entity asset transfer, other than inventory, when the transfer occurs. Historically, recognition of the income tax consequence was not recognized until the asset was sold to an outside party.  This amendment should be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption.  ASU 2016-16 is effective for annual periods beginning after December 15, 2017, including interim reporting periods within those annual reporting periods.  Early adoption is permitted for all entities as of the beginning of an annual reporting period for which financial statements (interim or annual) have not been issued or made available for issuance.  We are currently evaluating the impact of ASU 2016-16 on our consolidated financial statements and related disclosures.

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Note 2 - Restructuring, Impairment and Other Charges

9 Months Ended

Sep. 30, 2016

Notes to Financial Statements

Restructuring and Related Activities Disclosure [Text Block]

2.      Restructuring, Impairment and Other Charges

2016 Activity

In the first three quarters of 2016, we recorded charges of $78 million, pre-tax, for employee related costs, asset disposals, and exit costs associated with some minor restructuring activities in all of the segments, with total cash expenditures estimated to be $15 million.

The following table summarizes the restructuring, impairment and other charges for the nine months ended September 30, 2016 (in millions):

	Reserve at January 1, 2016		Net Charges/ Reversals		Non-cash adjustments		Cash payments		Reserve at September 30, 2016
Restructuring:
Employee related costs	$	3	$	15	$	(1)	$	(9)	$	8
Other charges				1				(1)
Total restructuring activity	$	3	$	16	$	(1)	$	(10)	$	8
Disposal of long-lived assets			$	62
Total restructuring, impairment and other charges			$	78

Cash payments for employee-related and exit activity related to the 2016 restructuring activities are expected to be substantially completed in 2016.

The year-to-date cost of these plans for each of our reportable segments was as follows (in millions):

Operating segment	Employee- related and other charges
Display Technologies	$	4
Optical Communications		6
Environmental Technologies		5
Specialty Materials		12
Life Sciences		3
All Other		40
Corporate		8
Total restructuring, impairment and other charges	$	78

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Note 3 - Commitments, Contingencies, and Guarantees

9 Months Ended

Sep. 30, 2016

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

3.   Commitments, Contingencies and Guarantees

Asbestos Claims

Corning and PPG Industries, Inc. each owned 50% of the capital stock of Pittsburgh Corning Corporation (“PCC”).  PCC filed for Chapter 11 reorganization in 2000 and the Modified Third Amended Plan of Reorganization for PCC (the “Plan”) became effective in April 2016.  At December 31, 2015, the Company’s liability under the Plan was estimated to be $528 million.  At September 30, 2016, this estimated liability was $290 million, due to the Company’s contribution, in the second quarter of 2016, of its equity interests in PCC and Pittsburgh Corning Europe N.V. in the total amount of $238 million, as required by the Plan.  Corning recognized a gain of $56 million in the second quarter of 2016 in the selling, general and administrative expenses line of the Company’s Consolidated Statements of Income for the difference between the fair value of the asbestos litigation liability and carrying value of the investment.  The remaining $290 million liability is for the fixed series of payments required by the Plan.  At September 30, 2016, the total amount of the payments due in years 2018 through 2022 is $220 million and is classified as a non-current liability.  The remaining $70 million payment due in the second quarter of 2017 is classified as a current liability as it is expected to be made within the next twelve months.  Additionally, Corning is a defendant in other cases alleging injuries from asbestos unrelated to PCC (the “non-PCC asbestos claims”) which had been stayed pending the confirmation of the Plan.  The stay was lifted on August 25, 2016.  Corning previously established a $150 million reserve for these non-PCC asbestos claims.  The estimated reserve represents the undiscounted projection of claims and related legal fees over the next 20 years.  The amount may need to be adjusted in future periods as more data becomes available; however, we cannot estimate any lesser or greater liabilities at this time.

A summary of changes of the estimated asbestos litigation liability is as follows (in millions):

	Amended PCC Plan				Non-PCC		Total Asbestos Litigation Liability
	Equity Interests		Fixed Series of Payments
Fair Value of Asbestos Litigation Liability as of Dec. 31, 2015	$	238	$	290	$	150	$	678
Less: Contribution of PCC & PCE Equity Interests - Carrying Value		182		-		-		182
Gain on Contribution of Equity Interests		56		-		-		56
Asbestos Litigation Liability as of September 30, 2016	$	-	$	290	$	150	$	440

Non-PCC Asbestos Claims Insurance Litigation

Several of Corning’s insurers have commenced litigation in state courts for a declaration of the rights and obligations of the parties under insurance policies, including rights that may be affected by the potential resolutions described above.  Corning has resolved these issues with a majority of its relevant insurers, and is vigorously contesting these cases with the remaining relevant insurers.  Management is unable to predict the outcome of the litigation with these remaining insurers.

Other Commitments and Contingencies

We are required, at the time a guarantee is issued, to recognize a liability for the fair value or market value of the obligation it assumes.  In the normal course of our business, we do not routinely provide significant third-party guarantees.  Generally, any third party guarantees provided by Corning are limited to certain financial guarantees including stand-by letters of credit and performance bonds, and the incurrence of contingent liabilities in the form of purchase price adjustments related to attainment of milestones.  When provided, these guarantees have various terms, and none of these guarantees are individually significant.

As of September 30, 2016 and December 31, 2015, contingent guarantees totaled a notional value of $201 million and $184 million, respectively.  We believe a significant majority of these contingent guarantees will expire without being funded.  We also were contingently liable for purchase obligations of $255 million and $220 million, at September 30, 2016 and December 31, 2015, respectively.

Product warranty liability accruals were considered insignificant at September 30, 2016 and December 31, 2015.

Corning is a defendant in various lawsuits, including environmental, product-related suits, and is subject to various claims that arise in the normal course of business.  In the opinion of management, the likelihood that the ultimate disposition of these matters will have a material adverse effect on Corning’s consolidated financial position, liquidity, or results of operations, is remote.  Other than certain asbestos related claims, there are no other material loss contingencies related to litigation.

Corning has been named by the Environmental Protection Agency (“the Agency”) under the Superfund Act, or by state governments under similar state laws, as a potentially responsible party for 17 active hazardous waste sites.  Under the Superfund Act, all parties who may have contributed any waste to a hazardous waste site, identified by the Agency, are jointly and severally liable for the cost of cleanup unless the Agency agrees otherwise.  It is Corning’s policy to accrue for its estimated liability related to Superfund sites and other environmental liabilities related to property owned by Corning based on expert analysis and continual monitoring by both internal and external consultants.  At September 30, 2016 and December 31, 2015, Corning had accrued approximately $45 million (undiscounted) and $37 million (undiscounted), respectively, for the estimated liability for environmental cleanup and related litigation.  Based upon the information developed to date, management believes that the accrued reserve is a reasonable estimate of the Company’s liability and that the risk of an additional loss in an amount materially higher than that accrued is remote.

The ability of certain subsidiaries and affiliated companies to transfer funds is limited by provisions of foreign government regulations, affiliate agreements and certain loan agreements.  At September 30, 2016, the amount of equity subject to such restrictions for consolidated subsidiaries and affiliated companies was not significant.  While this amount is legally restricted, it does not result in operational difficulties since we have generally permitted subsidiaries to retain a majority of equity to support their growth programs.

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Note 4 - Debt

9 Months Ended

Sep. 30, 2016

Notes to Financial Statements

Debt Disclosure [Text Block]

4.      Debt

Based on borrowing rates currently available to us for loans with similar terms and maturities, the fair value of long-term debt was $4.3 billion at September 30, 2016 and $4.1 billion at December 31, 2015, compared to recorded book values of $3.9 billion at September 30, 2016 and December 31, 2015.  The Company measures the fair value of its long-term debt using Level 2 inputs based primarily on current market yields for its existing debt traded in the secondary market.

On July 20, 2016, Corning’s Board of Directors approved a $1 billion increase to our commercial paper program, raising it to $2 billion.  If needed, this program is supported by our $2 billion revolving credit facility that expires in 2019.  Corning did not have outstanding commercial paper at September 30, 2016.

Debt Issuances

2015

In the second quarter of 2015, we issued $375 million of 1.50% senior unsecured notes that mature on May 8, 2018 and $375 million of 2.90% senior unsecured notes that mature on May 15, 2022.  We can redeem these debentures at any time, subject to certain stipulations.

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Note 5 - Income Taxes

9 Months Ended

Sep. 30, 2016

Notes to Financial Statements

Income Tax Disclosure [Text Block]

5.      Income Taxes

Our benefit (provision) for income taxes and the related effective income tax rates were as follows (in millions):

	Three months ended September 30,				Nine months ended September 30,
	2016		2015		2016		2015
Benefit (provision) for income taxes	$	27	$	(6)	$	835	$	(202)
Effective tax rate		(10.5%)		2.8%		(64.8%)		15.3%

For the three months ended September 30, 2016, the effective income tax rate differed from the U.S. statutory rate of 35% primarily due to the following benefits:

·   Rate differences on income (loss) of consolidated foreign companies, including the benefit of excess foreign tax credits resulting from the inclusion of foreign earnings in U.S. income.

For the nine months ended September 30, 2016, the effective income tax rate differed from the U.S. statutory rate of 35% primarily due to the following benefits:

·   Rate differences on income (loss) of consolidated foreign companies, including the benefit of excess foreign tax credits resulting from the inclusion of foreign earnings in U.S. income;

·   The impact of equity in earnings of nonconsolidated affiliates reported in the financials, net of tax; and

·   The tax-free nature of the realignment of our equity interest in Dow Corning during the period, as well as the release of the deferred tax liability related to Corning’s tax on Dow Corning’s undistributed earnings as of the date of the transaction.

For the three and nine months ended September 30, 2015, the effective income tax rate differed from the U.S. statutory rate of 35% primarily due to the following benefits:

·   Rate differences on income (loss) of consolidated foreign companies, including the benefit of excess foreign tax credits resulting from the inclusion of high-taxed foreign earnings in U.S. income; and

·   The impact of equity in earnings of nonconsolidated affiliates reported in the financials, net of tax.

Corning continues to indefinitely reinvest substantially all of its foreign earnings, with the exception of an immaterial amount of current earnings that have very low or no tax cost associated with their repatriation.  Our current analysis indicates that we have sufficient U.S. liquidity, including borrowing capacity, to fund foreseeable U.S. cash needs without requiring the repatriation of foreign cash.  Significant one time or unusual items that may impact our ability or intent to keep our foreign earnings and cash indefinitely reinvested include significant U.S. acquisitions, stock repurchases, shareholder dividends, changes in tax laws, derivative contract settlements or the development of tax planning ideas that allow us to repatriate earnings at minimal or no tax cost, and/or a change in our circumstances or economic conditions that negatively impact our ability to borrow or otherwise fund U.S. needs from existing U.S. sources.  While it remains impracticable to calculate the tax cost of repatriating our total unremitted foreign earnings, such cost could be material to the results of operations of Corning in a particular period.

While we expect the amount of unrecognized tax benefits to change in the next 12 months, we do not expect the change to have a significant impact on the results of operations or our financial position.

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Note 6 - Earnings Per Common Share

9 Months Ended

Sep. 30, 2016

Notes to Financial Statements

Earnings Per Share [Text Block]

6.      Earnings per Common Share

The following table sets forth the computation of basic and diluted earnings per common share (in millions, except per share amounts):

	Three months ended September 30,				Nine months ended September 30,
	2016		2015		2016		2015
Net income attributable to Corning Incorporated	$	284	$	212	$	2,123	$	1,115
Less:  Series A convertible preferred stock dividend		24		24		73		73
Net income available to common stockholders – basic		260		188		2,050		1,042
Plus:  Series A convertible preferred stock dividend  (1)		24				73		73
Net income available to common stockholders – diluted	$	284	$	188	$	2,123	$	1,115
Weighted-average common shares outstanding – basic		978		1,210		1,046		1,241
Effect of dilutive securities:
Stock options and other dilutive securities		9		8		9		10
Series A convertible preferred stock  (1)		115				115		115
Weighted-average common shares outstanding – diluted		1,102		1,218		1,170		1,366
Basic earnings per common share	$	0.27	$	0.16	$	1.96	$	0.84
Diluted earnings per common share	$	0.26	$	0.15	$	1.81	$	0.82
Antidilutive potential shares excluded from diluted earnings per common share:
Series A convertible preferred stock  (1)				115
Employee stock options and awards		13		29		18		22
Accelerated share repurchase forward contract		14				14
Total		27		144		32		22

(1) In the three months ended September 30, 2015, the Series A convertible preferred stock was anti-dilutive and therefore excluded from the calculation of diluted earnings per share.

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Note 7 - Available-for-Sale Investments

9 Months Ended

Sep. 30, 2016

Notes to Financial Statements

Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]

7.      Available-for-Sale Investments

At September 30, 2016 and December 31, 2015, the Company held $0 million and $100 million of short-term investments (U.S. government and agency securities), respectively.  At September 30, 2016 and December 31, 2015, the Company held long-term investments of $30 million and $33 million in asset-backed securities, respectively.  The Company’s investments in available-for-sale securities are held at fair value with amortized cost of $33 million and $37 million at September 30, 2016 and December 31, 2015, respectively.

We have no plans to sell, nor do we believe it is more likely than not that we would be required to sell, the long-term investment asset-backed securities (which are collateralized by mortgages) before recovery of their amortized cost basis.  It is possible that a significant degradation in the delinquency or foreclosure rates in the underlying assets could cause further temporary or other-than-temporary impairments in the future.

For the nine months ended September 30, 2016 and 2015, proceeds from sales and maturities of short-term investments totaled approximately $121 million and $1.0 billion, respectively.

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Note 8 - Inventories, Net of Inventory Reserves

9 Months Ended

Sep. 30, 2016

Notes to Financial Statements

Inventory Disclosure [Text Block]

8.      Inventories, Net of Inventory Reserves

Inventories, net of inventory reserves comprise the following (in millions):

	September 30, 2016		December 31, 2015
Finished goods	$	636	$	633
Work in process		301		264
Raw materials and accessories		278		200
Supplies and packing materials		301		288
Total inventories, net of inventory reserves	$	1,516	$	1,385

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Note 9 - Investments

9 Months Ended

Sep. 30, 2016

Notes to Financial Statements

Equity Method Investments and Joint Ventures Disclosure [Text Block]

9.      Investments

On May 31, 2016, Corning completed the strategic realignment of its equity investment in Dow Corning Corporation (“Dow Corning”) pursuant to the Transaction Agreement announced in December 2015.  Under the terms of the Transaction Agreement, Corning exchanged with Dow Corning its 50% stock interest in Dow Corning for 100% of the stock of a newly formed entity, which holds an equity interest in Hemlock Semiconductor Group (“HSG”) and approximately $4.8 billion in cash.

Prior to realignment, HSG, a wholly owned and consolidated subsidiary of Dow Corning, was an indirect equity investment of Corning.  Upon completion of the exchange, Corning now has a direct equity investment in HSG.  Because our ownership percentage in HSG did not change as a result of the realignment, the investment in HSG is recorded at its carrying value, which had a negative carrying value of $383 million at the transaction date.  The negative carrying value resulted from a one-time charge to this entity in 2014 for the permanent abandonment of certain assets.  Excluding this charge, the entity is profitable and is expected to recover its equity in the near term.

Corning’s financial statements as of September 30, 2016 include the positive impact of the release of a deferred tax liability of $105 million related to Corning’s tax on Dow Corning’s earnings that were not distributed as of the date of the transaction and a non-taxable gain of $2,676 million on the realignment.  Details of the gain are illustrated below (in millions):

Cash	$	4,818
Carrying Value of Dow Corning Equity Investment		(1,560)
Carrying Value of HSG Equity Investment		(383)
Other  (1)		(199)
Gain	$	2,676

(1)   Primarily consists of the release of accumulated other comprehensive income items related to unamortized actuarial losses related to Dow Corning’s pension plan and foreign currency translation gains in the amounts of $260 million and $45 million, respectively.

Investments comprise the following (in millions):

	Ownership interest			September 30, 2016		December 31, 2015
Affiliated companies accounted for by the equity method
Dow Corning  (1)		50%				$	1,483
All other  (1)	20%	to	50%	$	285		422
					285		1,905
Other investments					67		70
Subtotal Investment Assets				$	352	$	1,975
Affiliated companies accounted for by the equity method
HSG  (2)(3)		50%		$	343
Subtotal Investment Liabilities				$	343

(1)   Amounts reflect Corning’s direct ownership interests in the respective affiliated companies at September 30, 2016 and December 31, 2015.  Corning does not control any of such entities.

(2)   HSG indirectly holds an 80.5% interest in a HSG operating partnership.

(3)   The negative carrying value of the investment in HSG is recorded in Other Liabilities.

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Note 10 - Goodwill and Other Intangible Assets

9 Months Ended

Sep. 30, 2016

Notes to Financial Statements

Goodwill and Intangible Assets Disclosure [Text Block]

10.      Goodwill and Other Intangible Assets

The carrying amount of goodwill by segment for the periods ended September 30, 2016 and December 31, 2015 is as follows (in millions):

	Optical Communications		Display Technologies		Specialty Materials		Life Sciences		All Other		Total
Balance at December 31, 2015	$	439	$	128	$	150	$	562	$	101	$	1,380
Acquired goodwill  (1)		175										175
Measurement period adjustment  (2)		(6)										(6)
Foreign currency translation adjustment		7		5				6		2		20
Balance at September 30, 2016	$	615	$	133	$	150	$	568	$	103	$	1,569

(1) The Company completed an acquisition in the Optical Communications segment during the second quarter of 2016 with a purchase price of $296 million.

(2) In the third quarter of 2016, minor adjustments were made to the preliminary allocation of the total purchase consideration related to a second quarter acquisition.  The allocation is expected to be finalized in the fourth quarter of 2016, and any adjustments are not expected to be material.

Corning’s gross goodwill balances for the periods ended September 30, 2016 and December 31, 2015 were $8.1 billion and $7.9 billion, respectively.  Accumulated impairment losses were $6.5 billion for the periods ended September 30, 2016 and December 31, 2015, and were generated primarily through goodwill impairments related to the Optical Communications segment.

Other intangible assets are as follows (in millions):

	September 30, 2016						December 31, 2015
	Gross		Accumulated amortization		Net		Gross		Accumulated amortization		Net
Amortized intangible assets:
Patents, trademarks, and trade names	$	367	$	176	$	191	$	350	$	162	$	188
Customer lists and other		744		138		606		621		103		518
Total	$	1,111	$	314	$	797	$	971	$	265	$	706

Corning’s amortized intangible assets are primarily related to the Optical Communications and Life Sciences segments.  The net carrying amount of intangible assets increased during the first nine months of 2016, primarily due to acquisitions of $127 million of other intangible assets and foreign currency translation adjustments of $11 million, offset by amortization of $46 million.

Amortization expense related to these intangible assets is estimated to be $67 million for 2016, $72 million annually from 2017 to 2018, $71 million for 2019, and $66 million annually from 2020 to 2021.

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Note 11 - Employee Retirement Plans

9 Months Ended

Sep. 30, 2016

Notes to Financial Statements

Pension and Other Postretirement Benefits Disclosure [Text Block]

11.      Employee Retirement Plans

The following table summarizes the components of net periodic benefit cost for Corning’s defined benefit pension and postretirement health care and life insurance plans (in millions):

	Pension benefits								Postretirement benefits
	Three months ended September 30,				Nine months ended September 30,				Three months ended September 30,				Nine months ended September 30,
	2016		2015		2016		2015		2016		2015		2016		2015
Service cost	$	22	$	22	$	65	$	67	$	3	$	3	$	7	$	10
Interest cost		31		36		93		109		6		8		19		24
Expected return on plan assets		(41)		(44)		(124)		(133)
Amortization of net loss												1		(1)		3
Amortization of prior service cost (credit)		1		2		4		5		(1)		(2)		(3)		(5)
Recognition of actuarial loss		26				60		8
Total pension and postretirement benefit expense	$	39	$	16	$	98	$	56	$	8	$	10	$	22	$	32

The recognition of actuarial loss in the three months ended September 30, 2016 resulted from small settlements in several of our benefit plans which triggered plan remeasurements.  In addition to the settlements occurring in the third quarter of 2016, results in the nine months ended September 30, 2016 also included the impact of the finalization of our 2015 benefit plan valuations.

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Note 12 - Other Liabilities

9 Months Ended

Sep. 30, 2016

Notes to Financial Statements

Other Liabilities Disclosure [Text Block]

12. Other Liabilities

Other liabilities follow (in millions):

	September 30, 2016		December 31, 2015
Current liabilities:
Wages and employee benefits	$	472	$	491
Income taxes		149		53
Asbestos and other litigation reserves		73		238
Derivative instruments		204		55
Other current liabilities		456		471
Other accrued liabilities	$	1,354	$	1,308
Non-current liabilities:
Asbestos and other litigation reserves	$	394	$	440
Derivative instruments		1,543		88
Investment in Hemlock Semiconductor Group  (1)		343
Defined benefit pension plan liabilities		762		672
Other non-current liabilities		1,062		1,042
Other liabilities	$	4,104	$	2,242

(1)   The negative carrying value resulted from a one-time charge to this entity in 2014 for the permanent abandonment of certain assets.

Asbestos Litigation

Corning and PPG each owned 50% of the capital stock of PCC.  Over a period of more than two decades, PCC and several other defendants were named in numerous lawsuits involving claims alleging personal injury from exposure to asbestos.  Refer to Note 3 (Commitments, Contingencies and Guarantees) to the consolidated financial statements for additional information on the asbestos litigation.

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Note 13 - Hedging Activities

9 Months Ended

Sep. 30, 2016

Notes to Financial Statements

Derivative Instruments and Hedging Activities Disclosure [Text Block]

13.      Hedging Activities

Undesignated Hedges

The table below includes a total gross notional value for translated earnings contracts of $17.6 billion and $12.0 billion at September 30, 2016 and December 31, 2015, respectively.  The translated earnings contracts include purchased and zero-cost collars of $2.8 billion and $5.6 billion and average rate forwards of $14.8 billion and $6.4 billion at September 30, 2016 and December 31, 2015, respectively.  With respect to the purchased and zero-cost collars, the gross notional amount includes the value of both the put and call options.  However, due to the nature of the purchased and zero-cost collars, either the put or the call option can be exercised at maturity.  The total net notional value of the purchased and zero-cost collars was $1.4 billion and $2.9 billion at September 30, 2016 and December 31, 2015, respectively.

The following tables summarize the notional amounts and respective fair values of Corning’s derivative financial instruments on a gross basis for September 30, 2016 and December 31, 2015 (in millions):

	U.S. Dollar		Asset derivatives			Liability derivatives
	Gross notional amount		Balance sheet location	Fair value		Balance sheet location	Fair value
	Sept. 30, 2016	Dec. 31, 2015		Sept. 30, 2016	Dec. 31, 2015		Sept. 30, 2016	Dec. 31, 2015
Derivatives designated as hedging instruments
Foreign exchange contracts  (1)	$    527	$    782	Other current assets	$     1	$     5	Other accrued liabilities	$    (54)	$  (10)
			Other assets		1	Other liabilities	(12)	(23)
Interest rate contracts	550	550	Other assets	7		Other liabilities		(4)
Derivatives not designated as hedging instruments
Foreign exchange contracts, other	759	1,095	Other current assets	2	6	Other accrued liabilities	(36)	(12)
Translated earnings contracts	17,595	11,972	Other current assets	66	511	Other accrued liabilities	(114)	(33)
			Other assets	27	472	Other liabilities	(1,531)	(61)
Total derivatives	$19,431	$14,399		$103	$995		$(1,747)	$(143)

(1) Cash flow hedges with a typical duration of 24 months or less.

The following tables summarize the effect of derivative financial instruments on Corning’s consolidated financial statements for the three months ended September 30, 2016 and 2015 (in millions):

	Effect of designated derivative instruments on the consolidated financial statements for the three months ended September 30
Derivatives in hedging relationships	Gain/(loss) recognized in other comprehensive income (OCI)				Location of gain/(loss) reclassified from accumulated OCI into income (effective)	Gain/(loss) reclassified from accumulated OCI into income (effective)  (1)
	2016		2015			2016		2015
Interest rate hedges					Sales	$	1	$	4
					Cost of sales		(13)		1
Foreign exchange contracts	$	26	$	(58)
Total cash flow hedges	$	26	$	(58)		$	(12)	$	5

(1) The amount of hedge ineffectiveness at September 30, 2016 and 2015 was insignificant.

The following tables summarize the effect of derivative financial instruments on Corning’s consolidated financial statements for the nine months ended September 30, 2016 and 2015 (in millions):

	Effect of  derivative instruments on the consolidated financial statements for the nine months ended September 30
Derivatives in hedging relationships	Gain/(loss) recognized in other comprehensive income (OCI)				Location of gain/(loss) reclassified from accumulated OCI into income (effective)	Gain/(loss) reclassified from accumulated OCI into income (effective)  (1)
	2016		2015			2016		2015
Interest rate hedges			$	(7)	Sales	$	2	$	14
					Cost of sales		(27)		7
Foreign exchange contracts	$	(37)		(24)
Total cash flow hedges	$	(37)	$	(31)		$	(25)	$	21

(1) The amount of hedge ineffectiveness at September 30, 2016 and 2015 was insignificant.

The following table summarizes the effect on the consolidated financial statements relating to Corning’s derivative financial instruments (in millions):

Undesignated derivatives	Location of gain/(loss) recognized in income	Gain (loss) recognized in income
		Three months ended September 30,				Nine months ended September 30,
		2016		2015		2016		2015
Foreign exchange contracts – balance sheet	Foreign currency hedge gain (loss), net	$	1	$	(6)	$	(27)	$	7
Foreign exchange contracts – loans	Foreign currency hedge gain (loss), net		(4)		1		(48)		3
Foreign currency hedges related to translated earnings	Foreign currency hedge gain (loss), net		(237)		(149)		(2,295)		42
Total undesignated		$	(240)	$	(154)	$	(2,370)	$	52

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Note 14 - Fair Value Measurements

9 Months Ended

Sep. 30, 2016

Notes to Financial Statements

Fair Value Disclosures [Text Block]

14.      Fair Value Measurements

Fair value standards under U.S. GAAP define fair value, establish a framework for measuring fair value in applying generally accepted accounting principles, and require disclosures about fair value measurements.  The standards also identify two kinds of inputs that are used to determine the fair value of assets and liabilities: observable and unobservable.  Observable inputs are based on market data or independent sources while unobservable inputs are based on the Company’s own market assumptions.  Once inputs have been characterized, the inputs are prioritized into one of three broad levels (provided in the table below) used to measure fair value.  Fair value standards apply whenever an entity is measuring fair value under other accounting pronouncements that require or permit fair value measurement and require the use of observable market data when available.

The following tables provide fair value measurement information for the Company’s major categories of financial assets and liabilities measured on a recurring basis (in millions):

			Fair value measurements at reporting date using
	September 30, 2016		Quoted prices in active markets for identical assets (Level 1)	Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Current assets:
Other current assets  (1)	$	68		$	68
Non-current assets:
Other assets  (1)(2)	$	350		$	64	$	286
Current liabilities:
Other accrued liabilities  (1)	$	204		$	204
Non-current liabilities:
Other liabilities  (1)	$	1,543		$	1,543

(1) Derivative assets and liabilities include foreign exchange forward and zero-cost collar contracts, and interest rate swaps which are measured using observable quoted prices for similar assets and liabilities.

(2) Other assets include asset-backed securities which are measured using observable quoted prices for similar assets and contingent consideration assets or liabilities which are measured by applying an option pricing model using projected future revenue and forecasted foreign exchange rates.

			Fair value measurements at reporting date using
	December 31, 2015		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Current assets:
Short-term investments	$	100	$	100
Other current assets  (1)	$	522			$	522
Non-current assets:
Other assets  (1)(2)	$	752			$	506	$	246
Current liabilities:
Other accrued liabilities  (1)	$	55			$	55
Non-current liabilities:
Other liabilities  (1)	$	98			$	88	$	10

(1) Derivative assets and liabilities include foreign exchange contracts which are measured using observable quoted prices for similar assets and liabilities.

(2) Other assets include asset-backed securities which are measured using observable quoted prices for similar assets and contingent consideration assets or liabilities which are measured by applying an option pricing model using projected future revenues.

As a result of the acquisition of Samsung Corning Precision Materials in January 2014, the Company has contingent consideration that was measured using unobservable (Level 3) inputs.  Changes in the fair value of the contingent consideration in future periods are valued using an option pricing model and are recorded in Corning’s results in the period of the change.  As of September 30, 2016 and December 31, 2015, the fair value of the potential receipt of the contingent consideration in 2018 was $286 million and $246 million, respectively.

There were no significant financial assets and liabilities measured on a nonrecurring basis during the nine months ended September 30, 2016.

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Note 15 - Shareholders' Equity

9 Months Ended

Sep. 30, 2016

Notes to Financial Statements

Stockholders' Equity Note Disclosure [Text Block]

15.      Shareholders’ Equity

Fixed Rate Cumulative Convertible Preferred Stock, Series A

On January 15, 2014, Corning designated a new series of its preferred stock as Fixed Rate Cumulative Convertible Preferred Stock, Series A, par value $100 per share, and issued 2,300 shares of Preferred Stock at an issue price of $1 million per share, for an aggregate issue price of $2.3 billion.  The Preferred Stock is convertible at the option of the holder and the Company upon certain events, at a conversion rate of 50,000 shares of Corning’s common stock per one share of Preferred Stock, subject to certain anti-dilution provisions.  As of September 30, 2016, the Preferred Stock has not been converted, and none of the anti-dilution provisions have been triggered.

Share Repurchases

On July 28, 2016, Corning entered into an accelerated share repurchase transaction (“ASR”) with Morgan Stanley & Co. LLC (“Morgan Stanley”) to repurchase $2 billion of Corning’s common stock in two tranches of $1.5 billion and $500 million, respectively, each with its own scheduled termination date.  The ASR was executed under the $4 billion share repurchase program authorized on October 26, 2015 (the “2015 Repurchase Program”).  Under the ASR, Corning made a $2 billion aggregate payment to Morgan Stanley on July 28, 2016 and received an initial aggregate delivery of 74.4 million shares of Corning common stock from Morgan Stanley on the same day.  Each tranche is subject to acceleration at Morgan Stanley’s option during an acceleration period prior to its scheduled termination date.  The total number of shares Corning will repurchase under each tranche of the ASR will be based generally upon the average daily volume weighted average price of Corning’s common stock during the repurchase period for such tranche, less a discount and subject to adjustments pursuant to the terms and conditions of the ASR.  Depending on the circumstances at settlement of each tranche, Morgan Stanley may be required to deliver additional shares of common stock to Corning or Corning may be required either to deliver shares of common stock or to make a cash payment to Morgan Stanley.  Final settlement of both tranches of the ASR is scheduled to occur in the fourth quarter of 2016.

In addition to the ASR, during the three and nine months ended September 30, 2016, the Company repurchased 15.3 million and 96 million shares of common stock on the open market for approximately $340 million and $1,901 million, respectively, as part of its 2015 Repurchase Program.

Accumulated Other Comprehensive Income

In the three and nine months ended September 30, 2016 and 2015, the primary changes in accumulated other comprehensive income (“AOCI”) were related to the foreign currency translation adjustment component and the unamortized actuarial losses component.

A summary of changes in the foreign currency translation adjustment component of AOCI is as follows (in millions):

	Three months ended September 30,				Nine months ended September 30,
	2016		2015		2016		2015
Beginning balance	$	(547)	$	(877)	$	(1,171)	$	(581)
Other comprehensive income (loss)		235		(163)		860		(399)
Equity method affiliates		10		(18)		9		(78)
Net current-period other comprehensive income (loss)		245		(181)		869		(477)
Ending balance	$	(302)	$	(1,058)	$	(302)	$	(1,058)

In the second quarter of 2016, $45 million cumulative foreign currency translation gain was released as a result of the realignment of Dow Corning and included in the gain on realignment of equity investment.

In the second quarter of 2016, a $22 million cumulative foreign currency translation loss was released as a result of the contribution of our investment in PCE to the PCC litigation trust and included in selling, general and administrative expenses.

There were no material tax effects related to foreign currency translation gains and losses for the three months ended September 30, 2016 and 2015, and for the nine months ended September 30, 2015.  In the nine months ended September 30, 2016, Corning recorded a tax impact of $45 million related to foreign currency translation gains and losses.

A summary of changes in the unamortized actuarial gains (losses) component of AOCI is as follows (in millions)

(1):

	Three months ended September 30,				Nine months ended September 30,
	2016		2015		2016		2015
Beginning balance	$	(323)	$	(703)	$	(588)	$	(709)
Other comprehensive (loss) income before reclassifications  (2)		(31)		(1)		(64)		5
Amounts reclassified from accumulated other comprehensive income  (2)		26		1		60		11
Equity method affiliates  (3)				6		264		(4)
Net current-period other comprehensive income		(5)		6		260		12
Ending balance	$	(328)	$	(697)	$	(328)	$	(697)

(1) All amounts are after tax.  Amounts in parentheses indicate debits to accumulated other comprehensive income.

(2) Tax effects are not significant.

(3) For the three months ended September 30, 2016, tax effects are not significant.  For the nine months ended September 30, 2016, amounts are net of total tax expense of $19 million.  For the three and nine months ended September 30, 2015, tax effects are not significant.

In the second quarter of 2016, a $260 million cumulative unamortized actuarial loss, net of tax of $19 million, was released as a result of the realignment of Dow Corning and included in the gain on realignment of equity investment.

In the second quarter of 2016, a $2 million cumulative unamortized actuarial loss was released as a result of the contribution of our investment in PCE to the PCC litigation trust and included in selling, general and administrative expenses.

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Note 16 - Share-based Compensation

9 Months Ended

Sep. 30, 2016

Notes to Financial Statements

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

16.      Share-based Compensation

Stock Compensation Plans

The Company measures and recognizes compensation cost for all share-based payment awards made to employees and directors based on estimated fair values.  Fair values for stock options were estimated using a multiple-point Black-Scholes valuation model.  Share-based compensation cost was approximately $10 million and $11 million for the three months ended September 30, 2016 and 2015, respectively, and approximately $33 million and $36 million for the nine months ended September 30, 2016 and 2015, respectively.  Amounts for all periods presented included compensation expense for employee stock options and time-based restricted stock and restricted stock units.

Stock Options

Corning’s stock option plans provide non-qualified and incentive stock options to purchase authorized but unissued shares, or treasury shares, at the market price on the grant date and generally become exercisable in installments from one to five years from the grant date.  The maximum term of non-qualified and incentive stock options is 10 years from the grant date.

The following table summarizes information concerning stock options outstanding including the related transactions under the stock option plans for the nine months ended September 30, 2016:

	Number of Shares (in thousands)	Weighted- Average Exercise Price	Weighted- Average Remaining Contractual Term in Years	Aggregate Intrinsic Value (in thousands)
Options Outstanding as of December 31, 2015	42,738	$19.40
Granted	1,669	19.98
Exercised	(5,838)	15.63
Forfeited and Expired	(4,317)	26.02
Options Outstanding as of September 30, 2016	34,252	19.24	3.96	$164,226
Options Expected to Vest as of September 30, 2016	34,208	19.23	3.95	164,091
Options Exercisable as of September 30, 2016	29,475	18.99	3.21	150,477

The aggregate intrinsic value (market value of stock less option exercise price) in the preceding table represents the total pretax intrinsic value, based on the Company’s closing stock price on September 30, 2016, which would have been received by the option holders had all option holders exercised their “in-the-money” options as of that date.

As of September 30, 2016, there was approximately $7 million of unrecognized compensation cost related to stock options granted under the plans.  The cost is expected to be recognized over a weighted-average period of 1.8 years.  Compensation cost related to stock options was approximately $2 million for the three months ended September 30, 2016 and 2015, respectively, and approximately $10 million and $13 million for the nine months ended September 30, 2016 and 2015, respectively.

Proceeds received from the exercise of stock options were $86 million and $99 million for the nine months ended September 30, 2016 and 2015, respectively.  Proceeds received from the exercise of stock options were included in financing activities on the Company’s Consolidated Statements of Cash Flows.  The total intrinsic value of options exercised for the nine months ended September 30, 2016 and 2015 was approximately $36 million and $46 million, respectively.  The income tax benefit realized from share-based compensation was not significant for the three and nine months ended September 30, 2016 and 2015, respectively.  Refer to Note 5 (Income Taxes) to the Consolidated Financial Statements.

The following inputs were used for the valuation of option grants under our stock option plans:

	Three months ended September 30,		Nine months ended September 30,
	2016	2015	2016			2015
Expected volatility	38.6%	44.2%	38.6	-	43.1%	44.2	-	44.9%
Weighted-average volatility	38.6%	44.2%	38.6	-	43.1%	44.2	-	44.9%
Expected dividends	2.34%	2.67%	2.34	-	2.94%	1.92	-	2.67%
Risk-free rate	1.4%	2.0%	1.4	-	1.6%	1.9	-	2.0%
Average risk-free rate	1.4%	2.0%	1.4	-	1.6%	1.9	-	2.0%
Expected term (in years)	7.4	7.2	7.4	-	7.4	7.2	-	7.2
Pre-vesting departure rate	0.6%	0.6%	0.6	-	0.6%	0.6	-	0.6%

Expected volatility is based on a blended approach defined as the weighted average of the short-term implied volatility, the most recent volatility for the period equal to the expected term, and the most recent 15-year historical volatility.  The expected term assumption is the period of time the options are expected to be outstanding, and is calculated using a combination of historical exercise experience adjusted to reflect the current vesting period of options being valued, and partial life cycles of outstanding options.  The risk-free rate assumption is the implied rate for a zero-coupon U.S. Treasury bond with a term equal to the option’s expected term.

Incentive Stock Plans

The Corning Incentive Stock Plan permits restricted stock and restricted stock unit grants, either determined by specific performance goals or issued directly, in most instances, subject to the possibility of forfeiture and without cash consideration.  Restricted stock and restricted stock units under the Incentive Stock Plan are granted at the closing market price on the grant date, contingently vest over a period of generally one to ten years, and generally have contractual lives of one to ten years.  The fair value of each restricted stock grant or restricted stock unit awarded under the Incentive Stock Plan is based on the grant date closing price of the Company’s stock.

Time-Based Restricted Stock and Restricted Stock Units:

Time-based restricted stock and restricted stock units are issued by the Company on a discretionary basis, and are payable in shares of the Company’s common stock upon vesting.  The fair value is based on the closing market price of the Company’s stock on the grant date.  Compensation cost is recognized over the requisite vesting period and adjusted for actual forfeitures before vesting.

The following table represents a summary of the status of the Company’s non-vested time-based restricted stock and restricted stock units as of December 31, 2015, and changes which occurred during the nine months ended September 30, 2016:

	Shares (000’s)	Weighted Average Grant-Date Fair Value
Non-vested shares and share units at December 31, 2015	5,242	$	17.91
Granted	1,415		20.57
Vested	(1,802)		14.48
Forfeited	(75)		20.78
Non-vested shares and share units at September 30, 2016	4,780	$	19.95

As of September 30, 2016, there was approximately $31 million of unrecognized compensation cost related to non-vested time-based restricted stock and restricted stock units compensation arrangements granted under the Plan.  The cost is expected to be recognized over a weighted-average period of 1.9 years.  Compensation cost related to time-based restricted stock and restricted stock units was approximately $8 million and $9 million for the three months ended September 30, 2016 and 2015, respectively, and approximately $23 million for the nine months ended September 30, 2016 and 2015, respectively.

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Note 17 - Reportable Segments

9 Months Ended

Sep. 30, 2016

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

17.      Reportable Segments

Our reportable segments are as follows:

·   Display Technologies – manufactures glass substrates primarily for flat panel liquid crystal displays.

·   Optical Communications – manufactures carrier and enterprise network components for the telecommunications industry.

·   Environmental Technologies – manufactures ceramic substrates and filters for automotive and diesel emission control applications.

·   Specialty Materials – manufactures products that provide more than 150 material formulations for glass, glass ceramics and fluoride crystals to meet demand for unique customer needs.

·   Life Sciences – manufactures glass and plastic labware, equipment, media and reagents enabling workflow solutions for scientific applications.

All other segments that do not meet the quantitative threshold for separate reporting have been grouped as “All Other.”  This group is primarily comprised of the results of Corning’s Pharmaceutical Technologies business, which consists of a pharmaceutical glass business and a glass tubing business used in the pharmaceutical packaging industry.  This segment also includes Corning Precision Materials’ non-LCD business and new product lines and development projects, as well as certain corporate investments such as Eurokera and Keraglass equity affiliates.

We prepared the financial results for our reportable segments on a basis that is consistent with the manner in which we internally disaggregate financial information to assist in making internal operating decisions.  We included the earnings of equity affiliates that are closely associated with our reportable segments in the respective segment’s net income.  We have allocated certain common expenses among reportable segments differently than we would for stand-alone financial information.  Segment net income may not be consistent with measures used by other companies.  The accounting policies of our reportable segments are the same as those applied in the consolidated financial statements.

Reportable Segments

(in millions)

		Display Technologies		Optical Communications		Environmental Technologies		Specialty Materials		Life Sciences		All Other		Total
Three months ended   September 30, 2016
	Net sales	$	902	$	795	$	264	$	295	$	214	$	37	$	2,507
	Depreciation  (1)	$	152	$	41	$	32	$	26	$	14	$	12	$	277
	Amortization of purchased intangibles			$	10					$	5	$	2	$	17
	Research, development and engineering expenses  (2)	$	14	$	37	$	24	$	31	$	6	$	47	$	159
	Equity in earnings of affiliated companies											$	(3)	$	(3)
	Income tax (provision) benefit	$	(98)	$	(49)	$	(17)	$	(21)	$	(8)	$	21	$	(172)
	Net income (loss)  (3)	$	279	$	78	$	35	$	42	$	16	$	(47)	$	403

		Display Technologies		Optical Communications		Environmental Technologies		Specialty Materials		Life Sciences		All Other		Total
Three months ended   September 30, 2015
	Net sales	$	757	$	747	$	257	$	288	$	211	$	12	$	2,272
	Depreciation  (1)	$	147	$	41	$	32	$	29	$	15	$	9	$	273
	Amortization of purchased intangibles			$	7					$	5			$	12
	Research, development and engineering expenses  (2)	$	28	$	33	$	21	$	27	$	6	$	34	$	149
	Equity in earnings of affiliated companies	$	(3)									$	4	$	1
	Income tax (provision) benefit	$	(119)	$	(34)	$	(19)	$	(23)	$	(9)	$	19	$	(185)
	Net income (loss)  (3)	$	255	$	70	$	38	$	46	$	18	$	(38)	$	389

		Display Technologies		Optical Communications		Environmental Technologies		Specialty Materials		Life Sciences		All Other		Total
Nine months ended   September 30, 2016
	Net sales	$	2,408	$	2,186	$	787	$	788	$	633	$	112	$	6,914
	Depreciation  (1)	$	452	$	125	$	97	$	81	$	42	$	34	$	831
	Amortization of purchased intangibles			$	25					$	15	$	6	$	46
	Research, development and engineering expenses  (2)	$	49	$	110	$	75	$	96	$	18	$	139	$	487
	Restructuring, impairment and other charges	$	4	$	6	$	5	$	12	$	3	$	40	$	70
	Equity in earnings of affiliated companies											$	(8)	$	(8)
	Income tax (provision) benefit	$	(277)	$	(99)	$	(52)	$	(52)	$	(22)	$	87	$	(415)
	Net income (loss)  (3)	$	692	$	172	$	106	$	106	$	45	$	(187)	$	934

		Display Technologies		Optical Communications		Environmental Technologies		Specialty Materials		Life Sciences		All Other		Total
Nine months ended   September 30, 2015
	Net sales	$	2,354	$	2,244	$	799	$	832	$	619	$	32	$	6,880
	Depreciation  (1)	$	455	$	122	$	93	$	82	$	45	$	29	$	826
	Amortization of purchased intangibles			$	24					$	15			$	39
	Research, development and engineering expenses  (2)	$	78	$	101	$	67	$	87	$	17	$	123	$	473
	Equity in earnings of affiliated companies	$	(8)									$	12	$	4
	Income tax (provision) benefit	$	(387)	$	(100)	$	(64)	$	(66)	$	(26)	$	63	$	(580)
	Net income (loss)  (3)	$	852	$	204	$	132	$	128	$	52	$	(131)	$	1,237

(1) Depreciation expense for Corning’s reportable segments includes an allocation of depreciation of corporate property not specifically identifiable to a segment.

(2) Research, development and engineering expenses include direct project spending that is identifiable to a segment.

(3) Many of Corning’s administrative and staff functions are performed on a centralized basis.  Where practicable, Corning charges these expenses to segments based upon the extent to which each business uses a centralized function.  Other staff functions, such as corporate finance, human resources and legal, are allocated to segments, primarily as a percentage of sales.  Expenses that are not allocated to the segments are included in the reconciliation of reportable net segment net income to consolidated net income below.

A reconciliation of reportable segment net income to consolidated net income follows (in millions):

	Three months ended September 30,				Nine months ended September 30,
	2016		2015		2016		2015
Net income of reportable segments	$	450	$	427	$	1,121	$	1,368
Net loss of All Other		(47)		(38)		(187)		(131)
Unallocated amounts:
Net financing costs  (1)		(26)		(31)		(84)		(80)
Stock-based compensation expense		(10)		(11)		(33)		(36)
Exploratory research		(27)		(32)		(82)		(86)
Corporate contributions		(15)		(13)		(38)		(37)
Gain on realignment of equity investment						2,676
Equity in earnings of affiliated companies, net of impairments  (2)		22		38		126		191
Unrealized loss on foreign currency hedges related to translated earnings		(239)		(317)		(2,441)		(447)
Resolution of Department of Justice investigation						(98)
Income tax benefit		199		178		1,253		375
Other corporate items		(23)		11		(90)		(2)
Net income	$	284	$	212	$	2,123	$	1,115

(1) Net financing costs include interest income, interest expense, and interest costs and investment gains and losses associated with benefit plans.

(2) Through May 31, 2016, the date of the strategic realignment of our equity interest in Dow Corning, this amount primarily represents the equity earnings of Dow Corning.

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Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2016

Accounting Policies [Abstract]

Consolidation, Policy [Policy Text Block]

Basis of Presentation

In these notes, the terms “Corning,” “Company,” “we,” “us,” or “our” mean Corning Incorporated and its subsidiary companies.

The accompanying unaudited consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”) for interim financial information.  Certain information and note disclosures normally included in financial statements prepared in accordance with GAAP have been omitted or condensed.  These interim consolidated financial statements should be read in conjunction with Corning’s consolidated financial statements and notes thereto included in its Annual Report on Form 10-K for the year ended December 31, 2015 (“2015 Form 10-K”).

The unaudited consolidated financial statements reflect all adjustments which, in the opinion of management, are necessary for a fair statement of the results of operations, financial position and cash flows for the interim periods presented.  All such adjustments are of a normal recurring nature.  The results for interim periods are not necessarily indicative of results which may be expected for any other interim period or for the full year.

Certain prior year amounts have been reclassified to conform to the current-year presentation.  These reclassifications had no impact on our results of operations, financial position, or changes in shareholders’ equity.

New Accounting Pronouncements, Policy [Policy Text Block]

New Accounting Standards

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. (“ASU”) 2014-09, Revenue from Contracts with Customers, as a new Topic, Accounting Standards Codification (“ASC”) Topic 606.  The new revenue recognition standard provides a five-step analysis of transactions to determine when and how revenue is recognized.  The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.  This ASU originally was effective for annual periods beginning after December 15, 2016, including interim periods within that reporting period.  This ASU shall be applied retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption.

In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606), deferring the effective date of ASU 2014-09 by one year.  We can elect to adopt the provisions of ASU 2014-09 for annual periods beginning after December 15, 2017, including interim periods within that reporting period.  The FASB also agreed to allow entities to choose to adopt the standard as of the original effective date.  We are currently assessing the adoption date and potential impact of adopting ASU 2014-09 on our financial statements and related disclosures.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which supersedes all existing guidance on accounting for leases in ASC Topic 840.  ASU 2016-02 is intended to provide enhanced transparency and comparability by requiring lessees to record right-of-use assets and corresponding lease liabilities on the balance sheet.  ASU 2016-02 will continue to classify leases as either finance or operating, with classification affecting the pattern of expense recognition in the statement of income.  ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years.  Early adoption is permitted.  ASU 2016-02 is required to be applied with a modified retrospective approach to each prior reporting period presented with various optional practical expedients.  We are currently assessing the adoption date and the potential impact of adopting ASU 2016-02 on our financial statements and related disclosures.

In March 2016, the FASB issued ASU 2016-09, Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting.  ASU 2016-09 changes how companies account for certain aspects of share-based payment awards to employees, including the accounting for income taxes, forfeitures and statutory tax withholding requirements, as well as classification in the statement of cash flows.  ASU 2016-09 is effective for annual periods beginning after December 15, 2016, including interim periods within those annual periods.  If an entity early adopts in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period and the entity must adopt all of the amendments from ASU 2016-09 in the same period.  We are currently assessing the potential impact of adopting ASU 2016-09 on our financial statements and related disclosures.  Corning does not expect adoption of this standard to have a material impact on its consolidated results of operations and financial condition.

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments.  ASU 2016-15 refines how companies classify certain aspects of the cash flow statement in regards to debt prepayment, settlement of debt instruments, contingent consideration payments, proceeds from insurance claims and life insurance policies, distribution from equity method investees, beneficial interests in securitization transactions and separately identifiable cash flows.  ASU 2016-15 is effective for annual periods beginning after December 15, 2017, and for interim periods within fiscal years beginning after December 15, 2018.  Early adoption is permitted.  We are currently assessing the adoption date and the potential impact of adopting ASU 2016-15 on our financial statements and related disclosures.

In October 2016, the FASB issued ASU No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory, which reduces the complexity in the accounting standards by allowing the recognition of current and deferred income taxes for an intra-entity asset transfer, other than inventory, when the transfer occurs. Historically, recognition of the income tax consequence was not recognized until the asset was sold to an outside party.  This amendment should be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption.  ASU 2016-16 is effective for annual periods beginning after December 15, 2017, including interim reporting periods within those annual reporting periods.  Early adoption is permitted for all entities as of the beginning of an annual reporting period for which financial statements (interim or annual) have not been issued or made available for issuance.  We are currently evaluating the impact of ASU 2016-16 on our consolidated financial statements and related disclosures.

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Note 2 - Restructuring, Impairment and Other Charges (Tables)

9 Months Ended

Sep. 30, 2016

Notes Tables

Schedule of Restructuring Reserve by Type of Cost [Table Text Block]

	Reserve at January 1, 2016		Net Charges/ Reversals		Non-cash adjustments		Cash payments		Reserve at September 30, 2016
Restructuring:
Employee related costs	$	3	$	15	$	(1)	$	(9)	$	8
Other charges				1				(1)
Total restructuring activity	$	3	$	16	$	(1)	$	(10)	$	8
Disposal of long-lived assets			$	62
Total restructuring, impairment and other charges			$	78

Restructuring and Related Costs [Table Text Block]

Operating segment	Employee- related and other charges
Display Technologies	$	4
Optical Communications		6
Environmental Technologies		5
Specialty Materials		12
Life Sciences		3
All Other		40
Corporate		8
Total restructuring, impairment and other charges	$	78

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Note 3 - Commitments, Contingencies, and Guarantees (Tables)

9 Months Ended

Sep. 30, 2016

Notes Tables

Schedule of Loss Contingencies by Contingency [Table Text Block]

	Amended PCC Plan				Non-PCC		Total Asbestos Litigation Liability
	Equity Interests		Fixed Series of Payments
Fair Value of Asbestos Litigation Liability as of Dec. 31, 2015	$	238	$	290	$	150	$	678
Less: Contribution of PCC & PCE Equity Interests - Carrying Value		182		-		-		182
Gain on Contribution of Equity Interests		56		-		-		56
Asbestos Litigation Liability as of September 30, 2016	$	-	$	290	$	150	$	440

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Note 5 - Income Taxes (Tables)

9 Months Ended

Sep. 30, 2016

Notes Tables

Schedule of Income Tax Provisions and Rates [Table Text Block]

	Three months ended September 30,				Nine months ended September 30,
	2016		2015		2016		2015
Benefit (provision) for income taxes	$	27	$	(6)	$	835	$	(202)
Effective tax rate		(10.5%)		2.8%		(64.8%)		15.3%

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Note 6 - Earnings Per Common Share (Tables)

9 Months Ended

Sep. 30, 2016

Notes Tables

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

	Three months ended September 30,				Nine months ended September 30,
	2016		2015		2016		2015
Net income attributable to Corning Incorporated	$	284	$	212	$	2,123	$	1,115
Less:  Series A convertible preferred stock dividend		24		24		73		73
Net income available to common stockholders – basic		260		188		2,050		1,042
Plus:  Series A convertible preferred stock dividend  (1)		24				73		73
Net income available to common stockholders – diluted	$	284	$	188	$	2,123	$	1,115
Weighted-average common shares outstanding – basic		978		1,210		1,046		1,241
Effect of dilutive securities:
Stock options and other dilutive securities		9		8		9		10
Series A convertible preferred stock  (1)		115				115		115
Weighted-average common shares outstanding – diluted		1,102		1,218		1,170		1,366
Basic earnings per common share	$	0.27	$	0.16	$	1.96	$	0.84
Diluted earnings per common share	$	0.26	$	0.15	$	1.81	$	0.82
Antidilutive potential shares excluded from diluted earnings per common share:
Series A convertible preferred stock  (1)				115
Employee stock options and awards		13		29		18		22
Accelerated share repurchase forward contract		14				14
Total		27		144		32		22

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Note 8 - Inventories, Net of Inventory Reserves (Tables)

9 Months Ended

Sep. 30, 2016

Notes Tables

Schedule of Inventory, Current [Table Text Block]

	September 30, 2016		December 31, 2015
Finished goods	$	636	$	633
Work in process		301		264
Raw materials and accessories		278		200
Supplies and packing materials		301		288
Total inventories, net of inventory reserves	$	1,516	$	1,385

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Note 9 - Investments (Tables)

9 Months Ended

Sep. 30, 2016

Notes Tables

Investment Gain on Realignment [Table Text Block]

Cash	$	4,818
Carrying Value of Dow Corning Equity Investment		(1,560)
Carrying Value of HSG Equity Investment		(383)
Other  (1)		(199)
Gain	$	2,676

Equity Method Investments [Table Text Block]

	Ownership interest			September 30, 2016		December 31, 2015
Affiliated companies accounted for by the equity method
Dow Corning  (1)		50%				$	1,483
All other  (1)	20%	to	50%	$	285		422
					285		1,905
Other investments					67		70
Subtotal Investment Assets				$	352	$	1,975
Affiliated companies accounted for by the equity method
HSG  (2)(3)		50%		$	343
Subtotal Investment Liabilities				$	343

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Note 10 - Goodwill and Other Intangible Assets (Tables)

9 Months Ended

Sep. 30, 2016

Notes Tables

Schedule of Goodwill [Table Text Block]

	Optical Communications		Display Technologies		Specialty Materials		Life Sciences		All Other		Total
Balance at December 31, 2015	$	439	$	128	$	150	$	562	$	101	$	1,380
Acquired goodwill  (1)		175										175
Measurement period adjustment  (2)		(6)										(6)
Foreign currency translation adjustment		7		5				6		2		20
Balance at September 30, 2016	$	615	$	133	$	150	$	568	$	103	$	1,569

Schedule of Finite-Lived Intangible Assets [Table Text Block]

	September 30, 2016						December 31, 2015
	Gross		Accumulated amortization		Net		Gross		Accumulated amortization		Net
Amortized intangible assets:
Patents, trademarks, and trade names	$	367	$	176	$	191	$	350	$	162	$	188
Customer lists and other		744		138		606		621		103		518
Total	$	1,111	$	314	$	797	$	971	$	265	$	706

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Note 11 - Employee Retirement Plans (Tables)

9 Months Ended

Sep. 30, 2016

Notes Tables

Schedule of Net Benefit Costs [Table Text Block]

	Pension benefits								Postretirement benefits
	Three months ended September 30,				Nine months ended September 30,				Three months ended September 30,				Nine months ended September 30,
	2016		2015		2016		2015		2016		2015		2016		2015
Service cost	$	22	$	22	$	65	$	67	$	3	$	3	$	7	$	10
Interest cost		31		36		93		109		6		8		19		24
Expected return on plan assets		(41)		(44)		(124)		(133)
Amortization of net loss												1		(1)		3
Amortization of prior service cost (credit)		1		2		4		5		(1)		(2)		(3)		(5)
Recognition of actuarial loss		26				60		8
Total pension and postretirement benefit expense	$	39	$	16	$	98	$	56	$	8	$	10	$	22	$	32

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Note 12 - Other Liabilities (Tables)

9 Months Ended

Sep. 30, 2016

Notes Tables

Other Liabilities [Table Text Block]

	September 30, 2016		December 31, 2015
Current liabilities:
Wages and employee benefits	$	472	$	491
Income taxes		149		53
Asbestos and other litigation reserves		73		238
Derivative instruments		204		55
Other current liabilities		456		471
Other accrued liabilities	$	1,354	$	1,308
Non-current liabilities:
Asbestos and other litigation reserves	$	394	$	440
Derivative instruments		1,543		88
Investment in Hemlock Semiconductor Group  (1)		343
Defined benefit pension plan liabilities		762		672
Other non-current liabilities		1,062		1,042
Other liabilities	$	4,104	$	2,242

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Note 13 - Hedging Activities (Tables)

9 Months Ended

Sep. 30, 2016

Not Designated as Hedging Instrument [Member]

Notes Tables

Schedule of Derivative Instruments, Effect on Other Comprehensive Income (Loss) [Table Text Block]

Undesignated derivatives	Location of gain/(loss) recognized in income	Gain (loss) recognized in income
		Three months ended September 30,				Nine months ended September 30,
		2016		2015		2016		2015
Foreign exchange contracts – balance sheet	Foreign currency hedge gain (loss), net	$	1	$	(6)	$	(27)	$	7
Foreign exchange contracts – loans	Foreign currency hedge gain (loss), net		(4)		1		(48)		3
Foreign currency hedges related to translated earnings	Foreign currency hedge gain (loss), net		(237)		(149)		(2,295)		42
Total undesignated		$	(240)	$	(154)	$	(2,370)	$	52

Designated as Hedging Instrument [Member]

Notes Tables

Schedule of Derivative Instruments, Effect on Other Comprehensive Income (Loss) [Table Text Block]

	Effect of designated derivative instruments on the consolidated financial statements for the three months ended September 30
Derivatives in hedging relationships	Gain/(loss) recognized in other comprehensive income (OCI)				Location of gain/(loss) reclassified from accumulated OCI into income (effective)	Gain/(loss) reclassified from accumulated OCI into income (effective)  (1)
	2016		2015			2016		2015
Interest rate hedges					Sales	$	1	$	4
					Cost of sales		(13)		1
Foreign exchange contracts	$	26	$	(58)
Total cash flow hedges	$	26	$	(58)		$	(12)	$	5

	Effect of  derivative instruments on the consolidated financial statements for the nine months ended September 30
Derivatives in hedging relationships	Gain/(loss) recognized in other comprehensive income (OCI)				Location of gain/(loss) reclassified from accumulated OCI into income (effective)	Gain/(loss) reclassified from accumulated OCI into income (effective)  (1)
	2016		2015			2016		2015
Interest rate hedges			$	(7)	Sales	$	2	$	14
					Cost of sales		(27)		7
Foreign exchange contracts	$	(37)		(24)
Total cash flow hedges	$	(37)	$	(31)		$	(25)	$	21

Schedule of Notional Amounts of Outstanding Derivative Positions [Table Text Block]

	U.S. Dollar		Asset derivatives			Liability derivatives
	Gross notional amount		Balance sheet location	Fair value		Balance sheet location	Fair value
	Sept. 30, 2016	Dec. 31, 2015		Sept. 30, 2016	Dec. 31, 2015		Sept. 30, 2016	Dec. 31, 2015
Derivatives designated as hedging instruments
Foreign exchange contracts  (1)	$    527	$    782	Other current assets	$     1	$     5	Other accrued liabilities	$    (54)	$  (10)
			Other assets		1	Other liabilities	(12)	(23)
Interest rate contracts	550	550	Other assets	7		Other liabilities		(4)
Derivatives not designated as hedging instruments
Foreign exchange contracts, other	759	1,095	Other current assets	2	6	Other accrued liabilities	(36)	(12)
Translated earnings contracts	17,595	11,972	Other current assets	66	511	Other accrued liabilities	(114)	(33)
			Other assets	27	472	Other liabilities	(1,531)	(61)
Total derivatives	$19,431	$14,399		$103	$995		$(1,747)	$(143)

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Note 14 - Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2016

Notes Tables

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block]

			Fair value measurements at reporting date using
	September 30, 2016		Quoted prices in active markets for identical assets (Level 1)	Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Current assets:
Other current assets  (1)	$	68		$	68
Non-current assets:
Other assets  (1)(2)	$	350		$	64	$	286
Current liabilities:
Other accrued liabilities  (1)	$	204		$	204
Non-current liabilities:
Other liabilities  (1)	$	1,543		$	1,543

			Fair value measurements at reporting date using
	December 31, 2015		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Current assets:
Short-term investments	$	100	$	100
Other current assets  (1)	$	522			$	522
Non-current assets:
Other assets  (1)(2)	$	752			$	506	$	246
Current liabilities:
Other accrued liabilities  (1)	$	55			$	55
Non-current liabilities:
Other liabilities  (1)	$	98			$	88	$	10

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Note 15 - Shareholders' Equity (Tables)

9 Months Ended

Sep. 30, 2016

Notes Tables

Comprehensive Income (Loss) [Table Text Block]

	Three months ended September 30,				Nine months ended September 30,
	2016		2015		2016		2015
Beginning balance	$	(547)	$	(877)	$	(1,171)	$	(581)
Other comprehensive income (loss)		235		(163)		860		(399)
Equity method affiliates		10		(18)		9		(78)
Net current-period other comprehensive income (loss)		245		(181)		869		(477)
Ending balance	$	(302)	$	(1,058)	$	(302)	$	(1,058)

	Three months ended September 30,				Nine months ended September 30,
	2016		2015		2016		2015
Beginning balance	$	(323)	$	(703)	$	(588)	$	(709)
Other comprehensive (loss) income before reclassifications  (2)		(31)		(1)		(64)		5
Amounts reclassified from accumulated other comprehensive income  (2)		26		1		60		11
Equity method affiliates  (3)				6		264		(4)
Net current-period other comprehensive income		(5)		6		260		12
Ending balance	$	(328)	$	(697)	$	(328)	$	(697)

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Note 16 - Share-based Compensation (Tables)

9 Months Ended

Sep. 30, 2016

Notes Tables

Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block]

	Number of Shares (in thousands)	Weighted- Average Exercise Price	Weighted- Average Remaining Contractual Term in Years	Aggregate Intrinsic Value (in thousands)
Options Outstanding as of December 31, 2015	42,738	$19.40
Granted	1,669	19.98
Exercised	(5,838)	15.63
Forfeited and Expired	(4,317)	26.02
Options Outstanding as of September 30, 2016	34,252	19.24	3.96	$164,226
Options Expected to Vest as of September 30, 2016	34,208	19.23	3.95	164,091
Options Exercisable as of September 30, 2016	29,475	18.99	3.21	150,477

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]

	Three months ended September 30,		Nine months ended September 30,
	2016	2015	2016			2015
Expected volatility	38.6%	44.2%	38.6	-	43.1%	44.2	-	44.9%
Weighted-average volatility	38.6%	44.2%	38.6	-	43.1%	44.2	-	44.9%
Expected dividends	2.34%	2.67%	2.34	-	2.94%	1.92	-	2.67%
Risk-free rate	1.4%	2.0%	1.4	-	1.6%	1.9	-	2.0%
Average risk-free rate	1.4%	2.0%	1.4	-	1.6%	1.9	-	2.0%
Expected term (in years)	7.4	7.2	7.4	-	7.4	7.2	-	7.2
Pre-vesting departure rate	0.6%	0.6%	0.6	-	0.6%	0.6	-	0.6%

Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity [Table Text Block]

	Shares (000’s)	Weighted Average Grant-Date Fair Value
Non-vested shares and share units at December 31, 2015	5,242	$	17.91
Granted	1,415		20.57
Vested	(1,802)		14.48
Forfeited	(75)		20.78
Non-vested shares and share units at September 30, 2016	4,780	$	19.95

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Note 17 - Reportable Segments (Tables)

9 Months Ended

Sep. 30, 2016

Notes Tables

Schedule of Segment Reporting Information, by Segment [Table Text Block]

		Display Technologies		Optical Communications		Environmental Technologies		Specialty Materials		Life Sciences		All Other		Total
Three months ended   September 30, 2016
	Net sales	$	902	$	795	$	264	$	295	$	214	$	37	$	2,507
	Depreciation  (1)	$	152	$	41	$	32	$	26	$	14	$	12	$	277
	Amortization of purchased intangibles			$	10					$	5	$	2	$	17
	Research, development and engineering expenses  (2)	$	14	$	37	$	24	$	31	$	6	$	47	$	159
	Equity in earnings of affiliated companies											$	(3)	$	(3)
	Income tax (provision) benefit	$	(98)	$	(49)	$	(17)	$	(21)	$	(8)	$	21	$	(172)
	Net income (loss)  (3)	$	279	$	78	$	35	$	42	$	16	$	(47)	$	403

		Display Technologies		Optical Communications		Environmental Technologies		Specialty Materials		Life Sciences		All Other		Total
Three months ended   September 30, 2015
	Net sales	$	757	$	747	$	257	$	288	$	211	$	12	$	2,272
	Depreciation  (1)	$	147	$	41	$	32	$	29	$	15	$	9	$	273
	Amortization of purchased intangibles			$	7					$	5			$	12
	Research, development and engineering expenses  (2)	$	28	$	33	$	21	$	27	$	6	$	34	$	149
	Equity in earnings of affiliated companies	$	(3)									$	4	$	1
	Income tax (provision) benefit	$	(119)	$	(34)	$	(19)	$	(23)	$	(9)	$	19	$	(185)
	Net income (loss)  (3)	$	255	$	70	$	38	$	46	$	18	$	(38)	$	389

		Display Technologies		Optical Communications		Environmental Technologies		Specialty Materials		Life Sciences		All Other		Total
Nine months ended   September 30, 2016
	Net sales	$	2,408	$	2,186	$	787	$	788	$	633	$	112	$	6,914
	Depreciation  (1)	$	452	$	125	$	97	$	81	$	42	$	34	$	831
	Amortization of purchased intangibles			$	25					$	15	$	6	$	46
	Research, development and engineering expenses  (2)	$	49	$	110	$	75	$	96	$	18	$	139	$	487
	Restructuring, impairment and other charges	$	4	$	6	$	5	$	12	$	3	$	40	$	70
	Equity in earnings of affiliated companies											$	(8)	$	(8)
	Income tax (provision) benefit	$	(277)	$	(99)	$	(52)	$	(52)	$	(22)	$	87	$	(415)
	Net income (loss)  (3)	$	692	$	172	$	106	$	106	$	45	$	(187)	$	934

		Display Technologies		Optical Communications		Environmental Technologies		Specialty Materials		Life Sciences		All Other		Total
Nine months ended   September 30, 2015
	Net sales	$	2,354	$	2,244	$	799	$	832	$	619	$	32	$	6,880
	Depreciation  (1)	$	455	$	122	$	93	$	82	$	45	$	29	$	826
	Amortization of purchased intangibles			$	24					$	15			$	39
	Research, development and engineering expenses  (2)	$	78	$	101	$	67	$	87	$	17	$	123	$	473
	Equity in earnings of affiliated companies	$	(8)									$	12	$	4
	Income tax (provision) benefit	$	(387)	$	(100)	$	(64)	$	(66)	$	(26)	$	63	$	(580)
	Net income (loss)  (3)	$	852	$	204	$	132	$	128	$	52	$	(131)	$	1,237

Reconciliation of Revenue from Segments to Consolidated [Table Text Block]

	Three months ended September 30,				Nine months ended September 30,
	2016		2015		2016		2015
Net income of reportable segments	$	450	$	427	$	1,121	$	1,368
Net loss of All Other		(47)		(38)		(187)		(131)
Unallocated amounts:
Net financing costs  (1)		(26)		(31)		(84)		(80)
Stock-based compensation expense		(10)		(11)		(33)		(36)
Exploratory research		(27)		(32)		(82)		(86)
Corporate contributions		(15)		(13)		(38)		(37)
Gain on realignment of equity investment						2,676
Equity in earnings of affiliated companies, net of impairments  (2)		22		38		126		191
Unrealized loss on foreign currency hedges related to translated earnings		(239)		(317)		(2,441)		(447)
Resolution of Department of Justice investigation						(98)
Income tax benefit		199		178		1,253		375
Other corporate items		(23)		11		(90)		(2)
Net income	$	284	$	212	$	2,123	$	1,115

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Note 2 - Restructuring, Impairment and Other Charges (Details Textual) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Restructuring, Settlement and Impairment Provisions	$ 0	$ 0	$ 78,000,000	$ 0
Expected Cash Expenditures for Restructuring Costs			$ 15,000,000

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Note 2 - Restructuring, Impairment and Other Charges - Restructuring, Impairment and Other Charges (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Employee Severance [Member]
Reserve			$ 3,000,000
Net Charges/Reversals			15,000,000
Non-cash adjustments			(1,000,000)
Restructuring payments			(9,000,000)
Reserve	$ 8,000,000		8,000,000
Other Restructuring [Member]
Reserve			0
Net Charges/Reversals			1,000,000
Non-cash adjustments			0
Restructuring payments			(1,000,000)
Reserve	0		0
Reserve			3,000,000
Net Charges/Reversals			16,000,000
Non-cash adjustments			(1,000,000)
Restructuring payments			(10,000,000)	$ (38,000,000)
Reserve	8,000,000		8,000,000
Disposal of long-lived assets			62,000,000
Restructuring, Settlement and Impairment Provisions	$ 0	$ 0	$ 78,000,000	$ 0

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Note 2 - Restructuring, Impairment and Other Charges - Year-to-date Cost for Reportable Segments (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Display Technologies [Member]
Restructuring, Settlement and Impairment Provisions			$ 4,000,000
Optical Communications [Member]
Restructuring, Settlement and Impairment Provisions			6,000,000
Environmental Technologies [Member]
Restructuring, Settlement and Impairment Provisions			5,000,000
Specialty Materials [Member]
Restructuring, Settlement and Impairment Provisions			12,000,000
Life Sciences [Member]
Restructuring, Settlement and Impairment Provisions			3,000,000
Other Segments [Member]
Restructuring, Settlement and Impairment Provisions			40,000,000
Corporate Segment [Member]
Restructuring, Settlement and Impairment Provisions			8,000,000
Restructuring, Settlement and Impairment Provisions	$ 0	$ 0	$ 78,000,000	$ 0

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Note 3 - Commitments, Contingencies, and Guarantees (Details Textual)	3 Months Ended	6 Months Ended	9 Months Ended
	Jun. 30, 2016 USD ($)	Sep. 30, 2016 USD ($)	Sep. 30, 2016 USD ($)	Dec. 31, 2015 USD ($)
Pittsburgh Corning Corporation PCC [Member] | PPG Industries, Inc. [Member]
Equity Method Investment, Ownership Percentage		50.00%	50.00%
Pittsburgh Corning Corporation PCC [Member]
Equity Method Investment, Ownership Percentage		50.00%	50.00%
PCC and PCE [Member]
Gain (Loss) on Investments	$ 56,000,000
Asbestos Litigation [Member] | Amended Pittsburgh Corning Corporation Plan [Member]
Loss Contingency, Estimate of Possible Loss		$ 290,000,000	$ 290,000,000	$ 528,000,000
Asbestos Litigation [Member] | Amended Pittsburgh Corning Corporation Plan [Member]
Loss Contingency Accrual, Period Increase (Decrease)		(238,000,000)
Loss Contingency, Accrual, Noncurrent		220,000,000	220,000,000
Loss Contingency, Accrual, Current		70,000,000	70,000,000
Asbestos Litigation [Member] | Non-PCC Asbestos Litigation [Member]
Loss Contingency, Accrual, Noncurrent		150,000,000	$ 150,000,000
Undiscounted Projection of Claims and Related Legal Fees, Period			20 years
Contingent Guarantees [Member]
Guarantor Obligations, Maximum Exposure, Undiscounted		201,000,000	$ 201,000,000	184,000,000
Environmental Cleanup and Related Litigation [Member]
Accrual for Environmental Loss Contingencies		45,000,000	45,000,000	37,000,000
Loss Contingency, Accrual, Noncurrent		394,000,000	394,000,000	440,000,000
Loss Contingency, Accrual, Current		73,000,000	73,000,000	238,000,000
Recorded Unconditional Purchase Obligation		$ 255,000,000	$ 255,000,000	$ 220,000,000
Number of Hazardous Waste Sites		17	17

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Note 3 - Commitments, Contingencies, and Guarantees - Amount of the Asbestos Litigation Liability (Details)	9 Months Ended
	Sep. 30, 2016 USD ($)
Amended PCC Plan [Member] | Equity Interests [Member]
Fair Value of Asbestos Litigation Liability	$ 238,000,000
Less: Contribution of PCC & PCE Equity Interests - Carrying Value	182,000,000
Gain on Contribution of Equity Interests	56,000,000
Asbestos Litigation Liability	0
Amended PCC Plan [Member] | Fixed Series of Payments [Member]
Fair Value of Asbestos Litigation Liability	290,000,000
Less: Contribution of PCC & PCE Equity Interests - Carrying Value	0
Gain on Contribution of Equity Interests	0
Asbestos Litigation Liability	290,000,000
Non-PCC Asbestos Litigation [Member]
Fair Value of Asbestos Litigation Liability	150,000,000
Less: Contribution of PCC & PCE Equity Interests - Carrying Value	0
Gain on Contribution of Equity Interests	0
Asbestos Litigation Liability	150,000,000
Amended PCC Plan and Non-PCC Asbestos Claims [Member]
Fair Value of Asbestos Litigation Liability	678,000,000
Less: Contribution of PCC & PCE Equity Interests - Carrying Value	182,000,000
Gain on Contribution of Equity Interests	56,000,000
Asbestos Litigation Liability	$ 440,000,000

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Note 4 - Debt (Details Textual) - USD ($)	Jul. 20, 2016	Sep. 30, 2016	Dec. 31, 2015	Jun. 30, 2015
Amended Credit Facility [Member]
Line of Credit Facility, Maximum Borrowing Capacity		$ 2,000,000,000
Long-term Line of Credit		0
1.50% Due May 8, 2018 [Member] | Senior Notes [Member]
Debt Instrument, Face Amount				$ 375,000,000
Debt Instrument, Interest Rate, Stated Percentage				1.50%
2.90% Due May 15, 2022 [Member] | Senior Notes [Member]
Debt Instrument, Face Amount				$ 375,000,000
Debt Instrument, Interest Rate, Stated Percentage				2.90%
Debt Instrument, Fair Value Disclosure		4,300,000,000	$ 4,100,000,000
Long-term Debt and Capital Lease Obligations		$ 3,916,000,000	$ 3,890,000,000
Increase (Decrease) to Commercial Paper Maximum Capacity	$ 1,000,000,000
Commercial Paper, Maximum Borrowing Capacity	$ 2,000,000,000

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Note 5 - Income Taxes (Details Textual)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent	35.00%	35.00%	35.00%	35.00%

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Note 5 - Income Taxes - Provision for Income Taxes (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Income tax (provision) benefit	$ 27,000,000	$ (6,000,000)	$ 835,000,000	$ (202,000,000)
Effective tax rate	(10.50%)	2.80%	(64.80%)	15.30%

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Note 6 - Earnings Per Common Share - Computation of Basic and Diluted Earnings per Common Share (Details) - USD ($)		3 Months Ended		9 Months Ended
		Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Convertible Preferred Stock, Series A [Member]
Series A convertible preferred stock dividend		$ 24,000,000	$ 24,000,000	$ 73,000,000	$ 73,000,000
Plus: Series A convertible preferred stock dividend (1)		$ 24,000,000		$ 73,000,000	$ 73,000,000
Effect of dilutive securities:
Effect of dilutive securities (in shares)	[1]	115,000,000		115,000,000	115,000,000
Stock Options and Other Dilutive Securities [Member]
Effect of dilutive securities:
Effect of dilutive securities (in shares)		9,000,000	8,000,000	9,000,000	10,000,000
Convertible Preferred Stock, Series A [Member]
Antidilutive potential shares excluded from diluted earnings per common share:
Antidilutive potential shares excluded from diluted earnings per common share (in shares)	[1]	0	115,000,000	0	0
Stock Compensation Plan [Member]
Antidilutive potential shares excluded from diluted earnings per common share:
Antidilutive potential shares excluded from diluted earnings per common share (in shares)		13,000,000	29,000,000	18,000,000	22,000,000
Accelerated Share Repurchase Foward Contracts [Member]
Antidilutive potential shares excluded from diluted earnings per common share:
Antidilutive potential shares excluded from diluted earnings per common share (in shares)		14,000,000	0	14,000,000	0
Net income attributable to Corning Incorporated		$ 284,000,000	$ 212,000,000	$ 2,123,000,000	$ 1,115,000,000
Net income available to common stockholders – basic		260,000,000	188,000,000	2,050,000,000	1,042,000,000
Net income available to common stockholders – diluted		$ 284,000,000	$ 188,000,000	$ 2,123,000,000	$ 1,115,000,000
Weighted-average common shares outstanding – basic (in shares)		978,000,000	1,210,000,000	1,046,000,000	1,241,000,000
Weighted-average common shares outstanding – diluted (in shares)		1,102,000,000	1,218,000,000	1,170,000,000	1,366,000,000
Basic earnings per common share (in dollars per share)		$ 0.27	$ 0.16	$ 1.96	$ 0.84
Diluted earnings per common share (in dollars per share)		$ 0.26	$ 0.15	$ 1.81	$ 0.82
Antidilutive potential shares excluded from diluted earnings per common share (in shares)		27,000,000	144,000,000	32,000,000	22,000,000

[1] In the three months ended September 30, 2015, the Series A convertible preferred stock was anti-dilutive and therefore excluded from the calculation of diluted earnings per share.

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Note 7 - Available-for-Sale Investments (Details Textual) - USD ($)	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Available-for-sale Securities, Current	$ 0		$ 100,000,000
Available-for-sale Securities, Noncurrent	30,000,000		33,000,000
Available-for-sale Securities, Amortized Cost Basis	33,000,000		$ 37,000,000
Proceeds from Sale of Short-term Investments	$ 121,000,000	$ 1,046,000,000

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Note 8 - Inventories, Net of Inventory Reserves - Inventories, Net (Details) - USD ($) $ in Millions	Sep. 30, 2016	Dec. 31, 2015
Finished goods	$ 636	$ 633
Work in process	301	264
Raw materials and accessories	278	200
Supplies and packing materials	301	288
Total inventories, net of inventory reserves	$ 1,516	$ 1,385

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Note 9 - Investments (Details Textual) - USD ($)			3 Months Ended		9 Months Ended
		May 31, 2016	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Dow Corning Corporation [Member]
Equity Method Investment, Ownership Percentage		50.00%
Subsidiary or Equity Method Investee, Cumulative Percentage Ownership after All Transactions		100.00%
Equity Method Investments	[1]		$ 0		$ 0		$ 1,483,000,000
HSC Operating Partnernship [Member] | HSG [Member]
Equity Method Investment, Ownership Percentage			80.50%		80.50%
Reclassification out of Accumulated Other Comprehensive Income [Member]
Defined Benefit Plan, Actuarial Gain (Loss)					$ (260,000,000)
Foreign Currency Transaction Gain, before Tax					45,000,000
Equity Method Investments		$ 4,800,000,000	$ 285,000,000		285,000,000		$ 1,905,000,000
Removal of Carrying Value of Equity Method Investment		$ 383,000,000			383,000,000
Release of Deferred Tax Liabilities					105,000,000
Realignment of Equity Investment, Gain (Loss)				$ 0	$ 2,676,000,000	$ 0

[1] Amounts reflect Corning's direct ownership interests in the respective affiliated companies at September 30, 2016 and December 31, 2015. Corning does not control any of such entities.

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Note 9 - Investments - Gain of Realignment (Details) - USD ($)			3 Months Ended		9 Months Ended
		May 31, 2016	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Cash					$ 4,818,000,000	$ 0
Carrying Value of Dow Corning Equity Investment					(1,560,000,000)
Carrying Value of HSG Equity Investment		$ (383,000,000)			(383,000,000)
Other (1)	[1]				(199,000,000)
Gain				$ 0	$ 2,676,000,000	$ 0

[1] Primarily consists of the release of accumulated other comprehensive income items related to unamortized actuarial losses related to Dow Corning's pension plan and foreign currency translation gains in the amounts of $260 million and $45 million, respectively.

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Note 9 - Investments - Investments (Details) - USD ($)		9 Months Ended
		Sep. 30, 2016	May 31, 2016	Dec. 31, 2015
Parent Company [Member] | Dow Corning Corporation [Member]
Ownership interest	[1]	50.00%
Parent Company [Member] | All Other [Member]
Ownership interest, minimum	[1]	20.00%
Ownership interest, maximum	[1]	50.00%
Parent Company [Member] | HSG [Member] | Other Liabilities [Member]
Ownership interest	[2],[3]	50.00%
Dow Corning Corporation [Member]
Ownership interest			50.00%
Equity Method Investments	[1]	$ 0		$ 1,483,000,000
Investment, amount	[1]	0		1,483,000,000
All Other [Member]
Equity Method Investments	[1]	285,000,000		422,000,000
Investment, amount	[1]	285,000,000		422,000,000
HSG [Member] | Other Liabilities [Member]
Investment liabilities	[2],[3]	343,000,000
Equity Method Investments		285,000,000	$ 4,800,000,000	1,905,000,000
Investment, amount		285,000,000	$ 4,800,000,000	1,905,000,000
Other investments		67,000,000		70,000,000
Investment assets		352,000,000		$ 1,975,000,000
Investment liabilities		$ 343,000,000

[1] Amounts reflect Corning's direct ownership interests in the respective affiliated companies at September 30, 2016 and December 31, 2015. Corning does not control any of such entities.

[2] HSG indirectly holds an 80.5% interest in a HSG operating partnership.

[3] The negative carrying value of the investment in HSG is recorded in Other Liabilities.

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Note 10 - Goodwill and Other Intangible Assets (Details Textual) - USD ($)	3 Months Ended			9 Months Ended
	Sep. 30, 2016	Jun. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Optical Communications [Member]
Business Combination, Consideration Transferred		$ 296,000,000
Optical Communications [Member]
Goodwill, Impaired, Accumulated Impairment Loss	$ 6,500,000,000			$ 6,500,000,000		$ 6,500,000,000
Goodwill, Gross	8,100,000,000			8,100,000,000		$ 7,900,000,000
Finite-lived Intangible Assets Acquired				127,000,000
Finite Lived Intangible Assets, Foreign Currency Translation Gain (Loss)				11,000,000
Amortization of Intangible Assets	17,000,000		$ 12,000,000	46,000,000	$ 40,000,000
Finite-Lived Intangible Assets, Amortization Expense, Remainder of Fiscal Year	67,000,000			67,000,000
Finite-Lived Intangible Assets, Amortization Expense, Year Two	72,000,000			72,000,000
Finite-Lived Intangible Assets, Amortization Expense, Year Three	72,000,000			72,000,000
Finite-Lived Intangible Assets, Amortization Expense, Year Four	71,000,000			71,000,000
Finite-Lived Intangible Assets, Amortization Expense, Year Five	66,000,000			66,000,000
Finite-Lived Intangible Assets, Amortization Expense, after Year Five	$ 66,000,000			$ 66,000,000

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Note 10 - Goodwill and Other Intangible Assets - Carrying Amount of Goodwill by Segment (Details)	9 Months Ended
	Sep. 30, 2016 USD ($)
Optical Communications [Member]
Balance	$ 439,000,000
Acquired goodwill (1)	175,000,000	[1]
Measurement period adjustment (2)	(6,000,000)	[2]
Foreign currency translation adjustment	7,000,000
Balance	615,000,000
Display Technologies [Member]
Balance	128,000,000
Acquired goodwill (1)	0	[1]
Measurement period adjustment (2)	0	[2]
Foreign currency translation adjustment	5,000,000
Balance	133,000,000
Specialty Materials [Member]
Balance	150,000,000
Acquired goodwill (1)	0	[1]
Measurement period adjustment (2)	0	[2]
Foreign currency translation adjustment	0
Balance	150,000,000
Life Sciences [Member]
Balance	562,000,000
Acquired goodwill (1)	0	[1]
Measurement period adjustment (2)	0	[2]
Foreign currency translation adjustment	6,000,000
Balance	568,000,000
Other Segments [Member]
Balance	101,000,000
Acquired goodwill (1)	0	[1]
Measurement period adjustment (2)	0	[2]
Foreign currency translation adjustment	2,000,000
Balance	103,000,000
Balance	1,380,000,000
Acquired goodwill (1)	175,000,000	[1]
Measurement period adjustment (2)	(6,000,000)	[2]
Foreign currency translation adjustment	20,000,000
Balance	$ 1,569,000,000

[1] The Company completed an acquisition in the Optical Communications segment during the first first half of 2016 with a purchase price of $296 million.

[2] In the third quarter of 2016, minor adjustments were made to the preliminary allocation of the total purchase consideration related to a second quarter acquisition.

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Note 10 - Goodwill and Other Intangible Assets - Other Intangible Assets (Details) - USD ($) $ in Millions	Sep. 30, 2016	Dec. 31, 2015
Patents, Trademarks, and Trade Names [Member]
Amortized intangible assets:
Other intangible assets, gross	$ 367	$ 350
Other intangible assets, accumulated amortization	176	162
Other intangible assets, net	191	188
Customer Lists and Other [Member]
Amortized intangible assets:
Other intangible assets, gross	744	621
Other intangible assets, accumulated amortization	138	103
Other intangible assets, net	606	518
Other intangible assets, gross	1,111	971
Other intangible assets, accumulated amortization	314	265
Other intangible assets, net	$ 797	$ 706

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Note 11 - Employee Retirement Plans - Summary of Net Periodic Benefit Cost (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Pension Plan [Member]
Service cost	$ 22,000,000	$ 22,000,000	$ 65,000,000	$ 67,000,000
Interest cost	31,000,000	36,000,000	93,000,000	109,000,000
Expected return on plan assets	(41,000,000)	(44,000,000)	(124,000,000)	(133,000,000)
Amortization of net loss	0	0	0	0
Amortization of prior service cost (credit)	1,000,000	2,000,000	4,000,000	5,000,000
Recognition of actuarial loss	26,000,000	0	60,000,000	8,000,000
Total pension and postretirement benefit expense	39,000,000	16,000,000	98,000,000	56,000,000
Other Postretirement Benefit Plan [Member]
Service cost	3,000,000	3,000,000	7,000,000	10,000,000
Interest cost	6,000,000	8,000,000	19,000,000	24,000,000
Expected return on plan assets	0	0	0	0
Amortization of net loss	0	1,000,000	(1,000,000)	3,000,000
Amortization of prior service cost (credit)	(1,000,000)	(2,000,000)	(3,000,000)	(5,000,000)
Recognition of actuarial loss	0	0	0	0
Total pension and postretirement benefit expense	$ 8,000,000	$ 10,000,000	$ 22,000,000	$ 32,000,000

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Note 12 - Other Liabilities (Details Textual) - Pittsburgh Corning Corporation PCC [Member]	Sep. 30, 2016
PPG Industries, Inc. [Member]
Equity Method Investment, Ownership Percentage	50.00%
Equity Method Investment, Ownership Percentage	50.00%

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Note 12 - Other Liabilities - Other Liabilities (Details) - USD ($)		Sep. 30, 2016	Dec. 31, 2015
Wages and employee benefits		$ 472,000,000	$ 491,000,000
Income taxes		149,000,000	53,000,000
Loss Contingency, Accrual, Current		73,000,000	238,000,000
Derivative instruments		204,000,000	55,000,000
Other current liabilities		456,000,000	471,000,000
Other accrued liabilities		1,354,000,000	1,308,000,000
Asbestos and other litigation reserves		394,000,000	440,000,000
Derivative instruments		1,543,000,000	88,000,000
Investment in Hemlock Semiconductor Group (1)	[1]	343,000,000	0
Defined benefit pension plan liabilities		762,000,000	672,000,000
Other non-current liabilities		1,062,000,000	1,042,000,000
Other liabilities		$ 4,104,000,000	$ 2,242,000,000

[1] The negative carrying value resulted from a one-time charge to this entity in 2014 for the permanent abandonment of certain assets.

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Note 13 - Hedging Activities (Details Textual) - Not Designated as Hedging Instrument [Member] - USD ($) $ in Billions	Sep. 30, 2016	Dec. 31, 2015
Gross Notional Value, Translated Earnings Contracts [Member]
Derivative, Notional Amount	$ 17.6	$ 12.0
Gross Notional Value, Collar Options [Member]
Derivative, Notional Amount	2.8	5.6
Gross Notional Value, Foreign Exchange Forward [Member]
Derivative, Notional Amount	14.8	6.4
Net Notional Value, Collar Options [Member]
Derivative, Notional Amount	$ 1.4	$ 2.9

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Note 13 - Hedging Activities - Summary of Notional Amounts and Respective Fair Values of Derivative Financial Instruments (Details) - USD ($) $ in Millions		Sep. 30, 2016	Dec. 31, 2015
Foreign Exchange Contract [Member] | Designated as Hedging Instrument [Member] | Other Assets or Liabilities, Current [Member]
Notional amount	[1]	$ 527	$ 782
Asset derivatives, fair value	[1]	1	5
Liability derivatives, fair value	[1]	(54)	(10)
Foreign Exchange Contract [Member] | Designated as Hedging Instrument [Member] | Other Assets or Liabilities, Noncurrent [Member]
Notional amount
Asset derivatives, fair value			1
Liability derivatives, fair value		(12)	(23)
Foreign Exchange Contract [Member] | Not Designated as Hedging Instrument [Member] | Other Assets or Liabilities, Current [Member]
Notional amount		759	1,095
Asset derivatives, fair value		2	6
Liability derivatives, fair value		(36)	(12)
Interest Rate Swap [Member] | Designated as Hedging Instrument [Member] | Other Assets or Liabilities, Noncurrent [Member]
Notional amount		550	550
Asset derivatives, fair value		7
Liability derivatives, fair value			(4)
Translated Earnings Contracts [Member] | Not Designated as Hedging Instrument [Member] | Other Assets or Liabilities, Current [Member]
Notional amount		17,595	11,972
Asset derivatives, fair value		66	511
Liability derivatives, fair value		(114)	(33)
Translated Earnings Contracts [Member] | Not Designated as Hedging Instrument [Member] | Other Assets or Liabilities, Noncurrent [Member]
Notional amount
Asset derivatives, fair value		27	472
Liability derivatives, fair value		(1,531)	(61)
Notional amount		19,431	14,399
Asset derivatives, fair value		103	995
Liability derivatives, fair value		$ (1,747)	$ (143)

[1] Cash flow hedges with a typical duration of 24 months or less.

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Note 13 - Hedging Activities - Effect on Consolidated Financial Statements (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016		Sep. 30, 2015
Interest Rate Hedges [Member] | Cash Flow Hedging [Member] | Sales [Member]
Gain/(loss) recognized in other comprehensive income (OCI)					$ (7)
Gain reclassified from accumulated OCI into income (effective)	1	4	2	[1]	14	[1]
Interest Rate Hedges [Member] | Cash Flow Hedging [Member] | Cost of Sales [Member]
Gain reclassified from accumulated OCI into income (effective)	(13)	1	(27)	[1]	7	[1]
Foreign Exchange Contract [Member] | Cash Flow Hedging [Member] | Cost of Sales [Member]
Gain/(loss) recognized in other comprehensive income (OCI)	26	(58)	(37)		(24)
Gain reclassified from accumulated OCI into income (effective)				[1]		[1]
Cash Flow Hedging [Member]
Gain/(loss) recognized in other comprehensive income (OCI)	26	(58)	(37)		(31)
Gain reclassified from accumulated OCI into income (effective)	(12)	5	(25)	[1]	21	[1]
Gain/(loss) recognized in other comprehensive income (OCI)

[1] The amount of hedge ineffectiveness at June 30, 2016 and 2015 was insignificant.

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Note 13 - Hedging Activities - Effect on Consolidated Financial Statements (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Foreign Exchange Contracts, Balance Sheet [Member] | Foreign Currency Transaction and Hedge Gain (Loss), Net [Member]
Gain (loss) recognized in income	$ 1,000,000	$ (6,000,000)	$ (27,000,000)	$ 7,000,000
Foreign Exchange Contracts, Loans [Member] | Foreign Currency Transaction and Hedge Gain (Loss), Net [Member]
Gain (loss) recognized in income	(4,000,000)	1,000,000	(48,000,000)	3,000,000
Translated Earnings Contracts [Member] | Foreign Currency Transaction and Hedge Gain (Loss), Net [Member]
Gain (loss) recognized in income	(237,000,000)	(149,000,000)	(2,295,000,000)	42,000,000
Undesignated [Member]
Gain (loss) recognized in income	$ (240,000,000)	$ (154,000,000)	(2,370,000,000)	52,000,000
Gain (loss) recognized in income			$ (2,295,000,000)	$ 42,000,000

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Note 14 - Fair Value Measurements (Details Textual) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Samsung Corning Precision Materials Co., Ltd. [Member]
Business Combination, Contingent Consideration, Asset	$ 286,000,000	$ 246,000,000
Liabilities, Fair Value Disclosure, Nonrecurring	0
Assets, Fair Value Disclosure, Nonrecurring	$ 0

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Note 14 - Fair Value Measurements - Major Categories of Financial Assets and Liabilities Measured on a Recurring Basis (Details) - USD ($)	Sep. 30, 2016		Dec. 31, 2015
Current Assets [Member] | Fair Value, Inputs, Level 1 [Member]
Other current assets		[1]		[2]
Short-term investments			100,000
Current Assets [Member] | Fair Value, Inputs, Level 2 [Member]
Other current assets	68,000	[1]	522,000	[2]
Short-term investments
Current Assets [Member] | Fair Value, Inputs, Level 3 [Member]
Other current assets		[1]		[2]
Short-term investments
Current Assets [Member]
Other current assets	68,000	[1]	522,000	[2]
Short-term investments			100,000
Non Current Assets [Member] | Fair Value, Inputs, Level 1 [Member]
Other assets		[1],[3]		[2],[4]
Non Current Assets [Member] | Fair Value, Inputs, Level 2 [Member]
Other assets	64,000	[1],[3]	506,000	[2],[4]
Non Current Assets [Member] | Fair Value, Inputs, Level 3 [Member]
Other assets	286,000	[1],[3]	246,000	[2],[4]
Non Current Assets [Member]
Other assets	350,000	[1],[3]	752,000	[2],[4]
Current Liabilities [Member] | Fair Value, Inputs, Level 1 [Member]
Other accrued liabilities		[1]		[2]
Current Liabilities [Member] | Fair Value, Inputs, Level 2 [Member]
Other accrued liabilities	204,000	[1]	55,000	[2]
Current Liabilities [Member] | Fair Value, Inputs, Level 3 [Member]
Other accrued liabilities		[1]		[2]
Current Liabilities [Member]
Other accrued liabilities	204,000	[1]	55,000	[2]
Non Current Liabilities [Member] | Fair Value, Inputs, Level 1 [Member]
Other liabilities		[1]		[2]
Non Current Liabilities [Member] | Fair Value, Inputs, Level 2 [Member]
Other liabilities	1,543,000	[1]	88,000	[2]
Non Current Liabilities [Member] | Fair Value, Inputs, Level 3 [Member]
Other liabilities		[1]	10,000	[2]
Non Current Liabilities [Member]
Other liabilities	1,543,000	[1]	98,000	[2]
Other assets	1,209,000,000		1,493,000,000
Other accrued liabilities	1,354,000,000		1,308,000,000
Other liabilities	$ 4,104,000,000		$ 2,242,000,000

[1] Derivative assets and liabilities include foreign exchange forward and zero-cost collar contracts, and interest rate swaps which are measured using observable quoted prices for similar assets and liabilities.

[2] Derivative assets and liabilities include foreign exchange contracts which are measured using observable quoted prices for similar assets and liabilities.

[3] Other assets include asset-backed securities which are measured using observable quoted prices for similar assets and contingent consideration assets or liabilities which are measured by applying an option pricing model using projected future revenue and forecasted foreign exchange rates.

[4] Other assets include asset-backed securities which are measured using observable quoted prices for similar assets and contingent consideration assets or liabilities which are measured by applying an option pricing model using projected future revenues.

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Note 15 - Shareholders' Equity (Details Textual) - USD ($)			3 Months Ended			9 Months Ended
	Jul. 28, 2016	Jan. 15, 2014	Sep. 30, 2016	Jun. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015	Oct. 26, 2015
Convertible Preferred Stock, Series A [Member] | Samsung Corning Precision Materials Co., Ltd. [Member]
Stock Issued During Period, Shares, Acquisitions		2,300
Share Price		$ 1,000,000
Stock Issued During Period, Value, Acquisitions		$ 2,300,000,000
Convertible Preferred Stock, Series A [Member]
Preferred Stock, Par or Stated Value Per Share		$ 100
Common Stock [Member]
Convertible Preferred Stock, Shares Issued upon Conversion		50,000
Accumulated Defined Benefit Plans Adjustment Attributable to Parent [Member]
Other Comprehensive Income (Loss), Equity Method Investments, Tax			$ 0		$ 0	$ 19,000,000	$ 0
July 28, 2016 [Member]
Stock Repurchase Program, Authorized Amount	$ 2,000,000,000
Stock Repurchase Program, Authorized Amount, Payment Tranche One	1,500,000,000
Stock Repurchase Program, Authorized Amount, Payment Tranche Two	500,000,000
Payments for Repurchase of Common Stock	$ 2,000,000,000
Treasury Stock, Shares, Acquired	74,400,000
Oct. 26, 2015 [Member]
Stock Repurchase Program, Authorized Amount									$ 4,000,000,000
The 2015 Repurchase Program [Member]
Treasury Stock, Shares, Acquired			15,300,000			96,000,000
Treasury Stock, Value, Acquired, Cost Method			$ 340,000,000			$ 1,901,000,000
Gain on Realignment of Equity Investment [Member]
Foreign Currency Transaction Gain, before Tax				$ 45,000,000		$ 45,000,000
Cumulative Unamortized Actuarial Loss Released During Period, Net of Tax				260,000,000
Cumulative Unamortized Actuarial Loss Released During Period, Tax				19,000,000
Selling, General and Administrative Expenses [Member]
Foreign Currency Transaction Loss, before Tax				22,000,000
Cumulative Unamortized Actuarial Loss Released During Period, Net of Tax				$ 2,000,000
Preferred Stock, Par or Stated Value Per Share			$ 100			$ 100		$ 100
Payments for Repurchase of Common Stock						$ 3,884,000,000	$ 1,905,000,000

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Note 15 - Shareholders' Equity - Accumulated Other Comprehensive Income (Details) - USD ($)		3 Months Ended		9 Months Ended
		Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Accumulated Foreign Currency Adjustment Attributable to Parent [Member]
Balance		$ (547,000,000)	$ (877,000,000)	$ (1,171,000,000)	$ (581,000,000)
Other comprehensive income (loss)		235,000,000	(163,000,000)	860,000,000	(399,000,000)
Equity method affiliates		10,000,000	(18,000,000)	9,000,000	(78,000,000)
Net current-period other comprehensive income (loss)		245,000,000	(181,000,000)	869,000,000	(477,000,000)
Balance		(302,000,000)	(1,058,000,000)	(302,000,000)	(1,058,000,000)
Accumulated Defined Benefit Plans Adjustment Attributable to Parent [Member]
Balance	[1]	(323,000,000)	(703,000,000)	(588,000,000)	(709,000,000)
Other comprehensive income (loss)	[1],[2]	(31,000,000)	(1,000,000)	(64,000,000)	5,000,000
Equity method affiliates	[1],[3]		6,000,000	264,000,000	(4,000,000)
Net current-period other comprehensive income (loss)	[1]	(5,000,000)	6,000,000	260,000,000	12,000,000
Balance	[1]	(328,000,000)	(697,000,000)	(328,000,000)	(697,000,000)
Amounts reclassified from accumulated other comprehensive income (2)	[1],[2]	26,000,000	$ 1,000,000	60,000,000	$ 11,000,000
Balance				(1,811,000,000)
Balance		$ (715,000,000)		$ (715,000,000)

[1] All amounts are after tax. Amounts in parentheses indicate debits to accumulated other comprehensive income.

[2] Tax effects are not significant.

[3] For the three months ended September 30, 2016, tax effects are not significant. For the nine months ended September 30, 2016, amounts are net of total tax expense of $19 million. For the three and nine months ended September 30, 2015, tax effects are not significant.

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Note 16 - Share-based Compensation (Details Textual) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Minimum [Member] | Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period			1 year
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term			1 year
Minimum [Member]
Stock Options Exercisable Period from Date of Grant			1 year
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term			7 years 146 days	7 years 73 days
Maximum [Member] | Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period			10 years
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term			10 years
Maximum [Member]
Stock Options Exercisable Period from Date of Grant			5 years
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term			7 years 146 days	7 years 73 days
Employee Stock Option [Member]
Allocated Share-based Compensation Expense	$ 2,000,000	$ 2,000,000	$ 10,000,000	$ 13,000,000
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period			10 years
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized	7,000,000		$ 7,000,000
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition			1 year 292 days
Proceeds from Stock Options Exercised			$ 86,000,000	99,000,000
Restricted Stock [Member]
Allocated Share-based Compensation Expense	8,000,000	9,000,000	23,000,000	23,000,000
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized	31,000,000		$ 31,000,000
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition			1 year 328 days
Allocated Share-based Compensation Expense	$ 10,000,000	$ 11,000,000	$ 33,000,000	36,000,000
Proceeds from Stock Options Exercised			86,000,000	99,000,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Intrinsic Value			$ 36,000,000	$ 46,000,000
Years of Historical Volatility Included in Most Recent Volatility			15 years
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term	7 years 146 days	7 years 73 days

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Note 16 - Share-based Compensation - Summary of Information Concerning Stock Options Outstanding Including the Related Transactions under the Stock Option Plans (Details) $ / shares in Units, shares in Thousands, $ in Thousands	9 Months Ended
	Sep. 30, 2016 USD ($) $ / shares shares
Balance (in shares) | shares	42,738
Balance (in dollars per share) | $ / shares	$ 19.40
Granted (in shares) | shares	1,669
Granted (in dollars per share) | $ / shares	$ 19.98
Exercised (in shares) | shares	(5,838)
Exercised (in dollars per share) | $ / shares	$ 15.63
Forfeited and Expired (in shares) | shares	(4,317)
Forfeited and Expired (in dollars per share) | $ / shares	$ 26.02
Balance (in shares) | shares	34,252
Balance (in dollars per share) | $ / shares	$ 19.24
Options Outstanding	3 years 350 days
Options Outstanding | $	$ 164,226
Options Expected to Vest (in shares) | shares	34,208
Options Expected to Vest (in dollars per share) | $ / shares	$ 19.23
Options Expected to Vest	3 years 346 days
Options Expected to Vest | $	$ 164,091
Options Exercisable (in shares) | shares	29,475
Options Exercisable (in dollars per share) | $ / shares	$ 18.99
Options Exercisable	3 years 76 days
Options Exercisable | $	$ 150,477

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Note 16 - Share-based Compensation - Inputs Used for Valuation of Option Grants under Stock Option Plans (Details)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Minimum [Member]
Expected volatility			38.60%	44.20%
Weighted-average volatility			38.60%	44.20%
Expected dividends			2.34%	1.92%
Risk-free rate			1.40%	1.90%
Average risk-free rate			1.40%	1.90%
Expected term (in years)			7 years 146 days	7 years 73 days
Pre-vesting departure rate			0.60%	0.60%
Maximum [Member]
Expected volatility			43.10%	44.90%
Weighted-average volatility			43.10%	44.90%
Expected dividends			2.94%	2.67%
Risk-free rate			1.60%	2.00%
Average risk-free rate			1.60%	2.00%
Expected term (in years)			7 years 146 days	7 years 73 days
Pre-vesting departure rate			0.60%	0.60%
Expected volatility	38.60%	44.20%
Weighted-average volatility	38.60%	44.20%
Expected dividends	2.34%	2.67%
Risk-free rate	1.40%	2.00%
Average risk-free rate	1.40%	2.00%
Expected term (in years)	7 years 146 days	7 years 73 days
Pre-vesting departure rate	0.60%	0.60%

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Note 16 - Share-based Compensation - Summary of the Status of Non-vested Time-based Restricted Stock and Restricted Stock Units (Details) - Time-Based Restricted Stock and Restricted Stock Units [Member] shares in Thousands	9 Months Ended
	Sep. 30, 2016 $ / shares shares
Balance (in shares) | shares	5,242
Balance (in dollars per share) | $ / shares	$ 17.91
Granted (in shares) | shares	1,415
Granted (in dollars per share) | $ / shares	$ 20.57
Vested (in shares) | shares	(1,802)
Vested (in dollars per share) | $ / shares	$ 14.48
Forfeited (in shares) | shares	(75)
Forfeited (in dollars per share) | $ / shares	$ 20.78
Balance (in shares) | shares	4,780
Balance (in dollars per share) | $ / shares	$ 19.95

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Note 17 - Reportable Segments (Details Textual)	9 Months Ended
	Sep. 30, 2016
Minimum [Member]
Number of Material Formulations	150

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Note 17 - Reportable Segments - Reportable Segments (Details) - USD ($)		3 Months Ended		9 Months Ended
		Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Operating Segments [Member] | Display Technologies [Member]
Net sales		$ 902,000,000	$ 757,000,000	$ 2,408,000,000	$ 2,354,000,000
Depreciation	[1]	152,000,000	147,000,000	452,000,000	455,000,000
Amortization of purchased intangibles		0	0	0	0
Research, development and engineering expenses	[2]	14,000,000	28,000,000	49,000,000	78,000,000
Equity in earnings of affiliated companies		0	(3,000,000)	0	(8,000,000)
Income tax (provision) benefit		(98,000,000)	(119,000,000)	(277,000,000)	(387,000,000)
Net income	[3]	279,000,000	255,000,000	692,000,000	852,000,000
Restructuring, impairment and other charges				4,000,000
Operating Segments [Member] | Optical Communications [Member]
Net sales		795,000,000	747,000,000	2,186,000,000	2,244,000,000
Depreciation	[1]	41,000,000	41,000,000	125,000,000	122,000,000
Amortization of purchased intangibles		10,000,000	7,000,000	25,000,000	24,000,000
Research, development and engineering expenses	[2]	37,000,000	33,000,000	110,000,000	101,000,000
Equity in earnings of affiliated companies		0	0	0	0
Income tax (provision) benefit		(49,000,000)	(34,000,000)	(99,000,000)	(100,000,000)
Net income	[3]	78,000,000	70,000,000	172,000,000	204,000,000
Restructuring, impairment and other charges				6,000,000
Operating Segments [Member] | Environmental Technologies [Member]
Net sales		264,000,000	257,000,000	787,000,000	799,000,000
Depreciation	[1]	32,000,000	32,000,000	97,000,000	93,000,000
Amortization of purchased intangibles		0	0	0	0
Research, development and engineering expenses	[2]	24,000,000	21,000,000	75,000,000	67,000,000
Equity in earnings of affiliated companies		0	0	0	0
Income tax (provision) benefit		(17,000,000)	(19,000,000)	(52,000,000)	(64,000,000)
Net income	[3]	35,000,000	38,000,000	106,000,000	132,000,000
Restructuring, impairment and other charges				5,000,000
Operating Segments [Member] | Specialty Materials [Member]
Net sales		295,000,000	288,000,000	788,000,000	832,000,000
Depreciation	[1]	26,000,000	29,000,000	81,000,000	82,000,000
Amortization of purchased intangibles		0	0	0	0
Research, development and engineering expenses	[2]	31,000,000	27,000,000	96,000,000	87,000,000
Equity in earnings of affiliated companies		0	0	0	0
Income tax (provision) benefit		(21,000,000)	(23,000,000)	(52,000,000)	(66,000,000)
Net income	[3]	42,000,000	46,000,000	106,000,000	128,000,000
Restructuring, impairment and other charges				12,000,000
Operating Segments [Member] | Life Sciences [Member]
Net sales		214,000,000	211,000,000	633,000,000	619,000,000
Depreciation	[1]	14,000,000	15,000,000	42,000,000	45,000,000
Amortization of purchased intangibles		5,000,000	5,000,000	15,000,000	15,000,000
Research, development and engineering expenses	[2]	6,000,000	6,000,000	18,000,000	17,000,000
Equity in earnings of affiliated companies		0	0	0
Income tax (provision) benefit		(8,000,000)	(9,000,000)	(22,000,000)	(26,000,000)
Net income	[3]	16,000,000	18,000,000	45,000,000	52,000,000
Restructuring, impairment and other charges				3,000,000
Operating Segments [Member] | Other Segments [Member]
Net sales		37,000,000	12,000,000	112,000,000	32,000,000
Depreciation	[1]	12,000,000	9,000,000	34,000,000	29,000,000
Amortization of purchased intangibles		2,000,000	0	6,000,000	0
Research, development and engineering expenses	[2]	47,000,000	34,000,000	139,000,000	123,000,000
Equity in earnings of affiliated companies		(3,000,000)	4,000,000	(8,000,000)	12,000,000
Income tax (provision) benefit		21,000,000	19,000,000	87,000,000	63,000,000
Net income	[3]	(47,000,000)	(38,000,000)	(187,000,000)	(131,000,000)
Restructuring, impairment and other charges				40,000,000
Operating Segments [Member]
Net sales		2,507,000,000	2,272,000,000	6,914,000,000	6,880,000,000
Depreciation	[1]	277,000,000	273,000,000	831,000,000	826,000,000
Amortization of purchased intangibles		17,000,000	12,000,000	46,000,000	39,000,000
Research, development and engineering expenses	[2]	159,000,000	149,000,000	487,000,000	473,000,000
Equity in earnings of affiliated companies		(3,000,000)	1,000,000	(8,000,000)	4,000,000
Income tax (provision) benefit		(172,000,000)	(185,000,000)	(415,000,000)	(580,000,000)
Net income	[3]	403,000,000	389,000,000	934,000,000	1,237,000,000
Restructuring, impairment and other charges				70,000,000
Display Technologies [Member]
Restructuring, impairment and other charges				4,000,000
Optical Communications [Member]
Restructuring, impairment and other charges				6,000,000
Environmental Technologies [Member]
Restructuring, impairment and other charges				5,000,000
Specialty Materials [Member]
Restructuring, impairment and other charges				12,000,000
Life Sciences [Member]
Restructuring, impairment and other charges				3,000,000
Other Segments [Member]
Restructuring, impairment and other charges				40,000,000
Net sales		2,507,000,000	2,272,000,000	6,914,000,000	6,880,000,000
Depreciation				844,000,000	842,000,000
Amortization of purchased intangibles		17,000,000	12,000,000	46,000,000	40,000,000
Research, development and engineering expenses		187,000,000	181,000,000	569,000,000	561,000,000
Equity in earnings of affiliated companies		19,000,000	39,000,000	119,000,000	195,000,000
Income tax (provision) benefit		27,000,000	(6,000,000)	835,000,000	(202,000,000)
Net income		284,000,000	212,000,000	2,123,000,000	1,115,000,000
Restructuring, impairment and other charges		$ 0	$ 0	$ 78,000,000	$ 0

[1] Depreciation expense for Corning's reportable segments includes an allocation of depreciation of corporate property not specifically identifiable to a segment.

[2] Research, development and engineering expenses include direct project spending that is identifiable to a segment.

[3] Many of Corning's administrative and staff functions are performed on a centralized basis. Where practicable, Corning charges these expenses to segments based upon the extent to which each business uses a centralized function. Other staff functions, such as corporate finance, human resources and legal, are allocated to segments, primarily as a percentage of sales. Expenses that are not allocated to the segments are included in the reconciliation of reportable net segment net income to consolidated net income below.

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Note 17 - Reportable Segments - Reconciliation of Reportable Segment Net Income (Loss) to Consolidated Net Income (Details) - USD ($)		3 Months Ended		9 Months Ended
		Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Reportable Segments [Member]
Net income		$ 450,000,000	$ 427,000,000	$ 1,121,000,000	$ 1,368,000,000
Unallocated amounts:
Net income		450,000,000	427,000,000	1,121,000,000	1,368,000,000
Non Reportable Segments [Member]
Net income		(47,000,000)	(38,000,000)	(187,000,000)	(131,000,000)
Unallocated amounts:
Net income		(47,000,000)	(38,000,000)	(187,000,000)	(131,000,000)
Net income		284,000,000	212,000,000	2,123,000,000	1,115,000,000
Net financing costs	[1]	(26,000,000)	(31,000,000)	(84,000,000)	(80,000,000)
Stock-based compensation expense		(10,000,000)	(11,000,000)	(33,000,000)	(36,000,000)
Exploratory research		(27,000,000)	(32,000,000)	(82,000,000)	(86,000,000)
Corporate contributions		(15,000,000)	(13,000,000)	(38,000,000)	(37,000,000)
Gain			0	2,676,000,000	0
Equity in earnings of affiliated companies, net of impairments	[2]	22,000,000	38,000,000	126,000,000	191,000,000
Unrealized loss on foreign currency hedges related to translated earnings		(239,000,000)	(317,000,000)	(2,441,000,000)	(447,000,000)
Resolution of Department of Justice investigation		0	0	(98,000,000)	0
Income tax benefit		199,000,000	178,000,000	1,253,000,000	375,000,000
Other corporate items		(23,000,000)	11,000,000	(90,000,000)	(2,000,000)
Net income		$ 284,000,000	$ 212,000,000	$ 2,123,000,000	$ 1,115,000,000

[1] Net financing costs include interest income, interest expense, and interest costs and investment gains and losses associated with benefit plans.

[2] Primarily represents the equity earnings of Dow Corning.