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 June 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 July 15, 2016
Corning’s Common Stock, $0.50 par value per share	1,036,877,161 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 six months ended June 30, 2016 and 2015	3
Consolidated Statements of Comprehensive Income (Unaudited) for the three and six months ended June 30, 2016 and 2015	4
Consolidated Balance Sheets (Unaudited) at June 30, 2016 and December 31, 2015	5
Consolidated Statements of Cash Flows (Unaudited) for the six months ended June 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 June 30,				Six months ended June 30,
	2016		2015		2016		2015
Net sales	$	2,360	$	2,343	$	4,407	$	4,608
Cost of sales		1,409		1,368		2,692		2,704
Gross margin		951		975		1,715		1,904
Operating expenses:
Selling, general and administrative expenses		499		337		802		653
Research, development and engineering expenses		192		191		382		380
Amortization of purchased intangibles		15		16		29		28
Restructuring, impairment and other charges		(2)				78
Operating income		247		431		424		843
Equity in earnings of affiliated companies		41		62		100		156
Interest income		6		5		12		10
Interest expense		(40)		(33)		(81)		(63)
Translated earnings contract (loss) gain, net		(1,201)		162		(2,058)		191
Gain on realignment of equity investment		2,676				2,676
Other expense, net		(26)		(21)		(42)		(38)
Income before income taxes		1,703		606		1,031		1,099
Benefit (provision) for income taxes (Note 5)		504		(110)		808		(196)
Net income attributable to Corning Incorporated	$	2,207	$	496	$	1,839	$	903
Earnings per common share attributable to Corning Incorporated:
Basic (Note 6)	$	2.06	$	0.38	$	1.66	$	0.68
Diluted (Note 6)	$	1.87	$	0.36	$	1.53	$	0.65
Dividends declared per common share (1)	$	0.135	$	0.12	$	0.27	$	0.12

(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 June 30,				Six months ended June 30,
	2016		2015		2016		2015
Net income attributable to Corning Incorporated	$	2,207	$	496	$	1,839	$	903
Foreign currency translation adjustments and other		196		(40)		624		(296)
Net unrealized (losses) gains on investments		(1)				(3)		1
Unamortized gains (losses) and prior service credits (costs) for postretirement benefit plans		265		5		265		6
Net unrealized (losses) gains on designated hedges		(22)				(41)		5
Other comprehensive income (loss), net of tax (Note 15)		438		(35)		845		(284)
Comprehensive income attributable to Corning Incorporated	$	2,645	$	461	$	2,684	$	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)

	June 30, 2016		December 31, 2015
Assets
Current assets:
Cash and cash equivalents	$	7,144	$	4,500
Short-term investments, at fair value				100
Trade accounts receivable, net of doubtful accounts and allowances - $60 and $48		1,544		1,372
Inventories, net of inventory reserves - $157 and $146 (Note 8)		1,501		1,385
Other current assets		558		912
Total current assets		10,747		8,269
Investments (Note 9)		346		1,975
Property, plant and equipment, net of accumulated depreciation - $9,974 and $9,188		13,048		12,648
Goodwill, net (Note 10)		1,569		1,380
Other intangible assets, net (Note 10)		804		706
Deferred income taxes (Note 5)		2,952		2,056
Other assets		1,187		1,493
Total Assets	$	30,653	$	28,527
Liabilities and Equity
Current liabilities:
Current portion of long-term debt and short-term borrowings (Note 4)	$	279	$	572
Accounts payable		938		934
Other accrued liabilities (Note 3 and Note 12)		1,231		1,308
Total current liabilities		2,448		2,814
Long-term debt (Note 4)		3,918		3,890
Postretirement benefits other than pensions (Note 11)		710		718
Other liabilities (Note 3 and Note 12)		3,905		2,242
Total liabilities		10,981		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: 1,685 million and 1,681 million		842		840
Additional paid-in capital – common stock		13,668		13,352
Retained earnings		15,331		13,832
Treasury stock, at cost; Shares held: 648 million and 551 million		(11,566)		(9,725)
Accumulated other comprehensive loss		(966)		(1,811)
Total Corning Incorporated shareholders’ equity		19,609		18,788
Noncontrolling interests		63		75
Total equity		19,672		18,863
Total Liabilities and Equity	$	30,653	$	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)

	Six months ended June 30,
	2016		2015
Cash Flows from Operating Activities:
Net income	$	1,839	$	903
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		561		562
Amortization of purchased intangibles		29		28
Restructuring, impairment and other charges		78
Stock compensation charges		23		25
Equity in earnings of affiliated companies		(100)		(156)
Dividends received from affiliated companies		20		95
Deferred tax (benefit) provision		(898)		31
Restructuring payments		(7)		(23)
Employee benefit payments less than (in excess of) expense		15		(8)
Losses (gains) on foreign currency hedges related to translated earnings		2,058		(191)
Unrealized translation (gains) losses on transactions		(124)		236
Gain on realignment of equity investment		(2,676)
Changes in certain working capital items:
Trade accounts receivable		(103)		(25)
Inventories		(66)		(54)
Other current assets		(71)		(100)
Accounts payable and other current liabilities		(115)		(191)
Other, net		(20)		16
Net cash provided by operating activities		443		1,148
Cash Flows from Investing Activities:
Capital expenditures		(533)		(641)
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		(3)		6
Short-term investments – acquisitions		(20)		(570)
Short-term investments – liquidations		121		825
Realized gains on foreign currency hedges related to translated earnings		145		321
Other, net		3
Net cash provided by (used in) investing activities		4,238		(623)
Cash Flows from Financing Activities:
Net repayments of short-term borrowings and current portion of long-term debt		(64)
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		(230)
Payments from settlement of interest rate swap arrangements				(10)
Proceeds from the exercise of stock options		27		98
Repurchases of common stock for treasury		(1,515)		(1,093)
Dividends paid		(340)		(350)
Net cash used in financing activities		(2,123)		(609)
Effect of exchange rates on cash		86		(257)
Net increase (decrease) in cash and cash equivalents		2,644		(341)
Cash and cash equivalents at beginning of period		4,500		5,309
Cash and cash equivalents at end of period	$	7,144	$	4,968

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 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.

2.      Restructuring, Impairment and Other Charges

2016 Activity

In the first half 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 six months ended June 30, 2016 (in millions):

	Reserve at January 1, 2016		Net Charges/ Reversals		Non-cash adjustments		Cash payments		Reserve at June 30, 2016
Restructuring:
Employee related costs	$	3	$	15	$	(1)	$	(6)	$	11
Other charges				1				(1)
Total restructuring activity	$	3	$	16	$	(1)	$	(7)	$	11
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.

8

3.      Commitments, Contingencies and Guarantees

Pittsburgh Corning Corporation and Asbestos Litigation.  Corning and PPG Industries, Inc. (“PPG”) each owned 50% of the capital stock of Pittsburgh Corning Corporation (“PCC”).  On April 16, 2000, PCC filed for Chapter 11 reorganization in the U.S. Bankruptcy Court for the Western District of Pennsylvania.  At the time PCC filed for bankruptcy protection, there were approximately 11,800 claims pending against Corning in state court lawsuits alleging various theories of liability based on exposure to PCC’s asbestos products and typically requesting monetary damages in excess of one million dollars per claim.  On April 27, 2016, the Modified Third Amended Plan of Reorganization for Pittsburgh Corning Corporation (the “Plan”) became effective.

As required by the Plan, Corning contributed its equity interests in PCC and Pittsburgh Corning Europe N.V. (“PCE”), a Belgian corporation, on April 27, 2016 and June 9, 2016, respectively, and recognized a gain of $56 million 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.  Corning must also contribute $290 million in a fixed series of payments.  Corning has the option to use its common stock rather than cash to make these payments, but the liability is fixed by dollar value and not the number of shares.  Assuming certain conditions are met, the Plan requires Corning to make: (1) one payment of $70 million on June 9, 2017; and (2) five additional payments of $35 million, $50 million, $35 million, $50 million, and $50 million, respectively, on each of the five subsequent anniversaries of the first payment, the final payment of which is subject to reduction based on the application of credits under certain circumstances.

Non-PCC Asbestos Litigation

In addition to the claims against Corning related to its ownership interest in PCC, at the time PCC filed for bankruptcy, Corning was a defendant in other cases alleging injuries from asbestos related to its Corhart business and seeking similar amounts of monetary damages per case (the “non-PCC asbestos claims”).  The Bankruptcy Court then granted a preliminary injunction (the “Stay”), which suspended all asbestos cases against PCC, PPG and Corning – including these non-PCC asbestos claims.  Approximately 9,700 such non-PCC asbestos claims (with approximately 37,300 claimants) may still be pending.  The Stay will be lifted on August 25, 2016.  The non-PCC asbestos claims against Corning have been covered, in part, by insurance without material impact to Corning to date.  As of June 30, 2016, Corning had received approximately $19 million in insurance payments for non-PCC asbestos claims that were subject to the Stay.  When the Stay is lifted, the non-PCC asbestos claims will be allowed to proceed against Corning.  Corning believes that the $150 million reserve for estimated asbestos litigation liabilities that was established in prior periods continues to be reasonable.  The liability for non-PCC asbestos claims was estimated based upon industry data for asbestos claims since Corning does not have recent claim history due to the Stay issued by the Bankruptcy Court.  The estimated liability 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.

Total Estimated Liability for the Amended PCC Plan and the Non-PCC Asbestos Claims

The liability for the Amended PCC Plan and the non-PCC asbestos claims was estimated to be $440 million at June 30, 2016, compared with an estimate of liability of $678 million at December 31, 2015.  The decline in the liability is due to the contribution of the equity interests of PCC and PCE in the total amount of $238 million, as required by the Plan.  The $440 million liability is comprised of $290 million for the fixed series of payments for the remaining PCC asbestos liability, and $150 million for the non-PCC asbestos claims, all referenced in the preceding paragraphs. At June 30, 2016, $370 million of the obligation, consisting of the $220 million for the fixed series of payments due in the years 2018 through 2022 and $150 million for the non-PCC asbestos claims, is classified as a non-current liability.  The amount of the obligation related to the fixed payment of $70 million due in the second quarter of 2017 is classified as a current liability because the contribution of those assets is expected to be made within the next twelve months.

© 2016 Corning Incorporated. All Rights Reserved.

9

The amount of the asbestos litigation liability for the periods ended June 30, 2016 and December 31, 2015 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 June 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 June 30, 2016 and December 31, 2015, contingent guarantees totaled a notional value of $190 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 $220 million at June 30, 2016 and December 31, 2015.

Product warranty liability accruals were considered insignificant at June 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.

© 2016 Corning Incorporated. All Rights Reserved.

10

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 June 30, 2016 and December 31, 2015, Corning had accrued approximately $47 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 June 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 June 30, 2016 and $4.1 billion at December 31, 2015, compared to recorded book values of $3.9 billion at June 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.  At June 30, 2016, Corning had $252 million in outstanding commercial paper as part of the Company’s commercial paper program established in the second quarter of 2013.  The estimated fair value of this commercial paper approximates its carrying value due to the short-term maturities.

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

	Three months ended June 30,				Six months ended June 30,
	2016		2015		2016		2015
Benefit (provision) for income taxes	$	504	$	(110)	$	808	$	(196)
Effective tax rate		(29.6%)		18.2%		(78.4%)		17.8%

© 2016 Corning Incorporated. All Rights Reserved.

11

For the three and six months ended June 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 interests 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 six months ended June 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 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.

© 2016 Corning Incorporated. All Rights Reserved.

12

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 June 30,				Six months ended June 30,
	2016		2015		2016		2015
Net income attributable to Corning Incorporated	$	2,207	$	496	$	1,839	$	903
Less:  Series A convertible preferred stock dividend		24		24		49		49
Net income available to common stockholders - basic		2,183		472		1,790		854
Plus:  Series A convertible preferred stock dividend		24		24		49		49
Net income available to common stockholders - diluted	$	2,207	$	496	$	1,839	$	903
Weighted-average common shares outstanding - basic		1,059		1,246		1,081		1,257
Effect of dilutive securities:
Stock options and other dilutive securities		8		10		8		11
Series A convertible preferred stock		115		115		115		115
Weighted-average common shares outstanding - diluted		1,182		1,371		1,204		1,383
Basic earnings per common share	$	2.06	$	0.38	$	1.66	$	0.68
Diluted earnings per common share	$	1.87	$	0.36	$	1.53	$	0.65
Antidilutive potential shares excluded from diluted earnings per common share:
Employee stock options and awards		20		20		21		17
Total		20		20		21		17

7.      Available-for-Sale Investments

The following is a summary of the fair value of available-for-sale investments (in millions):

	Amortized cost				Fair value
	June 30, 2016		December 31, 2015		June 30, 2016		December 31, 2015
Bonds, notes and other securities:
U.S. government and agencies			$	100			$	100
Total short-term investments			$	100			$	100
Asset-backed securities (1)	$	34	$	37	$	30	$	33
Total long-term investments	$	34	$	37	$	30	$	33

1) Due after 10 years and are being reported at their final maturity dates.

We do not intend 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.

© 2016 Corning Incorporated. All Rights Reserved.

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For the six months ended June 30, 2016 and 2015, proceeds from sales and maturities of short-term investments totaled approximately $121 million and $0.8 billion, respectively.

8.      Inventories, Net of Inventory Reserves

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

	June 30, 2016		December 31, 2015
Finished goods	$	633	$	633
Work in process		293		264
Raw materials and accessories		274		200
Supplies and packing materials		301		288
Total inventories, net of inventory reserves	$	1,501	$	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 June 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			June 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%	$	279		422
					279		1,905
Other investments					67		70
Subtotal Investment Assets				$	346	$	1,975
Affiliated companies accounted for by the equity method
HSG (2)(3)		50%		$	361
Subtotal Investment Liabilities				$	361

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

(2)   The negative carrying value of the investment in HSG, recorded in Other Liabilities, was reduced by $22 million due to equity earnings recognized for the month of June, 2016.

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

Dow Corning Corporation

For the period ended June 30, 2016, Corning reported Dow Corning equity earnings and dividends through May 31, 2016, the transaction date.  Dow Corning information presented below is shown for the two and five months ended May 31, 2016 (in millions):

	Three months ended June 30,				Six months ended June 30,
	2016		2015		2016		2015
Statement of Operations:
Net sales	$	898	$	1,424	$	2,215	$	2,788
Gross profit (1)	$	238	$	364	$	588	$	722
Net income attributable to Dow Corning (2)	$	52	$	113	$	163	$	298
Corning’s equity in earnings of Dow Corning	$	26	$	57	$	82	$	149

(1)   Gross profit for the three and six months ended June 30, 2016 includes research and development costs of $43 million and $100 million (2015: $63 million and $125 million).

(2)   In the first half of 2015 Dow Corning’s net income included a pre-tax gain of $178 million on the settlement of long-term sales agreements.

© 2016 Corning Incorporated. All Rights Reserved.

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10.      Goodwill and Other Intangible Assets

The carrying amount of goodwill by segment for the periods ended June 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
Foreign currency translation adjustment		8		1				4		1		14
Balance at June 30, 2016	$	622	$	129	$	150	$	566	$	102	$	1,569

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

Corning’s gross goodwill balances for the periods ended June 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 June 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):

	June 30, 2016						December 31, 2015
	Gross		Accumulated amortization		Net		Gross		Accumulated amortization		Net
Amortized intangible assets:
Patents, trademarks, and trade names	$	367	$	171	$	196	$	350	$	162	$	188
Customer lists and other		733		125		608		621		103		518
Total	$	1,100	$	296	$	804	$	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 six months of 2016, primarily due to acquisitions of $117 million of other intangible assets and foreign currency translation adjustments of $10 million, offset by amortization of $29 million.

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

© 2016 Corning Incorporated. All Rights Reserved.

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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 June 30,				Six months ended June 30,				Three months ended June 30,				Six months ended June 30,
	2016		2015		2016		2015		2016		2015		2016		2015
Service cost	$	21	$	22	$	43	$	45	$	2	$	4	$	4	$	7
Interest cost		31		37		62		73		6		8		13		16
Expected return on plan assets		(41)		(44)		(83)		(89)
Amortization of net loss												1				2
Amortization of prior service cost (credit)		2		1		3		3		(1)		(2)		(2)		(3)
Recognition of actuarial loss		28		8		35		8
Total pension and postretirement benefit expense	$	41	$	24	$	60	$	40	$	7	$	11	$	15	$	22

12. Other Liabilities

Other liabilities follow (in millions):

	June 30, 2016		December 31, 2015
Current liabilities:
Wages and employee benefits	$	386	$	491
Income taxes		82		53
Asbestos and other litigation reserves		76		238
Derivative instruments		211		55
Other current liabilities		476		471
Other accrued liabilities	$	1,231	$	1,308
Non-current liabilities:
Asbestos and other litigation reserves	$	394	$	440
Derivative instruments		1,400		88
Investment in Hemlock Semiconductor Group (1)		361
Defined benefit pension plan liabilities		740		672
Other non-current liabilities		1,010		1,042
Other liabilities	$	3,905	$	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.

© 2016 Corning Incorporated. All Rights Reserved.

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13.      Hedging Activities

Undesignated Hedges

The table below includes a total gross notional value for translated earnings contracts of $19.1 billion at June 30, 2016 (at December 31, 2015: $12.0 billion), including purchased and zero-cost collars of $3.7 billion (at December 31, 2015: $5.6 billion) and average rate forwards of $15.4 billion (at December 31, 2015: $6.4 billion).  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.  As of June 30, 2016, the total net notional value of the purchased and zero-cost collars was $1.9 billion (at December 31, 2015: $2.9 billion).

The following tables summarize the notional amounts and respective fair values of Corning’s derivative financial instruments on a gross basis for June 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
	June 30, 2016	Dec. 31, 2015		June 30, 2016	Dec. 31, 2015		June 30, 2016	Dec. 31, 2015
Derivatives designated as hedging instruments
Foreign exchange contracts (1)	$     584	$    782	Other current assets	$   2	$     5	Other accrued liabilities	$    (55)	$  (10)
			Other assets		1	Other liabilities	(25)	(23)
Interest rate contracts	550	550	Other assets	10		Other liabilities		(4)
Derivatives not designated as hedging instruments
Foreign exchange contracts, other	717	1,095	Other current assets	3	6	Other accrued liabilities	(53)	(12)
Translated earnings contracts	19,128	11,972	Other current assets	98	511	Other accrued liabilities	(103)	(33)
			Other assets	67	472	Other liabilities	(1,375)	(61)
Total derivatives	$20,979	$14,399		$180	$995		$(1,611)	$(143)

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

© 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 three months ended June 30, 2016 and 2015 (in millions):

	Effect of designated derivative instruments on the consolidated financial statements for the three months ended June 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			$	6	Sales			$	5
					Cost of sales	$	(9)		4
Foreign exchange contracts	$	(35)		7
Total cash flow hedges	$	(35)	$	13		$	(9)	$	9

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

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

	Effect of  derivative instruments on the consolidated financial statements for the six months ended June 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	$	1	$	10
					Cost of sales		(14)		6
Foreign exchange contracts	$	(63)		34
Total cash flow hedges	$	(63)	$	27		$	(13)	$	16

(1) The amount of hedge ineffectiveness at June 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 June 30,				Six months ended June 30,
		2016		2015		2016		2015
Foreign exchange contracts – balance sheet	Foreign currency hedge gain (loss), net	$	(13)	$	2	$	(28)	$	13
Foreign exchange contracts – loans	Foreign currency hedge gain (loss), net		(22)				(44)		2
Foreign currency hedges related to translated earnings	Foreign currency hedge gain (loss), net		(1,201)		162		(2,058)		191
Total undesignated		$	(1,236)	$	164	$	(2,130)	$	206

© 2016 Corning Incorporated. All Rights Reserved.

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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
	June 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)	$	103		$	103
Non-current assets:
Other assets (1)(2)	$	344		$	107	$	237
Current liabilities:
Other accrued liabilities (1)	$	211		$	211
Non-current liabilities:
Other liabilities (1)(2)	$	1,408		$	1,400	$	8

(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.

© 2016 Corning Incorporated. All Rights Reserved.

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			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)(2)	$	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 June 30, 2016 and December 31, 2015, the fair value of the potential receipt of the contingent consideration in 2018 was $237 million and $246 million, respectively.

As a result of the acquisitions of the fiber-optics business of Samsung Electronics Co., Ltd., the Company has contingent consideration that was measured using unobservable (Level 3) inputs.  As of June 30, 2016, the fair value of the contingent consideration payable is $8 million.

There were no significant financial assets and liabilities measured on a nonrecurring basis during the six months ended June 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 June 30, 2016, the Preferred Stock has not been converted, and none of the anti-dilution provisions have been triggered.

Share Repurchases

On July 15, 2015, Corning’s Board of Directors approved a $2 billion share repurchase program (the “July 2015 Repurchase Program”) and on October 26, 2015 the Board of Directors authorized an additional $4 billion share repurchase program (together with the July 2015 Repurchase Program, the “2015 Repurchase Program”).  The 2015 Repurchase Program permits Corning to effect repurchases from time to time through a combination of open market repurchases, privately negotiated transactions, accelerated repurchase agreements and/or other arrangements.

© 2016 Corning Incorporated. All Rights Reserved.

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On October 28, 2015, Corning entered into an accelerated share repurchase agreement (“ASR”) with Morgan Stanley & Co. LLC (“Morgan Stanley”) to repurchase $1.25 billion of Corning’s common stock (the “2015 ASR agreement”).  The 2015 ASR agreement was executed under the July 2015 Repurchase Program.  On January 19, 2016, the 2015 ASR agreement was completed and Corning received an additional 15.9 million shares on January 22, 2016 to settle the 2015 ASR agreement.

In addition to the shares repurchased through the 2015 ASR agreement, during the three and six months ended June 30, 2016, we repurchased 40.9 million and 80.7 million shares of common stock for $810 million and $1,561 million, respectively, as part of the 2015 Repurchase Program.

Accumulated Other Comprehensive Income

In the three and six months ended June 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 June 30,				Six months ended June 30,
	2016		2015		2016		2015
Beginning balance	$	(743)	$	(837)	$	(1,171)	$	(581)
Other comprehensive income (loss)		240		(62)		625		(236)
Equity method affiliates		(44)		22		(1)		(60)
Net current-period other comprehensive income		196		(40)		624		(296)
Ending balance	$	(547)	$	(877)	$	(547)	$	(877)

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.

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

	Three months ended June 30,				Six months ended June 30,
	2016		2015		2016		2015
Beginning balance	$	(588)	$	(708)	$	(588)	$	(709)
Other comprehensive income (loss) before reclassifications (2)		(29)		(9)		(35)
Amounts reclassified from accumulated other comprehensive income (2)		29		8		36		10
Equity method affiliates (3)		265		6		264		(4)
Net current-period other comprehensive income		265		5		265		6
Ending balance	$	(323)	$	(703)	$	(323)	$	(703)

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

© 2016 Corning Incorporated. All Rights Reserved.

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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 $14 million and $15 million for the three months ended June 30, 2016 and 2015, respectively, and approximately $23 million and $25 million for the six months ended June 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 six months ended June 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	1,624	19.93
Exercised	(2,087)	13.13
Forfeited and Expired	(4,256)	26.08
Options Outstanding as of June 30, 2016	38,019	19.02	4.06	$110,178
Options Expected to Vest as of June 30, 2016	37,968	19.02	4.05	110,158
Options Exercisable as of June 30, 2016	33,177	18.78	3.36	108,177

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 June 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 June 30, 2016, there was approximately $9 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 1.9 years.  Compensation cost related to stock options was approximately $5 million and $7 million for the three months ended June 30, 2016 and 2015, respectively, and approximately $8 million and $11 million for the six months ended June 30, 2016 and 2015, respectively.

© 2016 Corning Incorporated. All Rights Reserved.

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Proceeds received from the exercise of stock options were $27 million and $98 million for the six months ended June 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 six months ended June 30, 2016 and 2015 was approximately $15 million and $46 million, respectively.  The income tax benefit realized from share-based compensation was not significant for the three and six months ended June 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 June 30,		Six months ended June 30,
	2016	2015	2016			2015
Expected volatility	40.2%	44.5%	40.2	-	43.1%	44.5	-	44.9%
Weighted-average volatility	40.2%	44.5%	40.2	-	43.1%	44.5	-	44.9%
Expected dividends	2.89%	2.24%	2.89	-	2.94%	1.92	-	2.24%
Risk-free rate	1.6%	1.9%	1.5	-	1.6%	1.9	-	1.9%
Average risk-free rate	1.6%	1.9%	1.5	-	1.6%	1.9	-	1.9%
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.

© 2016 Corning Incorporated. All Rights Reserved.

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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 six months ended June 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	1,279		20.44
Vested	(1,635)		14.25
Forfeited	(49)		21.00
Non-vested shares and share units at June 30, 2016	4,837	$	19.79

As of June 30, 2016, there was approximately $37 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 $9 million and $8 million for the three months ended June 30, 2016 and 2015, respectively, and approximately $15 million and $14 million for the six months ended June 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   June 30, 2016
	Net sales	$	801	$	782	$	259	$	266	$	215	$	37	$	2,360
	Depreciation (1)	$	149	$	43	$	33	$	27	$	13	$	11	$	276
	Amortization of purchased intangibles			$	8					$	5	$	2	$	15
	Research, development and engineering expenses (2)	$	17	$	36	$	26	$	34	$	6	$	45	$	164
	Restructuring, impairment and other charges	$	2					$	12	$	1	$	1	$	16
	Equity in earnings of affiliated companies											$	(8)	$	(8)
	Income tax (provision) benefit	$	(86)	$	(39)	$	(19)	$	(19)	$	(8)	$	23	$	(148)
	Net income (loss) (3)	$	204	$	77	$	37	$	38	$	17	$	(55)	$	318

		Display Technologies		Optical Communications		Environmental Technologies		Specialty Materials		Life Sciences		All Other		Total
Three months ended   June 30, 2015
	Net sales	$	789	$	800	$	260	$	272	$	211	$	11	$	2,343
	Depreciation (1)	$	152	$	43	$	32	$	27	$	15	$	11	$	280
	Amortization of purchased intangibles			$	11					$	5			$	16
	Research, development and engineering expenses (2)	$	26	$	35	$	23	$	29	$	6	$	44	$	163
	Restructuring, impairment and other charges							$	3					$	3
	Equity in earnings of affiliated companies	$	(3)									$	6	$	3
	Income tax (provision) benefit	$	(136)	$	(37)	$	(22)	$	(22)	$	(9)	$	21	$	(205)
	Net income (loss) (3)	$	303	$	77	$	46	$	44	$	18	$	(45)	$	443

© 2016 Corning Incorporated. All Rights Reserved.

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		Display Technologies		Optical Communications		Environmental Technologies		Specialty Materials		Life Sciences		All Other		Total
Six months ended   June 30, 2016
	Net sales	$	1,506	$	1,391	$	523	$	493	$	419	$	75	$	4,407
	Depreciation (1)	$	300	$	84	$	65	$	55	$	28	$	22	$	554
	Amortization of purchased intangibles			$	15					$	10	$	4	$	29
	Research, development and engineering expenses (2)	$	35	$	73	$	51	$	65	$	12	$	92	$	328
	Restructuring, impairment and other charges	$	16	$	6	$	5	$	24	$	5	$	61	$	117
	Equity in earnings of affiliated companies											$	(5)	$	(5)
	Income tax (provision) benefit	$	(179)	$	(50)	$	(35)	$	(31)	$	(14)	$	66	$	(243)
	Net income (loss) (3)	$	413	$	94	$	71	$	64	$	29	$	(140)	$	531

		Display Technologies		Optical Communications		Environmental Technologies		Specialty Materials		Life Sciences		All Other		Total
Six months ended   June 30, 2015
	Net sales	$	1,597	$	1,497	$	542	$	544	$	408	$	20	$	4,608
	Depreciation (1)	$	308	$	81	$	61	$	53	$	30	$	20	$	553
	Amortization of purchased intangibles			$	17					$	10			$	27
	Research, development and engineering expenses (2)	$	50	$	68	$	46	$	60	$	11	$	89	$	324
	Restructuring, impairment and other charges			$	(1)			$	3					$	2
	Equity in earnings of affiliated companies	$	(5)									$	8	$	3
	Income tax (provision) benefit	$	(268)	$	(66)	$	(45)	$	(43)	$	(17)	$	44	$	(395)
	Net income (loss) (3)	$	597	$	134	$	94	$	82	$	34	$	(93)	$	848

(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 June 30,				Six months ended June 30,
	2016		2015		2016		2015
Net income of reportable segments	$	373	$	488	$	671	$	941
Net loss of All Other		(55)		(45)		(140)		(93)
Unallocated amounts:
Net financing costs (1)		(29)		(25)		(58)		(49)
Stock-based compensation expense		(14)		(15)		(23)		(25)
Exploratory research		(28)		(28)		(55)		(54)
Corporate contributions		(16)		(12)		(23)		(24)
Gain on realignment of equity investment		2,676				2,676
Equity in earnings of affiliated companies, net of impairments (2)		48		59		104		153
Unrealized loss on foreign currency hedges related to translated earnings		(1,253)		(10)		(2,203)		(130)
Resolution of Department of Justice investigation		(98)				(98)
Income tax benefit		653		95		1,054		197
Other corporate items		(50)		(11)		(66)		(13)
Net income	$	2,207	$	496	$	1,839	$	903

(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.

© 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 June 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 are committed to increasing 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 second quarter and first half of 2016, our spending on research, development and engineering was $192 million and $382 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 six months ending June 30, 2016

Net sales in the second quarter and first half of 2016 were $2.4 billion and $4.4 billion, respectively, compared to $2.3 billion and $4.6 billion in the same periods in 2015.  The slight increase in sales in the second quarter was led by the impact of the acquisition of a glass tubing business and the formation of the Corning Pharmaceutical Technologies business completed in the fourth quarter of 2015, coupled with slightly higher sales in the Display Technologies and Life Sciences segments, offset by lower sales in the Optical Communications and Specialty Materials segments.  The decrease in sales in the first half of 2016 was primarily due to price declines in the Display Technologies segment and production issues in the Optical Communications segment related to the implementation of new manufacturing software, which limited our ability to fulfill customer orders.  Production returned to normal levels during the second quarter.

In the second quarter of 2016, we generated net income of $2.2 billion or $1.87 per share, compared to net income of $496 million or $0.36 per share for the same period in 2015.  The increase in net income 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 hedges related to translated earnings in the amount of $784 million, driven by the impact of the significant strengthening of the Japanese yen during the second quarter of 2016 on our larger hedge contract portfolio.  In January 2016, we purchased additional yen-denominated hedge contracts that extended our coverage through 2022;

© 2016 Corning Incorporated. All Rights Reserved.

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·   Lower net income in the Display Technologies segment, down $99 million, or 33%, primarily driven by price declines slightly higher than 10% and a decrease of $75 million in net realized gains from our yen and won-denominated currency hedge contracts, offset by a low single-digit percentage increase in volume and the positive impact on operations from the strengthening of the Japanese yen versus the U.S. dollar exchange rate; 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 three months ended June 30, 2016 in the amount of $59 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 $75 million in the realized gain from our foreign currency translation hedges related to translated earnings.

In the first half of 2016, we generated net income of $1.8 billion or $1.53 per share, compared to net income of $903 million or $0.65 per share for the same period in 2015.  The increase in net income in the first six months of 2016 was driven by the items positively impacting the second quarter described above, offset partially by the following items (amounts presented after tax):

·   The increase in unrealized losses from our foreign currency hedges related to translated earnings in the amount of $1.3 billion, driven by the impact of the significant strengthening of the Japanese yen during the first six months of 2016 on our larger hedge contract portfolio;

·   Lower net income in the Display Technologies segment, down $184 million, or 31%, primarily driven by price declines slightly higher than 10% and a decrease of $116 million in net realized gains from our yen and won-denominated currency hedge contracts, offset by the positive impact on operations from the strengthening of the Japanese yen versus the U.S. dollar exchange rate;

·   A decrease of $40 million, or 30%, in the Optical Communications segment, driven primarily by production issues related to the implementation of new manufacturing software, which limited our ability to fulfill customer orders; 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 six months ended June 30, 2016 in the amount of $88 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 $109 million in the realized gain from our foreign currency translation hedges related to translated earnings.

2016 Corporate Outlook

In 2016, Corning expects its Display Technologies segment to experience continued moderate sequential LCD glass price declines and LCD glass demand to grow in the mid-single digit percentage year over year, in line with total glass demand growth.  We anticipate that a rise in global demand for Corning’s carrier and enterprise network products will drive an increase in sales in our Optical Communications segment.  When compared to 2015, we expect sales to be down slightly in the Environmental Technologies segment, driven by lower year-over-year demand for heavy-duty diesel products, and in the Specialty Materials segment, to be consistent or down slightly, due to lower retail demand for smartphones and tablets.  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 second quarter follow (dollars in millions):

	Three months ended June 30,				% change	Six months ended June 30,				% change
	2016		2015		16 vs. 15	2016		2015		16 vs. 15
Net sales	$	2,360	$	2,343	1%	$	4,407	$	4,608	(4)%
Gross margin	$	951	$	975	(2)%	$	1,715	$	1,904	(10)%
(gross margin %)		40%		42%			39%		41%
Selling, general and administrative expenses	$	499	$	337	48%	$	802	$	653	23%
(as a % of net sales)		21%		14%			18%		14%
Research, development and engineering expenses	$	192	$	191	1%	$	382	$	380	1%
(as a % of net sales)		8%		8%			9%		8%
Equity in earnings of affiliated companies	$	41	$	62	(34)%	$	100	$	156	(36)%
(as a % of net sales)		2%		3%			2%		3%
Translated earnings contract (loss) gain, net	$	(1,201)	$	162	*	$	(2,058)	$	191	*
(as a % of net sales)		(51)%		7%			(47)%		4%
Gain on realignment of equity investment	$	2,676			*	$	2,676			*
(as a % of net sales)		113%					61%
Income before income taxes	$	1,703	$	606	181%	$	1,031	$	1,099	(6)%
(as a % of net sales)		72%		26%			23%		24%
Benefit (provision) for income taxes	$	504	$	(110)	*	$	808	$	(196)	*
(as a % of net sales)		21%		(5)%			18%		(4)%
Net income attributable to Corning Incorporated	$	2,207	$	496	345%	$	1,839	$	903	104%
(as a % of net sales)		94%		21%			42%		20%

* 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 June 30,				% Change	Six months ended June 30,				% Change
	2016		2015		16 vs. 15	2016		2015		16 vs. 15
Display Technologies	$	801	$	789	2%	$	1,506	$	1,597	(6)%
Optical Communications		782		800	(2)%		1,391		1,497	(7)%
Environmental Technologies		259		260	-		523		542	(4)%
Specialty Materials		266		272	(2)%		493		544	(9)%
Life Sciences		215		211	2%		419		408	3%
All Other		37		11	236%		75		20	275%
Total net sales	$	2,360	$	2,343	1%	$	4,407	$	4,608	(4)%

For the three months ended June 30, 2016, net sales increased by $17 million, or 1%, when compared to the same period in 2015.  The primary sales drivers by segment were as follows:

·   An increase of $12 million in the Display Technologies segment, driven by a low single-digit percentage increase in volume and the impact of the strengthening of the Japanese yen on operations in the amount of $96 million, partially offset by price declines slightly higher than 10%;

·   A decrease of $18 million in the Optical Communications segment, driven primarily by production issues related to the implementation of new manufacturing software;

·   A decrease in the Environmental Technologies segment in the amount of $1 million.  The increase in light-duty substrates of $9 million was offset by a decline of $10 million in diesel products;

·   A decrease of $6 million in the Specialty Materials segment, driven by a decline in volume of Corning Gorilla Glass products;

·   An increase of $4 million in the Life Sciences segment; and

·   An increase of $26 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 six months ended June 30, 2016, net sales decreased by $201 million, or 4%, when compared to the same period in 2015.  The primary sales drivers by segment were as follows:

·   A decrease of $91 million in the Display Technologies segment, driven by price declines slightly higher than 10%, offset somewhat by the impact of the strengthening of the Japanese yen on operations in the amount of $136 million;

·   A decrease of $106 million in the Optical Communications segment, driven primarily by production issues related to the implementation of new manufacturing software;

·   A decrease in the Environmental Technologies segment in the amount of $19 million driven by a decline of $32 million in sales of diesel products, offset slightly by an increase of $13 million in sales of light-duty substrates;

·   A decrease of $51 million in the Specialty Materials segment, driven by a decline in volume of Corning Gorilla Glass products;

·   An increase of $11 million in the Life Sciences segment, driven by volume growth in Europe, North America and China; and

·   An increase of $55 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 six months ended June 30, 2016, the translation impact of fluctuations in foreign currency exchange rates, primarily the Japanese yen, positively impacted Corning’s consolidated net sales by $89 million and $113 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 and six months ended June 30, 2016, gross margin dollars and gross margin as a percentage of net sales declined when compared to the same periods last year, down $24 million and 2%, and $189 million and 2%, respectively, primarily driven by 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 second quarter 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 second quarter of 2015, selling, general and administrative expenses increased by $162 million in the three months ended June 30, 2016, driven by the following items:

·   An increase of $66 million in acquisition-related costs primarily related to the realignment of our equity interests in Dow Corning and an acquisition completed in the second quarter of 2016;

·   An increase of $52 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;

·   The negative impact of a contingent consideration fair value adjustment of $27 million; and

·   An increase of $19 million in the mark-to-market of our defined benefit pension plans.

When compared to the first half of 2015, selling, general and administrative expenses increased by $149 million in the six months ended June 30, 2016, driven by the following items:

·   An increase of $61 million in acquisition-related costs primarily related to the realignment of our equity interests in Dow Corning and an acquisition completed in the second quarter of 2016;

·   An increase of $51 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;

·   A $16 million change in the contingent consideration fair value adjustment; and

·   An increase of $26 million in the mark-to-market of our defined benefit pension plans.

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.

Research, Development and Engineering Expenses

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

© 2016 Corning Incorporated. All Rights Reserved.

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Equity in Earnings of Affiliated Companies

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

	Three months ended June 30,				Six months ended June 30,
	2016 (1)		2015		2016 (1)		2015
Dow Corning Corporation	$	26	$	57	$	82	$	149
Hemlock Semiconductor Group		22				22
All other		(7)		5		(4)		7
Total equity earnings	$	41	$	62	$	100	$	156

(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.  Results also include gross equity earnings for Hemlock Semiconductor Group from the date of the realignment to June 30, 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 six months ending June 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 one month 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 June 30, 2016				Three months ended June 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, net	$	52	$	33	$	172	$	108	$	(120)	$	(75)
Unrealized (losses) gains		(1,253)		(791)		(10)		(7)		(1,243)		(784)
Total translated earnings contract (loss) gain	$	(1,201)	$	(758)	$	162	$	101	$	(1,363)	$	(859)

	Six months ended June 30, 2016				Six months ended June 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, net	$	145	$	92	$	321	$	201	$	(176)	$	(109)
Unrealized (losses) gains		(2,203)		(1,390)		(130)		(82)		(2,073)		(1,308)
Total translated earnings contract (loss) gain	$	(2,058)	$	(1,298)	$	191	$	119	$	(2,249)	$	(1,417)

The gross notional amount outstanding for our foreign currency hedges related to translated earnings is $19.1 billion, and is comprised of the following:  1) Japanese yen-denominated hedges - $16.8 billion; 2) South Korean won-denominated hedges - $2 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 six months ended June 30, 2016 when compared to the same periods in 2015 in the amounts of $81 million and $117 million, respectively.

Benefit (Provision) for Income Taxes

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

	Three months ended June 30,				Six months ended June 30,
	2016		2015		2016		2015
Benefit (provision) for income taxes	$	504	$	(110)	$	808	$	(196)
Effective tax rate		(29.6%)		18.2%		(78.4%)		17.8%

© 2016 Corning Incorporated. All Rights Reserved.

36

For the three and six months ended June 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 interests 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 six months ended June 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 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 June 30,				Six months ended June 30,
	2016		2015		2016		2015
Net income attributable to Corning Incorporated	$	2,207	$	496	$	1,839	$	903
Net income attributable to Corning Incorporated used in basic earnings per common share calculation (1)	$	2,183	$	472	$	1,790	$	854
Net income attributable to Corning Incorporated used in diluted earnings per common share calculation (1)	$	2,207	$	496	$	1,839	$	903
Basic earnings per common share	$	2.06	$	0.38	$	1.66	$	0.68
Diluted earnings per common share	$	1.87	$	0.36	$	1.53	$	0.65
Weighted-average common shares outstanding - basic		1,059		1,246		1,081		1,257
Weighted-average common shares outstanding - diluted		1,182		1,371		1,204		1,383

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

Comprehensive Income

For the three and six months ended June 30, 2016, comprehensive income increased by $2,184 million and $2,065 million, respectively, when compared to the same periods in 2015, driven by an increase in net income attributable to Corning Incorporated of $1,711 million and $936 million, respectively, the positive impact of $236 million and $920 million, respectively, due to the change in foreign currency translation gains and losses and the release of unamortized actuarial losses as a result of the realignment of our equity interests in Dow Corning on May 31, 2016.

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

© 2016 Corning Incorporated. All Rights Reserved.

37

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 (loss) 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 June 30,				% change	Six months ended June 30,				% change
	2016		2015		16 vs. 15	2016		2015		16 vs. 15
Core net sales	$	2,440	$	2,517	(3)%	$	4,611	$	4,947	(7)%
Core equity in earnings of affiliated companies	$	57	$	71	(20)%	$	119	$	124	(4)%
Core earnings	$	434	$	522	(17)%	$	774	$	1,006	(23)%

Core Net Sales

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

	Three months ended June 30,				% change	Six months ended June 30,				% change
	2016		2015		16 vs. 15	2016		2015		16 vs. 15
Display Technologies	$	880	$	963	(9)%	$	1,709	$	1,935	(12)%
Optical Communications		782		800	(2)%		1,391		1,497	(7)%
Environmental Technologies		259		260			523		542	(4)%
Specialty Materials		266		272	(2)%		493		544	(9)%
Life Sciences		215		211	2%		419		408	3%
All Other		38		11	245%		76		21	262%
Total core net sales	$	2,440	$	2,517	(3)%	$	4,611	$	4,947	(7)%

© 2016 Corning Incorporated. All Rights Reserved.

38

Core net sales decreased by $77 million and $336 million in the three and six months ended June 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 second quarter of 2015, core net sales in the Display Technologies segment decreased by $83 million, or 9%, in the second quarter of 2016, driven by price declines slightly higher than 10%, offset slightly by an increase in volume in the low single-digits.

When compared to the first half of 2015, core net sales in the Display Technologies segment decreased by $226 million, or 12%, in the first half of 2016, driven by 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 June 30,				Six months ended June 30,
	2016 (1)		2015		2016 (1)		2015
Dow Corning Corporation	$	40	$	63	$	98	$	114
Hemlock Semiconductor Group		22				22
All other		(5)		8		(1)		10
Total core equity earnings	$	57	$	71	$	119	$	124

(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.  Results also include gross equity earnings for Hemlock Semiconductor Group from the date of the realignment to June 30, 2016.

Core Earnings

In the three and six months ended June 30, 2016, we generated core earnings of $434 million or $0.37 per share and $774 million, or $0.64 per share, respectively, compared to $522 million or $0.38 per share and $1,006 million and $0.73 per share in the same periods in 2015.  The decrease in 2016 was driven by lower core earnings in the Display Technologies segment, due to price declines slightly higher than 10%, and in the Optical Communications segment, driven by production issues related to the implementation of new manufacturing software, which limited our ability to fulfill customer orders.

Included in core earnings for the three and six months ended June 30, 2016 is net periodic pension expense in the amounts of $13 million and $25 million, respectively, and for the same periods in 2015, $16 million and $32 million, respectively.  Refer to Note 11 (Employee Retirement Plans) to the Consolidated Financial Statements for additional information.

© 2016 Corning Incorporated. All Rights Reserved.

39

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 June 30,				Six months ended June 30,
	2016		2015		2016		2015
Core earnings attributable to Corning Incorporated	$	434	$	522	$	774	$	1,006
Less:  Series A convertible preferred stock dividend		24		24		49		49
Core earnings available to common stockholders - basic		410		498		725		957
Add:  Series A convertible preferred stock dividend		24		24		49		49
Core earnings available to common stockholders - diluted	$	434	$	522	$	774	$	1,006
Weighted-average common shares outstanding - basic		1,059		1,246		1,081		1,257
Effect of dilutive securities:
Stock options and other dilutive securities		8		10		8		11
Series A convertible preferred stock		115		115		115		115
Weighted-average common shares outstanding - diluted		1,182		1,371		1,204		1,383
Core basic earnings per common share	$	0.39	$	0.40	$	0.67	$	0.76
Core diluted earnings per common share	$	0.37	$	0.38	$	0.64	$	0.73

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.

40

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 June 30, 2016
	Net sales		Equity earnings		Income before income taxes		Net income		Effective tax rate	Per share
As reported - GAAP	$	2,360	$	41	$	1,703	$	2,207	(29.6)%	1.87
Constant-yen (1)		78		2		75		56		0.05
Constant-won (1)		2				(12)		(9)		(0.01)
Foreign currency hedges related to translated earnings (2)						1,201		758		0.64
Acquisition-related costs (3)						80		74		0.06
Discrete tax items and other tax-related adjustments (4)								(111)		(0.09)
Litigation, regulatory and other legal matters (5)						55		70		0.06
Restructuring, impairment and other charges (6)						11		7		0.01
Equity in earnings of affiliated companies (7)				14		14		13		0.01
Impacts from the acquisition of Samsung Corning Precision Materials (8)						15		12		0.01
Pension mark-to-market(10)						27		18		0.02
Gain on realignment of equity investment(11)						(2,676)		(2,676)		(2.26)
Taiwan power outage(12)						20		15		0.01
Core performance measures	$	2,440	$	57	$	513	$	434	15.4%	0.37

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 June 30, 2015
	Net sales		Equity earnings		Income before income taxes		Net income		Effective tax rate	Per share
As reported - GAAP	$	2,343	$	62	$	606	$	496	18.2%	0.36
Constant-yen (1)		174		2		141		104		0.08
Constant-won (1)						1
Foreign currency hedges related to translated earnings (2)						(162)		(101)		(0.07)
Acquisition-related costs (3)						12		7		0.01
Litigation, regulatory and other legal matters (5)						2		1
Restructuring, impairment and other charges (6)						3		2
Equity in earnings of affiliated companies (7)				7		7		7		0.01
Impacts from the acquisition of Samsung Corning Precision Materials (8)						(11)		(9)		(0.01)
Post-combination expenses (9)						16		10		0.01
Pension mark-to-market(10)						8		5
Core performance measures	$	2,517	$	71	$	623	$	522	16.2%	0.38

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

	Six months ended June 30, 2016
	Net sales		Equity earnings		Income before income taxes		Net income		Effective tax rate	Per share
As reported – GAAP	$	4,407	$	100	$	1,031	$	1,839	(78.4)%	1.53
Constant-yen (1)		202		4		185		134		0.11
Constant-won (1)		2		(1)		(32)		(23)		(0.02)
Foreign currency hedges related to translated earnings (2)						2,058		1,298		1.08
Acquisition-related costs (3)						94		84		0.07
Discrete tax items and other tax-related adjustments (4)								(89)		(0.07)
Litigation, regulatory and other legal matters (5)						55		70		0.06
Restructuring, impairment and other charges (6)						120		82		0.07
Equity in earnings of affiliated companies (7)				16		16		15		0.01
Impacts from the acquisition of Samsung Corning Precision Materials (8)						4		3
Pension mark-to-market(10)						34		22		0.02
Gain on realignment of equity investment(11)						(2,676)		(2,676)		(2.22)
Taiwan power outage(12)						20		15		0.01
Core performance measures	$	4,611	$	119	$	909	$	774	14.9%	0.64

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

	Six months ended June 30, 2015
	Net sales		Equity earnings		Income before income taxes		Net income		Effective tax rate	Per share
As reported - GAAP	$	4,608	$	156	$	1,099	$	903	17.8%	0.65
Constant-yen (1)		339		2		275		202		0.15
Constant-won (1)						1
Foreign currency hedges related to translated earnings (2)						(191)		(119)		(0.09)
Acquisition-related costs (3)						31		20		0.01
Discrete tax items and other tax-related adjustments (4)								11		0.01
Litigation, regulatory and other legal matters (5)						3		2
Restructuring, impairment and other charges (6)						5		5
Equity in earnings of affiliated companies (7)				(34)		(34)		(32)		(0.02)
Impacts from the acquisition of Samsung Corning Precision Materials (8)						(9)		(7)		(0.01)
Post-combination expenses (9)						25		16		0.01
Pension mark-to-market(10)						8		5
Core performance measures	$	4,947	$	124	$	1,213	$	1,006	17.1%	0.73

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.

44

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 second quarter of 2016.  The impact in the second quarter 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 latter half 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 June 30, 2016				Six months ended June 30, 2016
(in millions)	Net sales		Net income		Net sales		Net income
As reported - GAAP	$	801	$	204	$	1,506	$	413
Constant-yen (1)		78		55		202		136
Constant-won (1)		1		(8)		1		(21)
Foreign currency hedges related to translated earnings (2)				(33)				(91)
Restructuring, impairment and other charges (6)								13
Impacts from the acquisition of Samsung Corning Precision Materials (8)				12				3
Taiwan power outage (12)				7				7
Core performance	$	880	$	237	$	1,709	$	460

© 2016 Corning Incorporated. All Rights Reserved.

46

	Three months ended June 30, 2015				Six months ended June 30, 2015
(in millions)	Net sales		Net income		Net sales		Net income
As reported - GAAP	$	789	$	303	$	1,597	$	597
Constant-yen (1)		174		105		338		204
Foreign currency hedges related to translated earnings (2)				(108)				(207)
Impacts from the acquisition of Samsung Corning Precision Materials (8)				(10)				(10)
Core performance	$	963	$	290	$	1,935	$	584

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

When compared to the same period in 2015, the increase in net sales of $12 million, or 2%, in the second quarter of 2016 was driven by an increase in volume in the low single-digits in percentage terms and the positive impact from the strengthening of the Japanese yen in the amount of $96 million, partially offset by LCD glass price declines slightly higher than 10%.  Sequentially, the worldwide glass market and Corning’s volume increased in the high-single digit percent range in the second quarter and LCD glass price declines were smaller than those experienced in the first quarter.

When compared to the same period in 2015, the decrease in net sales of $91 million, or 6%, in the first six months of 2016 was driven by price declines slightly higher than 10%, partially offset by the positive impact from the strengthening of the Japanese yen in the amount of $136 million.  Volume decreased in the low single-digits compared to the first half of 2015.

Net income in the Display Technologies segment decreased by $99 million, or 33%, in the three months ended June 30, 2016, driven primarily by the price declines described above, a decrease of $75 million in the realized gain from our yen and won-denominated currency hedges and the negative impact from the change in the contingent consideration fair value adjustment in the amount of $22 million, offset by the positive impact of the strengthening of the yen, an increase in volume in the low single-digits in percentage terms, improvements in manufacturing efficiency and a decline in operating expenses.

Net income in the Display Technologies segment decreased by $184 million, or 31%, in the six months ended June 30, 2016, driven primarily by the price declines described above, a decrease of $116 million in the realized gain from our yen and won-denominated currency hedges and the negative impact from the change in the contingent consideration fair value adjustment in the amount of $13 million, offset by the positive impact of the strengthening of the yen, improvements in manufacturing efficiency and a decline in operating expenses.

Core Performance

When compared to the same periods in 2015, core net sales in the Display Technologies segment decreased by $83 million, or 9%, and $226 million, or 12%, in the second quarter and first half of 2016, respectively, driven by price declines slightly higher than 10%.  Core earnings also declined, down $53 million, or 18%, and $124 million, or 21%, respectively, driven by price declines slightly higher than 10%, offset by improvements in manufacturing efficiency and a decline in operating expenses.  Volume increased in the low single-digits in the second quarter and decreased in the low single-digits in the first half of 2016.

Outlook:

In the third quarter, demand for Corning’s LCD glass is expected to increase by a mid-single digit percentage sequentially, and the company expects price declines to remain moderate and consistent with the second quarter.

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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 June 30, 2016				Six months ended June 30, 2016
(in millions)	Net sales		Net income		Net sales		Net income
As reported - GAAP	$	782	$	77	$	1,391	$	94
Acquisition-related costs (3)				9				13
Restructuring, impairment and other charges (6)								5
Core performance	$	782	$	86	$	1,391	$	112

	Three months ended June 30, 2015				Six months ended June 30, 2015
(in millions)	Net sales		Net income		Net sales		Net income
As reported - GAAP	$	800	$	77	$	1,497	$	134
Acquisition-related costs (3)				4				14
Restructuring, impairment and other charges (6)								(1)
Post-combination expenses (9)				10				16
Core performance	$	800	$	91	$	1,497	$	163

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

In the second quarter and first half of 2016, net sales of the Optical Communications segment decreased by $18 million, or 2%, and $106 million, or 7%, respectively, when compared to the same periods in 2015.  The 2016 decline was driven by production issues related to the implementation of new manufacturing software, which constrained our ability to manufacture product and limited our ability to fulfill customer orders.  Production returned to normal levels towards the end of the second quarter of 2016.  Net sales were not materially impacted in the second quarter and were negatively impacted in the amount of $8 million from movements in foreign exchange rates in the six months ended June 30, 2016 when compared to the same periods in 2015.

Net income in the second quarter of 2016 was consistent with the second quarter of 2015.  The decrease in net income of $40 million, or 30%, in the six months ended June 30, 2016 was primarily driven by production issues related to the implementation of new manufacturing software.  Movements in foreign exchange rates positively impacted segment net income in the amounts of $3 million and $7 million in the three and six months ended June 30, 2016 when compared to the same periods in 2015.

Core Performance

Core earnings decreased in the three and six months of 2016 by $5 million, or 5%, and $51 million, or 31%, respectively, driven by the items impacting our As Reported results described above.

Outlook:

In the third quarter, Corning expects Optical Communications demand to remain strong and sales to grow approximately 10% on a year-over-year basis.

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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 June 30, 2016				Six months ended June 30, 2016
(in millions)	Net sales		Net income		Net sales		Net income
As reported - GAAP	$	259	$	37	$	523	$	71
Restructuring, impairment and other charges (6)								3
Core performance measures	$	259	$	37	$	523	$	74

	Three months ended June 30, 2015				Six months ended June 30, 2015
(in millions)	Net sales		Net income		Net sales		Net income
As reported - GAAP	$	260	$	46	$	542	$	94
Core performance measures	$	260	$	46	$	542	$	94

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

In the three months ended June 30, 2016, net sales of this segment remained relatively consistent with the same period in 2015, with an increase of $9 million in light-duty substrates and $6 million in light-duty diesel products offset by a decline of $16 million in heavy-duty diesel products.  In the six months ended June 30, 2016, net sales decreased by $19 million driven by lower sales of diesel products due to the weakening of the North American truck market, offset partially by an increase of $14 million in sales of light-duty substrates, driven by strength in the North American and European markets.  Movements in foreign exchange rates negatively impacted segment net sales in the amounts of $3 million and $10 million, respectively, in the second quarter and first half of 2016, when compared to the same periods in 2015.

Net income decreased by $9 million, or 20%, and $23 million, or 24%, respectively, driven by lower sales of heavy-duty diesel products.  Movements in foreign exchange rates versus the U.S. dollar negatively impacted net income in this segment in the amount of $2 million and $4 million, respectively, in the second quarter and first half of 2016, when compared to the same periods in 2015.

Core Performance

Core earnings decreased by $9 million, or 20%, and $20 million, or 21%, in the second quarter and first half of 2016, driven by the items impacting our As Reported results described above.

Outlook:

In the third quarter, the company anticipates Environmental Technologies sales will decline slightly on a year-over-year basis due to foreign exchange rates.  Demand for light-duty products in the automotive market is expected to remain strong, while weakness will likely continue in the heavy-duty truck market in North America and China.

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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 June 30, 2016				Six months ended June 30, 2016
(in millions)	Net sales		Net income		Net sales		Net income
As reported - GAAP	$	266	$	38	$	493	$	64
Constant-yen (1)								(1)
Constant-won (1)								(1)
Restructuring, impairment and other charges (6)				6				14
Taiwan power outage (12)				4				4
Core performance	$	266	$	48	$	493	$	80

	Three months ended June 30, 2015				Six months ended June 30, 2015
(in millions)	Net sales		Net income		Net sales		Net income
As reported - GAAP	$	272	$	44	$	544	$	82
Constant-yen (1)				(2)				(3)
Foreign currency hedges related to translated earnings (2)								5
Restructuring, impairment and other charges (6)				2				6
Core performance	$	272	$	44	$	544	$	90

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 for the three and six months ended June 30, 2016 decreased by $6 million, or 2%, and $51 million, or 9%, respectively, when compared to the same periods in 2015, driven by a decline in volume 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.  Movements in foreign exchange rates did not materially impact net sales in the Specialty Materials segment in the three and six months ended June 30, 2016 when compared to the same periods of 2015.

When compared to the same periods last year, the decrease in net income of $6 million, or 14%, and $18 million, or 22%, respectively, in the three and six months ended June 30, 2016, was driven by the decrease in sales of Corning Gorilla Glass products described above, higher restructuring, impairment and other charges and the impact of a power outage that temporarily halted production at our Tainan, Taiwan manufacturing location, offset somewhat by lower manufacturing costs.  Movements in foreign exchange rates did not materially impact net income in the Specialty Materials segment in the three and six months ended June 30, 2016 when compared to the same periods of 2015.

Core Performance

Core earnings increased by $4 million, or 9%, for the three months ended June 30, 2016, driven by lower manufacturing costs, offset partially by lower sales of Corning Gorilla Glass products and higher research and development costs.  Core earnings declined by $10 million, or 11%, for the six months ended June 30, 2016, driven primarily by a decline in sales of Corning Gorilla Glass products and higher research and development costs.  Movements in foreign exchange rates did not materially impact core earnings in the Specialty Materials segment in the three and six months ended June 30, 2016 when compared to the same periods of 2015.

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Outlook:

Third-quarter segment sales are expected to be consistent with last year’s third-quarter sales, and up sequentially, due to increased Gorilla Glass demand as the mobile device supply chain ramps up for new product launches in the second half of this year.

Full-year sales for Specialty Materials are expected to be consistent with, or down slightly from 2015.

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 June 30, 2016				Six months ended June 30, 2016
(in millions)	Net sales		Net income		Net sales		Net income
As reported – GAAP	$	215	$	17	$	419	$	29
Acquisition-related costs (3)				3				6
Restructuring, impairment and other charges (6)				1				4
Core performance	$	215	$	21	$	419	$	39

	Three months ended June 30, 2015				Six months ended June 30, 2015
(in millions)	Net sales		Net income		Net sales		Net income
As reported – GAAP	$	211	$	18	$	408	$	34
Acquisition-related costs (3)				3				6
Core performance	$	211	$	21	$	408	$	40

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 increased by $4 million, or 2%, and $11 million, or 3%, in the three and six months ended June 30, 2016 when compared to the same period last year, driven by volume growth in Europe, North America and China, slightly offset by the impact of movements in foreign exchange rates in the amounts of $2 million and $5 million, respectively.

Net income declined by $1 million, or 6%, and $5 million, or 15%, respectively, when compared to the second quarter and first half of 2015, driven by the negative impact of movements in foreign exchange rates in the amounts of $2 million and $3 million, respectively.

Core Performance

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

Outlook:

Third-quarter sales are expected to grow by a low single-digit percentage.

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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 June 30,				Six months ended June 30,
As Reported	2016		2015		2016		2015
Net sales	$	37	$	11	$	75	$	20
Research, development and engineering expenses	$	45	$	44	$	92	$	89
Equity earnings of affiliated companies	$	(8)	$	6	$	(5)	$	8
Net loss	$	(55)	$	(45)	$	(140)	$	(93)

The increase in net sales of this segment in the three and six months ended June 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 six months ended June 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.

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.

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.  This increase marks the fifth dividend increase since October 2011.

Share Repurchase Program

On January 19, 2016, Corning received an additional 15.9 million shares to settle the ASR that Corning entered into with Morgan Stanley to repurchase $1.25 billion of Corning’s common stock under the 2015 ASR agreement.

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In addition, during the three and six months ended June 30, 2016, the Company repurchased 40.9 million and 80.7 million shares of common stock for $810 million and $1,561 million, respectively, through open market repurchases as part of its 2015 Repurchase Program.

On July 27, 2016, the Company announced its plan to initiate a new $2 billion accelerated share repurchase program on July 28, 2016, under its $4 billion share repurchase program authorization dated on October 26, 2015.

Capital Spending

Capital spending totaled $533 million and $641 million for the six months ended June 30, 2016 and 2015, respectively.  Spending in the first six 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 $1.3 billion.

Cash Flow

Summary of cash flow data (in millions):

	Six months ended June 30,
	2016		2015
Net cash provided by operating activities	$	443	$	1,148
Net cash provided by (used in) investing activities	$	4,238	$	(623)
Net cash used in financing activities	$	(2,123)	$	(609)

Net cash provided by operating activities decreased in the six months ended June 30, 2016 when compared to the same period last year, driven largely by a decrease in net income adjusted for the gain on the realignment of Dow Corning and the loss on translated earnings contracts, a decline in dividends received from equity affiliates, higher tax payments and the change in unrealized translation gains and losses on transactions.

Net cash provided by investing activities increased substantially in the six months ended June 30, 2016, when compared to the same period last year, driven by the cash received on the realignment of Dow Corning 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 six months ended June 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 second quarter of 2015.

Key Balance Sheet Data

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

	As of June 30, 2016		As of December 31, 2015
Working capital	$	8,299	$	5,455
Current ratio		4.4:1		2.9:1
Trade accounts receivable, net of allowances	$	1,544	$	1,372
Days sales outstanding		59		55
Inventories	$	1,501	$	1,385
Inventory turns		3.8		4.0
Days payable outstanding (1)		42		42
Long-term debt	$	3,918	$	3,890
Total debt to total capital		18%		19%

(1) Includes trade payables only.

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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 second quarter of 2016 with approximately $7.1 billion of cash and cash equivalents, an increase of $2.6 billion from December 31, 2015.  The increase in our cash balance was driven by the receipt of $4.8 billion from the realignment of our equity interests in Dow Corning completed on May 31, 2016 (refer to Note 9 (Investments) to the consolidated financial statements for further information on this transaction).  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 70% of the consolidated amount held in the United States at June 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.

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 maturities of the notes vary, but may not exceed 390 days from the date of issue.  The interest rates vary based on market conditions and the ratings assigned to the notes by credit rating agencies at the time of issuance.  The Company’s $2 billion revolving credit facility is available to support obligations under the commercial paper program, if needed.  At June 30, 2016, we had a balance of $252 million in outstanding commercial paper under this program.

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 June 30, 2016, our leverage using this measure was approximately 18% and we are in compliance with the financial covenant.

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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 June 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 six months of 2016.  For certain items, additional details are provided below.

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 June 30, 2016 and December 31, 2015, the carrying value of precious metals was higher than the fair market value by $863 million and $976 million, respectively.  These precious metals are utilized by the Display 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.

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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 June 30, 2016 and December 31, 2015, Corning had accrued approximately $47 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.

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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 “anticipates,” “expects,” “intends,” “plans,” “goals,” “believes,” “seeks,” “estimates,” “continues,” “forecasts,” “likely,” and similar expressions are forward-looking statements.  Forward-looking statements involve risks and uncertainties that may cause the actual outcome to be materially different.  Such risks and uncertainties 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;

- fluctuations in capital spending by customers;

- 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 six months ended June 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 June 30, 2016 the total gross notional value for the yen translated earnings contracts was $16.8 billion (at December 31, 2015: $8.3 billion), including zero-cost collars of $1.7 billion (at December 31, 2015: $2.0 billion) and average rate forwards of $15.1 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 June 30, 2016, the total net notional value of the zero-cost collars was $0.8 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 June 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 $1.9 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 June 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.

58

Part II – Other Information

ITEM 1.  LEGAL PROCEEDINGS

DowCorningCorporation.See our 2015 Form 10-K, Part I, Item 3. In light of the realignment of our ownership interest in Dow Corning Corporation on May 31, 2016, the Company 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, the Company will no longer provide litigation disclosure regarding Pittsburgh Corning Corporation.  For additional information and updates to estimated liabilities as of June 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 June 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 June 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.

59

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

This table provides information about our purchases of our common stock during the second 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)
April 1-30, 2016	8,459,400	$20.15	8,017,403	$3,359,380,344
May 1-31, 2016	17,427,641	$19.12	17,398,339	$3,026,767,345
June 1-30, 2016	15,464,666	$20.44	15,461,109	$2,710,793,928
Total	41,351,707	$19.82	40,876,851	$2,710,793,928

(1) This column reflects the following transactions during the second quarter of 2016:  (i) the deemed surrender to us of 437,525 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 37,331 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 40,876,851 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
	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
	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

© 2016 Corning Incorporated. All Rights Reserved.

61

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)
July 27, 2016	/s/ Edward Schlesinger
Date	Edward Schlesinger
	Vice President and Corporate Controller

© 2016 Corning Incorporated. All Rights Reserved.

62

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.

July 27, 2016

/s/ Wendell P. Weeks

Wendell P. Weeks

Chairman, Chief Executive Officer and President

(Principal Executive Officer)

© 2016 Corning Incorporated. All Rights Reserved.

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.

July 27, 2016

/s/ R. Tony Tripeny

R. Tony Tripeny

Senior Vice President and Chief Financial Officer

(Principal Financial Officer)

© 2016 Corning Incorporated. All Rights Reserved.

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 June 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:  July 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

© 2016 Corning Incorporated. All Rights Reserved.

XML

Document And Entity Information - shares	6 Months Ended
	Jun. 30, 2016	Jul. 15, 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)		1,036,877,161
Document Type	10-Q
Document Period End Date	Jun. 30, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q2
Amendment Flag	false

XML

Consolidated Statements of Income (Unaudited) - USD ($) $ in Millions		3 Months Ended		6 Months Ended
		Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Net sales		$ 2,360	$ 2,343	$ 4,407	$ 4,608
Cost of sales		1,409	1,368	2,692	2,704
Gross margin		951	975	1,715	1,904
Operating expenses:
Selling, general and administrative expenses		499	337	802	653
Research, development and engineering expenses		192	191	382	380
Amortization of purchased intangibles		15	16	29	28
Restructuring, impairment and other charges		(2)		78
Operating income		247	431	424	843
Equity in earnings of affiliated companies		41	62	100	156
Interest income		6	5	12	10
Interest expense		(40)	(33)	(81)	(63)
Translated earnings contract (loss) gain, net		(1,201)	162	(2,058)	191
Gain		2,676		2,676
Other expense, net		(26)	(21)	(42)	(38)
Income before income taxes		1,703	606	1,031	1,099
Benefit (provision) for income taxes (Note 5)		504	(110)	808	(196)
Net income attributable to Corning Incorporated		$ 2,207	$ 496	$ 1,839	$ 903
Earnings per common share attributable to Corning Incorporated:
Basic earnings per common share (in dollars per share)		$ 2.06	$ 0.38	$ 1.66	$ 0.68
Diluted earnings per common share (in dollars per share)		1.87	0.36	1.53	0.65
Dividends declared per common share (1) (in dollars per share)	[1]	$ 0.135	$ 0.12	$ 0.27	$ 0.12

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

XML

Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Net income	$ 2,207	$ 496	$ 1,839	$ 903
Foreign currency translation adjustments and other	196	(40)	624	(296)
Net unrealized (losses) gains on investments	(1)		(3)	1
Unamortized gains (losses) and prior service credits (costs) for postretirement benefit plans	265	5	265	6
Net unrealized (losses) gains on designated hedges	(22)		(41)	5
Other comprehensive income (loss), net of tax (Note 15)	438	(35)	845	(284)
Comprehensive income attributable to Corning Incorporated	$ 2,645	$ 461	$ 2,684	$ 619

XML

Consolidated Balance Sheets (Unaudited) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Current assets:
Cash and cash equivalents	$ 7,144	$ 4,500
Short-term investments, at fair value		100
Trade accounts receivable, net of doubtful accounts and allowances - $60 and $48	1,544	1,372
Inventories, net of inventory reserves - $157 and $146 (Note 8)	1,501	1,385
Other current assets	558	912
Total current assets	10,747	8,269
Investments (Note 9)	346	1,975
Property, plant and equipment, net of accumulated depreciation - $9,974 and $9,188	13,048	12,648
Goodwill, net (Note 10)	1,569	1,380
Other intangible assets, net (Note 10)	804	706
Deferred income taxes (Note 5)	2,952	2,056
Other assets	1,187	1,493
Total Assets	30,653	28,527
Current liabilities:
Current portion of long-term debt and short-term borrowings (Note 4)	279	572
Accounts payable	938	934
Other accrued liabilities (Note 3 and Note 12)	1,231	1,308
Total current liabilities	2,448	2,814
Long-term debt (Note 4)	3,918	3,890
Postretirement benefits other than pensions (Note 11)	710	718
Other liabilities (Note 3 and Note 12)	3,905	2,242
Total liabilities	10,981	9,664
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: 1,685 million and 1,681 million	842	840
Additional paid-in capital – common stock	13,668	13,352
Retained earnings	15,331	13,832
Treasury stock, at cost; Shares held: 648 million and 551 million	(11,566)	(9,725)
Accumulated other comprehensive loss	(966)	(1,811)
Total Corning Incorporated shareholders’ equity	19,609	18,788
Noncontrolling interests	63	75
Total equity	19,672	18,863
Total Liabilities and Equity	$ 30,653	$ 28,527

XML

Consolidated Balance Sheets (Unaudited) (Parentheticals) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Doubtful accounts and allowances	$ 60	$ 48
Inventory reserves	157	146
Accumulated depreciation	$ 9,974	$ 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

XML

Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Cash Flows from Operating Activities:
Net income	$ 1,839	$ 903
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	561	562
Amortization of purchased intangibles	29	28
Restructuring, impairment and other charges	78
Stock compensation charges	23	25
Equity in earnings of affiliated companies	(100)	(156)
Dividends received from affiliated companies	20	95
Deferred tax (benefit) provision	(898)	31
Restructuring payments	(7)	(23)
Employee benefit payments less than (in excess of) expense	15	(8)
Losses (gains) on foreign currency hedges related to translated earnings	2,058	(191)
Unrealized translation (gains) losses on transactions	(124)	236
Gain on realignment of equity investment	(2,676)
Changes in certain working capital items:
Trade accounts receivable	(103)	(25)
Inventories	(66)	(54)
Other current assets	(71)	(100)
Accounts payable and other current liabilities	(115)	(191)
Other, net	(20)	16
Net cash provided by operating activities	443	1,148
Cash Flows from Investing Activities:
Capital expenditures	(533)	(641)
Acquisitions of business, net of cash acquired	(279)	(531)
Investment in unconsolidated entities	(14)	(33)
Cash	4,818
(Payments) proceeds from loan repayments from unconsolidated entities	(3)	6
Short-term investments – acquisitions	(20)	(570)
Short-term investments – liquidations	121	825
Realized gains on foreign currency hedges related to translated earnings	145	321
Other, net	3
Net cash provided by (used in) investing activities	4,238	(623)
Cash Flows from Financing Activities:
Net repayments of short-term borrowings and current portion of long-term debt	(64)
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	(230)
Payments from settlement of interest rate swap arrangements		(10)
Proceeds from the exercise of stock options	(27)	(98)
Repurchases of common stock for treasury	(1,515)	(1,093)
Dividends paid	(340)	(350)
Net cash used in financing activities	(2,123)	(609)
Effect of exchange rates on cash	86	(257)
Net increase (decrease) in cash and cash equivalents	2,644	(341)
Cash and cash equivalents at beginning of period	4,500	5,309
Cash and cash equivalents at end of period	$ 7,144	$ 4,968

XML

Note 1 - Significant Accounting Policies

6 Months Ended

Jun. 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 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.

XML

Note 2 - Restructuring, Impairment and Other Charges

6 Months Ended

Jun. 30, 2016

Notes to Financial Statements

Restructuring and Related Activities Disclosure [Text Block]

2.      Restructuring, Impairment and Other Charges

2016 Activity

In the first half 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 six months ended June 30, 2016 (in millions):

	Reserve at January 1, 2016		Net Charges/ Reversals		Non-cash adjustments		Cash payments		Reserve at June 30, 2016
Restructuring:
Employee related costs	$	3	$	15	$	(1)	$	(6)	$	11
Other charges				1				(1)
Total restructuring activity	$	3	$	16	$	(1)	$	(7)	$	11
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

XML

Note 3 - Commitments, Contingencies, and Guarantees

6 Months Ended

Jun. 30, 2016

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

3.      Commitments, Contingencies and Guarantees

Pittsburgh Corning Corporation and Asbestos Litigation.

  Corning and PPG Industries, Inc. (“PPG”) each owned 50% of the capital stock of Pittsburgh Corning Corporation (“PCC”).  On April 16, 2000, PCC filed for Chapter 11 reorganization in the U.S. Bankruptcy Court for the Western District of Pennsylvania.  At the time PCC filed for bankruptcy protection, there were approximately 11,800 claims pending against Corning in state court lawsuits alleging various theories of liability based on exposure to PCC’s asbestos products and typically requesting monetary damages in excess of one million dollars per claim.  On April 27, 2016, the Modified Third Amended Plan of Reorganization for Pittsburgh Corning Corporation (the “Plan”) became effective.

As required by the Plan, Corning contributed its equity interests in PCC and Pittsburgh Corning Europe N.V. (“PCE”), a Belgian corporation, on April 27, 2016 and June 9, 2016, respectively, and recognized a gain of $56 million 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.  Corning must also contribute $290 million in a fixed series of payments.  Corning has the option to use its common stock rather than cash to make these payments, but the liability is fixed by dollar value and not the number of shares.  Assuming certain conditions are met, the Plan requires Corning to make: (1) one payment of $70 million on June 9, 2017; and (2) five additional payments of $35 million, $50 million, $35 million, $50 million, and $50 million, respectively, on each of the five subsequent anniversaries of the first payment, the final payment of which is subject to reduction based on the application of credits under certain circumstances.

Non-PCC Asbestos Litigation

In addition to the claims against Corning related to its ownership interest in PCC, at the time PCC filed for bankruptcy, Corning was a defendant in other cases alleging injuries from asbestos related to its Corhart business and seeking similar amounts of monetary damages per case (the “non-PCC asbestos claims”).  The Bankruptcy Court then granted a preliminary injunction (the “Stay”), which suspended all asbestos cases against PCC, PPG and Corning – including these non-PCC asbestos claims.  Approximately 9,700 such non-PCC asbestos claims (with approximately 37,300 claimants) may still be pending.  The Stay will be lifted on August 25, 2016.  The non-PCC asbestos claims against Corning have been covered, in part, by insurance without material impact to Corning to date.  As of June 30, 2016, Corning had received approximately $19 million in insurance payments for non-PCC asbestos claims that were subject to the Stay.  When the Stay is lifted, the non-PCC asbestos claims will be allowed to proceed against Corning.  Corning believes that the $150 million reserve for estimated asbestos litigation liabilities that was established in prior periods continues to be reasonable.  The liability for non-PCC asbestos claims was estimated based upon industry data for asbestos claims since Corning does not have recent claim history due to the Stay issued by the Bankruptcy Court.  The estimated liability 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.

Total Estimated Liability for the Amended PCC Plan and the Non-PCC Asbestos Claims

The liability for the Amended PCC Plan and the non-PCC asbestos claims was estimated to be $440 million at June 30, 2016, compared with an estimate of liability of $678 million at December 31, 2015.  The decline in the liability is due to the contribution of the equity interests of PCC and PCE in the total amount of $238 million, as required by the Plan.  The $440 million liability is comprised of $290 million for the fixed series of payments for the remaining PCC asbestos liability, and $150 million for the non-PCC asbestos claims, all referenced in the preceding paragraphs. At June 30, 2016, $370 million of the obligation, consisting of the $220 million for the fixed series of payments due in the years 2018 through 2022 and $150 million for the non-PCC asbestos claims, is classified as a non-current liability.  The amount of the obligation related to the fixed payment of $70 million due in the second quarter of 2017 is classified as a current liability because the contribution of those assets is expected to be made within the next twelve months.

The amount of the asbestos litigation liability for the periods ended June 30, 2016 and December 31, 2015 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 June 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 June 30, 2016 and December 31, 2015, contingent guarantees totaled a notional value of $190 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 $220 million at June 30, 2016 and December 31, 2015.

Product warranty liability accruals were considered insignificant at June 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 June 30, 2016 and December 31, 2015, Corning had accrued approximately $47 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 June 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

6 Months Ended

Jun. 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 June 30, 2016 and $4.1 billion at December 31, 2015, compared to recorded book values of $3.9 billion at June 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.  At June 30, 2016, Corning had $252 million in outstanding commercial paper as part of the Company’s commercial paper program established in the second quarter of 2013.  The estimated fair value of this commercial paper approximates its carrying value due to the short-term maturities.

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

6 Months Ended

Jun. 30, 2016

Notes to Financial Statements

Income Tax Disclosure [Text Block]

5.      Income Taxes

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

	Three months ended June 30,				Six months ended June 30,
	2016		2015		2016		2015
Benefit (provision) for income taxes	$	504	$	(110)	$	808	$	(196)
Effective tax rate		(29.6%)		18.2%		(78.4%)		17.8%

For the three and six months ended June 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 interests 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 six months ended June 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 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

6 Months Ended

Jun. 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 June 30,				Six months ended June 30,
	2016		2015		2016		2015
Net income attributable to Corning Incorporated	$	2,207	$	496	$	1,839	$	903
Less:  Series A convertible preferred stock dividend		24		24		49		49
Net income available to common stockholders - basic		2,183		472		1,790		854
Plus:  Series A convertible preferred stock dividend		24		24		49		49
Net income available to common stockholders - diluted	$	2,207	$	496	$	1,839	$	903
Weighted-average common shares outstanding - basic		1,059		1,246		1,081		1,257
Effect of dilutive securities:
Stock options and other dilutive securities		8		10		8		11
Series A convertible preferred stock		115		115		115		115
Weighted-average common shares outstanding - diluted		1,182		1,371		1,204		1,383
Basic earnings per common share	$	2.06	$	0.38	$	1.66	$	0.68
Diluted earnings per common share	$	1.87	$	0.36	$	1.53	$	0.65
Antidilutive potential shares excluded from diluted earnings per common share:
Employee stock options and awards		20		20		21		17
Total		20		20		21		17

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Note 7 - Available-for-Sale Investments

6 Months Ended

Jun. 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

The following is a summary of the fair value of available-for-sale investments (in millions):

	Amortized cost				Fair value
	June 30, 2016		December 31, 2015		June 30, 2016		December 31, 2015
Bonds, notes and other securities:
U.S. government and agencies			$	100			$	100
Total short-term investments			$	100			$	100
Asset-backed securities  (1)	$	34	$	37	$	30	$	33
Total long-term investments	$	34	$	37	$	30	$	33

1) Due after 10 years and are being reported at their final maturity dates.

We do not intend 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 six months ended June 30, 2016 and 2015, proceeds from sales and maturities of short-term investments totaled approximately $121 million and $0.8 billion, respectively.

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Note 8 - Inventories, Net of Inventory Reserves

6 Months Ended

Jun. 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):

	June 30, 2016		December 31, 2015
Finished goods	$	633	$	633
Work in process		293		264
Raw materials and accessories		274		200
Supplies and packing materials		301		288
Total inventories, net of inventory reserves	$	1,501	$	1,385

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Note 9 - Investments

6 Months Ended

Jun. 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 June 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			June 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%	$	279		422
					279		1,905
Other investments					67		70
Subtotal Investment Assets				$	346	$	1,975
Affiliated companies accounted for by the equity method
HSG  (2)(3)		50%		$	361
Subtotal Investment Liabilities				$	361

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

(2)   The negative carrying value of the investment in HSG, recorded in Other Liabilities, was reduced by $22 million due to equity earnings recognized for the month of June, 2016.

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

Dow Corning Corporation

For the period ended June 30, 2016, Corning reported Dow Corning equity earnings and dividends through May 31, 2016, the transaction date.  Dow Corning information presented below is shown for the two and five months ended May 31, 2016 (in millions):

	Three months ended June 30,				Six months ended June 30,
	2016		2015		2016		2015
Statement of Operations:
Net sales	$	898	$	1,424	$	2,215	$	2,788
Gross profit  (1)	$	238	$	364	$	588	$	722
Net income attributable to Dow Corning  (2)	$	52	$	113	$	163	$	298
Corning’s equity in earnings of Dow Corning	$	26	$	57	$	82	$	149

(1)   Gross profit for the three and six months ended June 30, 2016 includes research and development costs of $43 million and $100 million (2015: $63 million and $125 million).

(2)   In the first half of 2015 Dow Corning’s net income included a pre-tax gain of $178 million on the settlement of long-term sales agreements.

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Note 10 - Goodwill and Other Intangible Assets

6 Months Ended

Jun. 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 June 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
Foreign currency translation adjustment		8		1				4		1		14
Balance at June 30, 2016	$	622	$	129	$	150	$	566	$	102	$	1,569

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

Corning’s gross goodwill balances for the periods ended June 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 June 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):

	June 30, 2016						December 31, 2015
	Gross		Accumulated amortization		Net		Gross		Accumulated amortization		Net
Amortized intangible assets:
Patents, trademarks, and trade names	$	367	$	171	$	196	$	350	$	162	$	188
Customer lists and other		733		125		608		621		103		518
Total	$	1,100	$	296	$	804	$	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 six months of 2016, primarily due to acquisitions of $117 million of other intangible assets and foreign currency translation adjustments of $10 million, offset by amortization of $29 million.

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

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Note 11 - Employee Retirement Plans

6 Months Ended

Jun. 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 June 30,				Six months ended June 30,				Three months ended June 30,				Six months ended June 30,
	2016		2015		2016		2015		2016		2015		2016		2015
Service cost	$	21	$	22	$	43	$	45	$	2	$	4	$	4	$	7
Interest cost		31		37		62		73		6		8		13		16
Expected return on plan assets		(41)		(44)		(83)		(89)
Amortization of net loss												1				2
Amortization of prior service cost (credit)		2		1		3		3		(1)		(2)		(2)		(3)
Recognition of actuarial loss		28		8		35		8
Total pension and postretirement benefit expense	$	41	$	24	$	60	$	40	$	7	$	11	$	15	$	22

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Note 12 - Other Liabilities

6 Months Ended

Jun. 30, 2016

Notes to Financial Statements

Other Liabilities Disclosure [Text Block]

12. Other Liabilities

Other liabilities follow (in millions):

	June 30, 2016		December 31, 2015
Current liabilities:
Wages and employee benefits	$	386	$	491
Income taxes		82		53
Asbestos and other litigation reserves		76		238
Derivative instruments		211		55
Other current liabilities		476		471
Other accrued liabilities	$	1,231	$	1,308
Non-current liabilities:
Asbestos and other litigation reserves	$	394	$	440
Derivative instruments		1,400		88
Investment in Hemlock Semiconductor Group  (1)		361
Defined benefit pension plan liabilities		740		672
Other non-current liabilities		1,010		1,042
Other liabilities	$	3,905	$	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

6 Months Ended

Jun. 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 $19.1 billion at June 30, 2016 (at December 31, 2015: $12.0 billion), including purchased and zero-cost collars of $3.7 billion (at December 31, 2015: $5.6 billion) and average rate forwards of $15.4 billion (at December 31, 2015: $6.4 billion).  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.  As of June 30, 2016, the total net notional value of the purchased and zero-cost collars was $1.9 billion (at December 31, 2015: $2.9 billion).

The following tables summarize the notional amounts and respective fair values of Corning’s derivative financial instruments on a gross basis for June 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
	June 30, 2016	Dec. 31, 2015		June 30, 2016	Dec. 31, 2015		June 30, 2016	Dec. 31, 2015
Derivatives designated as hedging instruments
Foreign exchange contracts  (1)	$     584	$    782	Other current assets	$   2	$     5	Other accrued liabilities	$    (55)	$  (10)
			Other assets		1	Other liabilities	(25)	(23)
Interest rate contracts	550	550	Other assets	10		Other liabilities		(4)
Derivatives not designated as hedging instruments
Foreign exchange contracts, other	717	1,095	Other current assets	3	6	Other accrued liabilities	(53)	(12)
Translated earnings contracts	19,128	11,972	Other current assets	98	511	Other accrued liabilities	(103)	(33)
			Other assets	67	472	Other liabilities	(1,375)	(61)
Total derivatives	$20,979	$14,399		$180	$995		$(1,611)	$(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 June 30, 2016 and 2015 (in millions):

	Effect of designated derivative instruments on the consolidated financial statements for the three months ended June 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			$	6	Sales			$	5
					Cost of sales	$	(9)		4
Foreign exchange contracts	$	(35)		7
Total cash flow hedges	$	(35)	$	13		$	(9)	$	9

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

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

	Effect of  derivative instruments on the consolidated financial statements for the six months ended June 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	$	1	$	10
					Cost of sales		(14)		6
Foreign exchange contracts	$	(63)		34
Total cash flow hedges	$	(63)	$	27		$	(13)	$	16

(1) The amount of hedge ineffectiveness at June 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 June 30,				Six months ended June 30,
		2016		2015		2016		2015
Foreign exchange contracts – balance sheet	Foreign currency hedge gain (loss), net	$	(13)	$	2	$	(28)	$	13
Foreign exchange contracts – loans	Foreign currency hedge gain (loss), net		(22)				(44)		2
Foreign currency hedges related to translated earnings	Foreign currency hedge gain (loss), net		(1,201)		162		(2,058)		191
Total undesignated		$	(1,236)	$	164	$	(2,130)	$	206

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Note 14 - Fair Value Measurements

6 Months Ended

Jun. 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
	June 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)	$	103		$	103
Non-current assets:
Other assets  (1)(2)	$	344		$	107	$	237
Current liabilities:
Other accrued liabilities  (1)	$	211		$	211
Non-current liabilities:
Other liabilities  (1)(2)	$	1,408		$	1,400	$	8

(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)(2)	$	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 June 30, 2016 and December 31, 2015, the fair value of the potential receipt of the contingent consideration in 2018 was $237 million and $246 million, respectively.

As a result of the acquisitions of the fiber-optics business of Samsung Electronics Co., Ltd., the Company has contingent consideration that was measured using unobservable (Level 3) inputs.  As of June 30, 2016, the fair value of the contingent consideration payable is $8 million.

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

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Note 15 - Shareholders' Equity

6 Months Ended

Jun. 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 June 30, 2016, the Preferred Stock has not been converted, and none of the anti-dilution provisions have been triggered.

Share Repurchases

On July 15, 2015, Corning’s Board of Directors approved a $2 billion share repurchase program (the “July 2015 Repurchase Program”) and on October 26, 2015 the Board of Directors authorized an additional $4 billion share repurchase program (together with the July 2015 Repurchase Program, the “2015 Repurchase Program”).  The 2015 Repurchase Program permits Corning to effect repurchases from time to time through a combination of open market repurchases, privately negotiated transactions, accelerated repurchase agreements and/or other arrangements.

On October 28, 2015, Corning entered into an accelerated share repurchase agreement (“ASR”) with Morgan Stanley & Co. LLC (“Morgan Stanley”) to repurchase $1.25 billion of Corning’s common stock (the “2015 ASR agreement”).  The 2015 ASR agreement was executed under the July 2015 Repurchase Program.  On January 19, 2016, the 2015 ASR agreement was completed and Corning received an additional 15.9 million shares on January 22, 2016 to settle the 2015 ASR agreement.

In addition to the shares repurchased through the 2015 ASR agreement, during the three and six months ended June 30, 2016, we repurchased 40.9 million and 80.7 million shares of common stock for $810 million and $1,561 million, respectively, as part of the 2015 Repurchase Program.

Accumulated Other Comprehensive Income

In the three and six months ended June 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 June 30,				Six months ended June 30,
	2016		2015		2016		2015
Beginning balance	$	(743)	$	(837)	$	(1,171)	$	(581)
Other comprehensive income (loss)		240		(62)		625		(236)
Equity method affiliates		(44)		22		(1)		(60)
Net current-period other comprehensive income		196		(40)		624		(296)
Ending balance	$	(547)	$	(877)	$	(547)	$	(877)

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.

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

(1):

	Three months ended June 30,				Six months ended June 30,
	2016		2015		2016		2015
Beginning balance	$	(588)	$	(708)	$	(588)	$	(709)
Other comprehensive income (loss) before reclassifications  (2)		(29)		(9)		(35)
Amounts reclassified from accumulated other comprehensive income  (2)		29		8		36		10
Equity method affiliates  (3)		265		6		264		(4)
Net current-period other comprehensive income		265		5		265		6
Ending balance	$	(323)	$	(703)	$	(323)	$	(703)

(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 and six months ended June 30, 2016, amounts are net of total tax expense of $(19) million.  For the three and six months ended June 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

6 Months Ended

Jun. 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 $14 million and $15 million for the three months ended June 30, 2016 and 2015, respectively, and approximately $23 million and $25 million for the six months ended June 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 six months ended June 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	1,624	19.93
Exercised	(2,087)	13.13
Forfeited and Expired	(4,256)	26.08
Options Outstanding as of June 30, 2016	38,019	19.02	4.06	$110,178
Options Expected to Vest as of June 30, 2016	37,968	19.02	4.05	110,158
Options Exercisable as of June 30, 2016	33,177	18.78	3.36	108,177

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 June 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 June 30, 2016, there was approximately $9 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 1.9 years.  Compensation cost related to stock options was approximately $5 million and $7 million for the three months ended June 30, 2016 and 2015, respectively, and approximately $8 million and $11 million for the six months ended June 30, 2016 and 2015, respectively.

Proceeds received from the exercise of stock options were $27 million and $98 million for the six months ended June 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 six months ended June 30, 2016 and 2015 was approximately $15 million and $46 million, respectively.  The income tax benefit realized from share-based compensation was not significant for the three and six months ended June 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 June 30,		Six months ended June 30,
	2016	2015	2016			2015
Expected volatility	40.2%	44.5%	40.2	-	43.1%	44.5	-	44.9%
Weighted-average volatility	40.2%	44.5%	40.2	-	43.1%	44.5	-	44.9%
Expected dividends	2.89%	2.24%	2.89	-	2.94%	1.92	-	2.24%
Risk-free rate	1.6%	1.9%	1.5	-	1.6%	1.9	-	1.9%
Average risk-free rate	1.6%	1.9%	1.5	-	1.6%	1.9	-	1.9%
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 six months ended June 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	1,279		20.44
Vested	(1,635)		14.25
Forfeited	(49)		21.00
Non-vested shares and share units at June 30, 2016	4,837	$	19.79

As of June 30, 2016, there was approximately $37 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 $9 million and $8 million for the three months ended June 30, 2016 and 2015, respectively, and approximately $15 million and $14 million for the six months ended June 30, 2016 and 2015, respectively.

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Note 17 - Reportable Segments

6 Months Ended

Jun. 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   June 30, 2016
	Net sales	$	801	$	782	$	259	$	266	$	215	$	37	$	2,360
	Depreciation  (1)	$	149	$	43	$	33	$	27	$	13	$	11	$	276
	Amortization of purchased intangibles			$	8					$	5	$	2	$	15
	Research, development and engineering expenses  (2)	$	17	$	36	$	26	$	34	$	6	$	45	$	164
	Restructuring, impairment and other charges	$	2					$	12	$	1	$	1	$	16
	Equity in earnings of affiliated companies											$	(8)	$	(8)
	Income tax (provision) benefit	$	(86)	$	(39)	$	(19)	$	(19)	$	(8)	$	23	$	(148)
	Net income (loss)  (3)	$	204	$	77	$	37	$	38	$	17	$	(55)	$	318

		Display Technologies		Optical Communications		Environmental Technologies		Specialty Materials		Life Sciences		All Other		Total
Three months ended   June 30, 2015
	Net sales	$	789	$	800	$	260	$	272	$	211	$	11	$	2,343
	Depreciation  (1)	$	152	$	43	$	32	$	27	$	15	$	11	$	280
	Amortization of purchased intangibles			$	11					$	5			$	16
	Research, development and engineering expenses  (2)	$	26	$	35	$	23	$	29	$	6	$	44	$	163
	Restructuring, impairment and other charges							$	3					$	3
	Equity in earnings of affiliated companies	$	(3)									$	6	$	3
	Income tax (provision) benefit	$	(136)	$	(37)	$	(22)	$	(22)	$	(9)	$	21	$	(205)
	Net income (loss)  (3)	$	303	$	77	$	46	$	44	$	18	$	(45)	$	443

		Display Technologies		Optical Communications		Environmental Technologies		Specialty Materials		Life Sciences		All Other		Total
Six months ended   June 30, 2016
	Net sales	$	1,506	$	1,391	$	523	$	493	$	419	$	75	$	4,407
	Depreciation  (1)	$	300	$	84	$	65	$	55	$	28	$	22	$	554
	Amortization of purchased intangibles			$	15					$	10	$	4	$	29
	Research, development and engineering expenses  (2)	$	35	$	73	$	51	$	65	$	12	$	92	$	328
	Restructuring, impairment and other charges	$	16	$	6	$	5	$	24	$	5	$	61	$	117
	Equity in earnings of affiliated companies											$	(5)	$	(5)
	Income tax (provision) benefit	$	(179)	$	(50)	$	(35)	$	(31)	$	(14)	$	66	$	(243)
	Net income (loss)  (3)	$	413	$	94	$	71	$	64	$	29	$	(140)	$	531

		Display Technologies		Optical Communications		Environmental Technologies		Specialty Materials		Life Sciences		All Other		Total
Six months ended   June 30, 2015
	Net sales	$	1,597	$	1,497	$	542	$	544	$	408	$	20	$	4,608
	Depreciation  (1)	$	308	$	81	$	61	$	53	$	30	$	20	$	553
	Amortization of purchased intangibles			$	17					$	10			$	27
	Research, development and engineering expenses  (2)	$	50	$	68	$	46	$	60	$	11	$	89	$	324
	Restructuring, impairment and other charges			$	(1)			$	3					$	2
	Equity in earnings of affiliated companies	$	(5)									$	8	$	3
	Income tax (provision) benefit	$	(268)	$	(66)	$	(45)	$	(43)	$	(17)	$	44	$	(395)
	Net income (loss)  (3)	$	597	$	134	$	94	$	82	$	34	$	(93)	$	848

(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 June 30,				Six months ended June 30,
	2016		2015		2016		2015
Net income of reportable segments	$	373	$	488	$	671	$	941
Net loss of All Other		(55)		(45)		(140)		(93)
Unallocated amounts:
Net financing costs  (1)		(29)		(25)		(58)		(49)
Stock-based compensation expense		(14)		(15)		(23)		(25)
Exploratory research		(28)		(28)		(55)		(54)
Corporate contributions		(16)		(12)		(23)		(24)
Gain on realignment of equity investment		2,676				2,676
Equity in earnings of affiliated companies, net of impairments  (2)		48		59		104		153
Unrealized loss on foreign currency hedges related to translated earnings		(1,253)		(10)		(2,203)		(130)
Resolution of Department of Justice investigation		(98)				(98)
Income tax benefit		653		95		1,054		197
Other corporate items		(50)		(11)		(66)		(13)
Net income	$	2,207	$	496	$	1,839	$	903

(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.

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Significant Accounting Policies (Policies)

6 Months Ended

Jun. 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 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.

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

6 Months Ended

Jun. 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 June 30, 2016
Restructuring:
Employee related costs	$	3	$	15	$	(1)	$	(6)	$	11
Other charges				1				(1)
Total restructuring activity	$	3	$	16	$	(1)	$	(7)	$	11
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)

6 Months Ended

Jun. 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 June 30, 2016	$	-	$	290	$	150	$	440

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Note 5 - Income Taxes (Tables)

6 Months Ended

Jun. 30, 2016

Notes Tables

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

	Three months ended June 30,				Six months ended June 30,
	2016		2015		2016		2015
Benefit (provision) for income taxes	$	504	$	(110)	$	808	$	(196)
Effective tax rate		(29.6%)		18.2%		(78.4%)		17.8%

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Note 6 - Earnings Per Common Share (Tables)

6 Months Ended

Jun. 30, 2016

Notes Tables

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

	Three months ended June 30,				Six months ended June 30,
	2016		2015		2016		2015
Net income attributable to Corning Incorporated	$	2,207	$	496	$	1,839	$	903
Less:  Series A convertible preferred stock dividend		24		24		49		49
Net income available to common stockholders - basic		2,183		472		1,790		854
Plus:  Series A convertible preferred stock dividend		24		24		49		49
Net income available to common stockholders - diluted	$	2,207	$	496	$	1,839	$	903
Weighted-average common shares outstanding - basic		1,059		1,246		1,081		1,257
Effect of dilutive securities:
Stock options and other dilutive securities		8		10		8		11
Series A convertible preferred stock		115		115		115		115
Weighted-average common shares outstanding - diluted		1,182		1,371		1,204		1,383
Basic earnings per common share	$	2.06	$	0.38	$	1.66	$	0.68
Diluted earnings per common share	$	1.87	$	0.36	$	1.53	$	0.65
Antidilutive potential shares excluded from diluted earnings per common share:
Employee stock options and awards		20		20		21		17
Total		20		20		21		17

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Note 7 - Available-for-Sale Investments (Tables)

6 Months Ended

Jun. 30, 2016

Notes Tables

Schedule of Available-for-sale Securities Reconciliation [Table Text Block]

	Amortized cost				Fair value
	June 30, 2016		December 31, 2015		June 30, 2016		December 31, 2015
Bonds, notes and other securities:
U.S. government and agencies			$	100			$	100
Total short-term investments			$	100			$	100
Asset-backed securities  (1)	$	34	$	37	$	30	$	33
Total long-term investments	$	34	$	37	$	30	$	33

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

6 Months Ended

Jun. 30, 2016

Notes Tables

Schedule of Inventory, Current [Table Text Block]

	June 30, 2016		December 31, 2015
Finished goods	$	633	$	633
Work in process		293		264
Raw materials and accessories		274		200
Supplies and packing materials		301		288
Total inventories, net of inventory reserves	$	1,501	$	1,385

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Note 9 - Investments (Tables)

6 Months Ended

Jun. 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			June 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%	$	279		422
					279		1,905
Other investments					67		70
Subtotal Investment Assets				$	346	$	1,975
Affiliated companies accounted for by the equity method
HSG  (2)(3)		50%		$	361
Subtotal Investment Liabilities				$	361

Schedule of Affiliate Result of Operations [Table Text Block]

	Three months ended June 30,				Six months ended June 30,
	2016		2015		2016		2015
Statement of Operations:
Net sales	$	898	$	1,424	$	2,215	$	2,788
Gross profit  (1)	$	238	$	364	$	588	$	722
Net income attributable to Dow Corning  (2)	$	52	$	113	$	163	$	298
Corning’s equity in earnings of Dow Corning	$	26	$	57	$	82	$	149

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Note 10 - Goodwill and Other Intangible Assets (Tables)

6 Months Ended

Jun. 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
Foreign currency translation adjustment		8		1				4		1		14
Balance at June 30, 2016	$	622	$	129	$	150	$	566	$	102	$	1,569

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

	June 30, 2016						December 31, 2015
	Gross		Accumulated amortization		Net		Gross		Accumulated amortization		Net
Amortized intangible assets:
Patents, trademarks, and trade names	$	367	$	171	$	196	$	350	$	162	$	188
Customer lists and other		733		125		608		621		103		518
Total	$	1,100	$	296	$	804	$	971	$	265	$	706

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Note 11 - Employee Retirement Plans (Tables)

6 Months Ended

Jun. 30, 2016

Notes Tables

Schedule of Net Benefit Costs [Table Text Block]

	Pension benefits								Postretirement benefits
	Three months ended June 30,				Six months ended June 30,				Three months ended June 30,				Six months ended June 30,
	2016		2015		2016		2015		2016		2015		2016		2015
Service cost	$	21	$	22	$	43	$	45	$	2	$	4	$	4	$	7
Interest cost		31		37		62		73		6		8		13		16
Expected return on plan assets		(41)		(44)		(83)		(89)
Amortization of net loss												1				2
Amortization of prior service cost (credit)		2		1		3		3		(1)		(2)		(2)		(3)
Recognition of actuarial loss		28		8		35		8
Total pension and postretirement benefit expense	$	41	$	24	$	60	$	40	$	7	$	11	$	15	$	22

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Note 12 - Other Liabilities (Tables)

6 Months Ended

Jun. 30, 2016

Notes Tables

Other Liabilities [Table Text Block]

	June 30, 2016		December 31, 2015
Current liabilities:
Wages and employee benefits	$	386	$	491
Income taxes		82		53
Asbestos and other litigation reserves		76		238
Derivative instruments		211		55
Other current liabilities		476		471
Other accrued liabilities	$	1,231	$	1,308
Non-current liabilities:
Asbestos and other litigation reserves	$	394	$	440
Derivative instruments		1,400		88
Investment in Hemlock Semiconductor Group  (1)		361
Defined benefit pension plan liabilities		740		672
Other non-current liabilities		1,010		1,042
Other liabilities	$	3,905	$	2,242

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Note 13 - Hedging Activities (Tables)

6 Months Ended

Jun. 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 June 30,				Six months ended June 30,
		2016		2015		2016		2015
Foreign exchange contracts – balance sheet	Foreign currency hedge gain (loss), net	$	(13)	$	2	$	(28)	$	13
Foreign exchange contracts – loans	Foreign currency hedge gain (loss), net		(22)				(44)		2
Foreign currency hedges related to translated earnings	Foreign currency hedge gain (loss), net		(1,201)		162		(2,058)		191
Total undesignated		$	(1,236)	$	164	$	(2,130)	$	206

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 June 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			$	6	Sales			$	5
					Cost of sales	$	(9)		4
Foreign exchange contracts	$	(35)		7
Total cash flow hedges	$	(35)	$	13		$	(9)	$	9

	Effect of  derivative instruments on the consolidated financial statements for the six months ended June 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	$	1	$	10
					Cost of sales		(14)		6
Foreign exchange contracts	$	(63)		34
Total cash flow hedges	$	(63)	$	27		$	(13)	$	16

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
	June 30, 2016	Dec. 31, 2015		June 30, 2016	Dec. 31, 2015		June 30, 2016	Dec. 31, 2015
Derivatives designated as hedging instruments
Foreign exchange contracts  (1)	$     584	$    782	Other current assets	$   2	$     5	Other accrued liabilities	$    (55)	$  (10)
			Other assets		1	Other liabilities	(25)	(23)
Interest rate contracts	550	550	Other assets	10		Other liabilities		(4)
Derivatives not designated as hedging instruments
Foreign exchange contracts, other	717	1,095	Other current assets	3	6	Other accrued liabilities	(53)	(12)
Translated earnings contracts	19,128	11,972	Other current assets	98	511	Other accrued liabilities	(103)	(33)
			Other assets	67	472	Other liabilities	(1,375)	(61)
Total derivatives	$20,979	$14,399		$180	$995		$(1,611)	$(143)

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Note 14 - Fair Value Measurements (Tables)

6 Months Ended

Jun. 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
	June 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)	$	103		$	103
Non-current assets:
Other assets  (1)(2)	$	344		$	107	$	237
Current liabilities:
Other accrued liabilities  (1)	$	211		$	211
Non-current liabilities:
Other liabilities  (1)(2)	$	1,408		$	1,400	$	8

			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)(2)	$	98			$	88	$	10

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Note 15 - Shareholders' Equity (Tables)

6 Months Ended

Jun. 30, 2016

Notes Tables

Comprehensive Income (Loss) [Table Text Block]

	Three months ended June 30,				Six months ended June 30,
	2016		2015		2016		2015
Beginning balance	$	(743)	$	(837)	$	(1,171)	$	(581)
Other comprehensive income (loss)		240		(62)		625		(236)
Equity method affiliates		(44)		22		(1)		(60)
Net current-period other comprehensive income		196		(40)		624		(296)
Ending balance	$	(547)	$	(877)	$	(547)	$	(877)

	Three months ended June 30,				Six months ended June 30,
	2016		2015		2016		2015
Beginning balance	$	(588)	$	(708)	$	(588)	$	(709)
Other comprehensive income (loss) before reclassifications  (2)		(29)		(9)		(35)
Amounts reclassified from accumulated other comprehensive income  (2)		29		8		36		10
Equity method affiliates  (3)		265		6		264		(4)
Net current-period other comprehensive income		265		5		265		6
Ending balance	$	(323)	$	(703)	$	(323)	$	(703)

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Note 16 - Share-based Compensation (Tables)

6 Months Ended

Jun. 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	1,624	19.93
Exercised	(2,087)	13.13
Forfeited and Expired	(4,256)	26.08
Options Outstanding as of June 30, 2016	38,019	19.02	4.06	$110,178
Options Expected to Vest as of June 30, 2016	37,968	19.02	4.05	110,158
Options Exercisable as of June 30, 2016	33,177	18.78	3.36	108,177

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

	Three months ended June 30,		Six months ended June 30,
	2016	2015	2016			2015
Expected volatility	40.2%	44.5%	40.2	-	43.1%	44.5	-	44.9%
Weighted-average volatility	40.2%	44.5%	40.2	-	43.1%	44.5	-	44.9%
Expected dividends	2.89%	2.24%	2.89	-	2.94%	1.92	-	2.24%
Risk-free rate	1.6%	1.9%	1.5	-	1.6%	1.9	-	1.9%
Average risk-free rate	1.6%	1.9%	1.5	-	1.6%	1.9	-	1.9%
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	1,279		20.44
Vested	(1,635)		14.25
Forfeited	(49)		21.00
Non-vested shares and share units at June 30, 2016	4,837	$	19.79

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Note 17 - Reportable Segments (Tables)

6 Months Ended

Jun. 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   June 30, 2016
	Net sales	$	801	$	782	$	259	$	266	$	215	$	37	$	2,360
	Depreciation  (1)	$	149	$	43	$	33	$	27	$	13	$	11	$	276
	Amortization of purchased intangibles			$	8					$	5	$	2	$	15
	Research, development and engineering expenses  (2)	$	17	$	36	$	26	$	34	$	6	$	45	$	164
	Restructuring, impairment and other charges	$	2					$	12	$	1	$	1	$	16
	Equity in earnings of affiliated companies											$	(8)	$	(8)
	Income tax (provision) benefit	$	(86)	$	(39)	$	(19)	$	(19)	$	(8)	$	23	$	(148)
	Net income (loss)  (3)	$	204	$	77	$	37	$	38	$	17	$	(55)	$	318

		Display Technologies		Optical Communications		Environmental Technologies		Specialty Materials		Life Sciences		All Other		Total
Three months ended   June 30, 2015
	Net sales	$	789	$	800	$	260	$	272	$	211	$	11	$	2,343
	Depreciation  (1)	$	152	$	43	$	32	$	27	$	15	$	11	$	280
	Amortization of purchased intangibles			$	11					$	5			$	16
	Research, development and engineering expenses  (2)	$	26	$	35	$	23	$	29	$	6	$	44	$	163
	Restructuring, impairment and other charges							$	3					$	3
	Equity in earnings of affiliated companies	$	(3)									$	6	$	3
	Income tax (provision) benefit	$	(136)	$	(37)	$	(22)	$	(22)	$	(9)	$	21	$	(205)
	Net income (loss)  (3)	$	303	$	77	$	46	$	44	$	18	$	(45)	$	443

		Display Technologies		Optical Communications		Environmental Technologies		Specialty Materials		Life Sciences		All Other		Total
Six months ended   June 30, 2016
	Net sales	$	1,506	$	1,391	$	523	$	493	$	419	$	75	$	4,407
	Depreciation  (1)	$	300	$	84	$	65	$	55	$	28	$	22	$	554
	Amortization of purchased intangibles			$	15					$	10	$	4	$	29
	Research, development and engineering expenses  (2)	$	35	$	73	$	51	$	65	$	12	$	92	$	328
	Restructuring, impairment and other charges	$	16	$	6	$	5	$	24	$	5	$	61	$	117
	Equity in earnings of affiliated companies											$	(5)	$	(5)
	Income tax (provision) benefit	$	(179)	$	(50)	$	(35)	$	(31)	$	(14)	$	66	$	(243)
	Net income (loss)  (3)	$	413	$	94	$	71	$	64	$	29	$	(140)	$	531

		Display Technologies		Optical Communications		Environmental Technologies		Specialty Materials		Life Sciences		All Other		Total
Six months ended   June 30, 2015
	Net sales	$	1,597	$	1,497	$	542	$	544	$	408	$	20	$	4,608
	Depreciation  (1)	$	308	$	81	$	61	$	53	$	30	$	20	$	553
	Amortization of purchased intangibles			$	17					$	10			$	27
	Research, development and engineering expenses  (2)	$	50	$	68	$	46	$	60	$	11	$	89	$	324
	Restructuring, impairment and other charges			$	(1)			$	3					$	2
	Equity in earnings of affiliated companies	$	(5)									$	8	$	3
	Income tax (provision) benefit	$	(268)	$	(66)	$	(45)	$	(43)	$	(17)	$	44	$	(395)
	Net income (loss)  (3)	$	597	$	134	$	94	$	82	$	34	$	(93)	$	848

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

	Three months ended June 30,				Six months ended June 30,
	2016		2015		2016		2015
Net income of reportable segments	$	373	$	488	$	671	$	941
Net loss of All Other		(55)		(45)		(140)		(93)
Unallocated amounts:
Net financing costs  (1)		(29)		(25)		(58)		(49)
Stock-based compensation expense		(14)		(15)		(23)		(25)
Exploratory research		(28)		(28)		(55)		(54)
Corporate contributions		(16)		(12)		(23)		(24)
Gain on realignment of equity investment		2,676				2,676
Equity in earnings of affiliated companies, net of impairments  (2)		48		59		104		153
Unrealized loss on foreign currency hedges related to translated earnings		(1,253)		(10)		(2,203)		(130)
Resolution of Department of Justice investigation		(98)				(98)
Income tax benefit		653		95		1,054		197
Other corporate items		(50)		(11)		(66)		(13)
Net income	$	2,207	$	496	$	1,839	$	903

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Note 2 - Restructuring, Impairment and Other Charges (Details Textual) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Restructuring, Settlement and Impairment Provisions	$ (2)		$ 78
Expected Cash Expenditures for Restructuring Costs			$ 15

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Note 2 - Restructuring, Impairment and Other Charges - Restructuring, Impairment and Other Charges (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Employee Severance [Member]
Reserve			$ 3
Net Charges/Reversals			15
Non-cash adjustments			(1)
Restructuring payments			(6)
Reserve	$ 11		11
Other Restructuring [Member]
Net Charges/Reversals			1
Restructuring payments			(1)
Reserve			3
Net Charges/Reversals			16
Non-cash adjustments			(1)
Restructuring payments			(7)	$ (23)
Reserve	11		11
Disposal of long-lived assets			62
Restructuring, impairment and other charges	$ (2)		$ 78

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

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Note 3 - Commitments, Contingencies, and Guarantees (Details Textual) $ in Millions	1 Months Ended	6 Months Ended
	Jun. 09, 2016 USD ($)	Jun. 30, 2016 USD ($)	Apr. 27, 2016 USD ($)	Dec. 31, 2015 USD ($)	Apr. 16, 2000
Pittsburgh Corning Corporation PCC [Member] | PPG Industries, Inc. [Member]
Equity Method Investment, Ownership Percentage		50.00%
Pittsburgh Corning Corporation PCC [Member] | Asbestos Litigation [Member]
Loss Contingency, Pending Claims, Number					11,800
Pittsburgh Corning Corporation PCC [Member]
Equity Method Investment, Ownership Percentage		50.00%
PCC and PCE [Member]
Gain (Loss) on Investments	$ 56
Asbestos Litigation [Member] | Amended Pittsburgh Corning Corporation Plan [Member] | First Payment [Member]
Loss Contingency Required Payments Per Reorganization Plan			$ 70
Asbestos Litigation [Member] | Amended Pittsburgh Corning Corporation Plan [Member] | First Subsequent Anniversary [Member]
Loss Contingency Required Payments Per Reorganization Plan			35
Asbestos Litigation [Member] | Amended Pittsburgh Corning Corporation Plan [Member] | Second Subsequent Anniversary [Member]
Loss Contingency Required Payments Per Reorganization Plan			50
Asbestos Litigation [Member] | Amended Pittsburgh Corning Corporation Plan [Member] | Third Subsequent Anniversary [Member]
Loss Contingency Required Payments Per Reorganization Plan			35
Asbestos Litigation [Member] | Amended Pittsburgh Corning Corporation Plan [Member] | Fourth Subsequent Anniversary [Member]
Loss Contingency Required Payments Per Reorganization Plan			50
Asbestos Litigation [Member] | Amended Pittsburgh Corning Corporation Plan [Member] | Fifth Subsequent Anniversary [Member]
Loss Contingency Required Payments Per Reorganization Plan			50
Asbestos Litigation [Member] | Amended Pittsburgh Corning Corporation Plan [Member]
Loss Contingency Required Payments Per Reorganization Plan			$ 290
Asbestos Litigation [Member] | Amended PCC Plan and Non-PCC Asbestos Claims [Member]
Loss Contingency Accrual, Period Increase (Decrease)		$ (238)
Loss Contingency, Estimate of Possible Loss		440		$ 678
Asbestos Litigation [Member] | PCC Asbestos Claims [Member]
Loss Contingency, Estimate of Possible Loss		290
Loss Contingency, Accrual, Noncurrent		220
Asbestos Litigation [Member] | Non-PCC Asbestos Litigation [Member]
Loss Contingency, Estimate of Possible Loss		150
Loss Contingency, Accrual, Noncurrent		150
Loss Contingency, Accrual, Current		70
Asbestos Litigation [Member]
Loss Contingency, Accrual, Noncurrent		$ 370
Non-PCC Asbestos Litigation [Member]
Number of Other Cases Currently Involved Alleging Injuries From Asbestos and Similar Amounts of Monetary Damages Per Case		9,700
Number of Claims in Other Cases Currently Involved Alleging Injuries From Asbestos and Similar Amounts of Monetary Damages Per Case		37,300
Insurance Recoveries		$ 19
Loss Contingency Accrual, Period Increase (Decrease)		$ 150
Undiscounted Projection of Claims and Related Legal Fees, Period		20 years
Contingent Guarantees [Member]
Guarantor Obligations, Maximum Exposure, Undiscounted		$ 190		184
Environmental Cleanup and Related Litigation [Member]
Accrual for Environmental Loss Contingencies		47		37
Loss Contingency, Accrual, Noncurrent		394		440
Loss Contingency, Accrual, Current		76		238
Recorded Unconditional Purchase Obligation		$ 220		$ 220
Number of Hazardous Waste Sites		17

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Note 3 - Commitments, Contingencies, and Guarantees - Amount of the Asbestos Litigation Liability (Details) $ in Millions	6 Months Ended
	Jun. 30, 2016 USD ($)
Amended PCC Plan [Member] | Equity Interests [Member]
Fair Value of Asbestos Litigation Liability	$ 238
Less: Contribution of PCC & PCE Equity Interests - Carrying Value	182
Gain on Contribution of Equity Interests	56
Asbestos Litigation Liability
Amended PCC Plan [Member] | Fixed Series of Payments [Member]
Fair Value of Asbestos Litigation Liability	290
Less: Contribution of PCC & PCE Equity Interests - Carrying Value
Gain on Contribution of Equity Interests
Asbestos Litigation Liability	290
Non-PCC Asbestos Litigation [Member]
Fair Value of Asbestos Litigation Liability	150
Less: Contribution of PCC & PCE Equity Interests - Carrying Value
Gain on Contribution of Equity Interests
Asbestos Litigation Liability	150
Amended PCC Plan and Non-PCC Asbestos Claims [Member]
Fair Value of Asbestos Litigation Liability	678
Less: Contribution of PCC & PCE Equity Interests - Carrying Value	182
Gain on Contribution of Equity Interests	56
Asbestos Litigation Liability	$ 440

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Note 4 - Debt (Details Textual) - USD ($) $ in Millions	Jul. 20, 2016	Jun. 30, 2016	Dec. 31, 2015	Jun. 30, 2015
Amended Credit Facility [Member]
Line of Credit Facility, Maximum Borrowing Capacity		$ 2,000
1.50% Due May 8, 2018 [Member] | Senior Notes [Member]
Debt Instrument, Face Amount				$ 375
Debt Instrument, Interest Rate, Stated Percentage				1.50%
2.90% Due May 15, 2022 [Member] | Senior Notes [Member]
Debt Instrument, Face Amount				$ 375
Debt Instrument, Interest Rate, Stated Percentage				2.90%
Long-term Debt and Capital Lease Obligations		3,918	$ 3,890
Debt Instrument, Fair Value Disclosure		4,300	$ 4,100
Increase (Decrease) to Commercial Paper Maximum Capacity	$ 1,000
Commercial Paper, Maximum Borrowing Capacity	$ 2,000
Commercial Paper		$ 252

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Note 5 - Income Taxes (Details Textual)	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 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 ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Benefit (provision) for income taxes (Note 5)	$ 504	$ (110)	$ 808	$ (196)
Effective tax rate	(29.60%)	18.20%	(78.40%)	17.80%

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Note 6 - Earnings Per Common Share - Computation of Basic and Diluted Earnings per Common Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions		3 Months Ended		6 Months Ended
		Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Convertible Preferred Stock, Series A [Member]
Series A convertible preferred stock dividend	[1]	$ 24	$ 24	$ 49	$ 49
Effect of dilutive securities:
Effect of dilutive securities (in shares)		115	115	115	115
Stock Options and Other Dilutive Securities [Member]
Effect of dilutive securities:
Effect of dilutive securities (in shares)		8	10	8	11
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)		20	20	21	17
Net income		$ 2,207	$ 496	$ 1,839	$ 903
Net income available to common stockholders - basic		2,183	472	1,790	854
Net income available to common stockholders - diluted		$ 2,207	$ 496	$ 1,839	$ 903
Weighted-average common shares outstanding - basic (in shares)		1,059	1,246	1,081	1,257
Weighted-average common shares outstanding - diluted (in shares)		1,182	1,371	1,204	1,383
Basic earnings per common share (in dollars per share)		$ 2.06	$ 0.38	$ 1.66	$ 0.68
Diluted earnings per common share (in dollars per share)		$ 1.87	$ 0.36	$ 1.53	$ 0.65
Antidilutive potential shares excluded from diluted earnings per common share (in shares)		20	20	21	17

[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 ($) $ in Millions	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Asset-backed Securities [Member]
Available-for-Sale Securities, Maturity Term	10 years
Proceeds from Sale of Short-term Investments	$ 121	$ 825

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Note 7 - Available-for-Sale Investments - Summary of Fair Value of Available-for-Sale Investments (Details) - USD ($) $ in Millions		Jun. 30, 2016	Dec. 31, 2015
US Government Agencies Debt Securities [Member]
Amortized cost			$ 100
Fair value			100
Total Short-Term Investments [Member]
Amortized cost			100
Fair value			100
Asset-backed Securities [Member]
Amortized cost	[1]	34	37
Fair value	[1]	30	33
Total Long-Term Investments [Member]
Amortized cost		34	37
Fair value		$ 30	$ 33

[1] Due after 10 years and are being reported at their final maturity dates.

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Note 8 - Inventories, Net of Inventory Reserves - Inventories, Net (Details) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Finished goods	$ 633	$ 633
Work in process	293	264
Raw materials and accessories	274	200
Supplies and packing materials	301	288
Total inventories, net of inventory reserves	$ 1,501	$ 1,385

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Note 9 - Investments (Details Textual) - USD ($) $ in Millions			1 Months Ended	3 Months Ended		6 Months Ended
		May 31, 2016	Jun. 30, 2016	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 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]							$ 1,483
HSG [Member]
Income (Loss) from Equity Method Investments			$ 22
HSC Operating Partnernship [Member] | HSG [Member]
Equity Method Investment, Ownership Percentage			80.50%	80.50%		80.50%
Reclassification out of Accumulated Other Comprehensive Income [Member]
Defined Benefit Plan, Actuarial Gain (Loss)						$ (260)
Foreign Currency Transaction Gain, before Tax						45
Dow Corning Corporation [Member]
Income (Loss) from Equity Method Investments				$ 26	$ 57	82	$ 149
Gain (Loss) on Contract Termination							178
Equity Method Investments		$ 4,800	$ 279	279		279		$ 1,905
Removal of Carrying Value of Equity Method Investment		$ 383				383
Release of Deferred Tax Liabilities						105
Realignment of Equity Investment, Gain (Loss)				2,676		2,676
Income (Loss) from Equity Method Investments				41	62	100	156
Research and Development Expense				$ 43	$ 63	$ 100	$ 125

[1] Amounts reflect Corning’s direct ownership interests in the respective affiliated companies at June 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 ($) $ in Millions		3 Months Ended		6 Months Ended
	May 31, 2016	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Cash				$ 4,818
Carrying Value of Dow Corning Equity Investment				(1,560)
Carrying Value of HSG Equity Investment	$ (383)			(383)
Other (1)				(199)
Gain		$ 2,676		$ 2,676

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Note 9 - Investments - Investments (Details) - USD ($) $ in Millions		6 Months Ended
		Jun. 30, 2016	May 31, 2016	Dec. 31, 2015
Parent Company [Member] | Dow Corning Corporation [Member]
Ownership interest	[1]	50.00%
Equity Method Investment, Ownership Percentage	[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%
Equity Method Investment, Ownership Percentage	[2],[3]	50.00%
Dow Corning Corporation [Member]
Ownership interest			50.00%
Equity Method Investments	[1]			$ 1,483
Investment, amount	[1]			1,483
Equity Method Investment, Ownership Percentage			50.00%
All Other [Member]
Equity Method Investments	[1]	279		422
Investment, amount	[1]	279		422
HSG [Member] | Other Liabilities [Member]
HSG (2)(3)	[2],[3]	361
Equity Method Investments		279	$ 4,800	1,905
Investment, amount		279	$ 4,800	1,905
Other investments		67		70
Investment assets		346		1,975
HSG (2)(3)		$ 361

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

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

[3] The negative carrying value of the investment in HSG was reduced by $22 million due to equity earnings recognized for the month of June, 2016.

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Note 9 - Investments - Results of Operations (Details) - USD ($) $ in Millions		3 Months Ended		6 Months Ended
		Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Dow Corning Corporation [Member]
Net sales		$ 898	$ 1,424	$ 2,215	$ 2,788
Gross profit	[1]	238	364	588	722
Net income attributable to Dow Corning	[2]	52	113	163	298
Income (Loss) from Equity Method Investments		26	57	82	149
Income (Loss) from Equity Method Investments		$ 41	$ 62	$ 100	$ 156

[1] Gross profit for the three and six months ended June 30, 2016 includes research and development costs of $43 million and $100 million (2015: $63 million and $125 million).

[2] In the first half of 2015 Dow Corning's net income included a pre-tax gain of $178 million on the settlement of long-term sales agreements.

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Note 10 - Goodwill and Other Intangible Assets (Details Textual) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Optical Communications [Member]
Business Combination, Consideration Transferred			$ 296
Optical Communications [Member]
Goodwill, Impaired, Accumulated Impairment Loss	$ 6,500		6,500		$ 6,500
Goodwill, Gross	8,100		8,100		$ 7,900
Finite-lived Intangible Assets Acquired			117
Finite Lived Intangible Assets, Foreign Currency Translation Gain (Loss)			10
Amortization of Intangible Assets	15	$ 16	29	$ 28
Finite-Lived Intangible Assets, Amortization Expense, Remainder of Fiscal Year	67		67
Finite-Lived Intangible Assets, Amortization Expense, Year Two	72		72
Finite-Lived Intangible Assets, Amortization Expense, Year Three	72		72
Finite-Lived Intangible Assets, Amortization Expense, Year Four	72		72
Finite-Lived Intangible Assets, Amortization Expense, Year Five	67		67
Finite-Lived Intangible Assets, Amortization Expense, after Year Five	$ 67		$ 67

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Note 10 - Goodwill and Other Intangible Assets - Carrying Amount of Goodwill by Segment (Details) $ in Millions	6 Months Ended
	Jun. 30, 2016 USD ($)
Optical Communications [Member]
Balance	$ 439
Acquired goodwill (1)	175	[1]
Foreign currency translation adjustment	8
Balance	622
Display Technologies [Member]
Balance	128
Acquired goodwill (1)		[1]
Foreign currency translation adjustment	1
Balance	129
Specialty Materials [Member]
Balance	150
Acquired goodwill (1)		[1]
Foreign currency translation adjustment
Balance	150
Life Sciences [Member]
Balance	562
Acquired goodwill (1)		[1]
Foreign currency translation adjustment	4
Balance	566
Other Segments [Member]
Balance	101
Acquired goodwill (1)		[1]
Foreign currency translation adjustment	1
Balance	102
Balance	1,380
Acquired goodwill (1)	175	[1]
Foreign currency translation adjustment	14
Balance	$ 1,569

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

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Note 10 - Goodwill and Other Intangible Assets - Other Intangible Assets (Details) - USD ($) $ in Millions	Jun. 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	171	162
Other intangible assets, net	196	188
Customer Lists and Other [Member]
Amortized intangible assets:
Other intangible assets, gross	733	621
Other intangible assets, accumulated amortization	125	103
Other intangible assets, net	608	518
Other intangible assets, gross	1,100	971
Other intangible assets, accumulated amortization	296	265
Other intangible assets, net	$ 804	$ 706

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Note 11 - Employee Retirement Plans - Summary of Net Periodic Benefit Cost (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Pension Plan [Member]
Service cost	$ 21	$ 22	$ 43	$ 45
Interest cost	31	37	62	73
Expected return on plan assets	(41)	(44)	(83)	(89)
Amortization of net loss
Amortization of prior service cost (credit)	2	1	3	3
Recognition of actuarial loss	28	8	35	8
Total pension and postretirement benefit expense	41	24	60	40
Other Postretirement Benefit Plan [Member]
Service cost	2	4	4	7
Interest cost	6	8	13	16
Expected return on plan assets
Amortization of net loss		1		2
Amortization of prior service cost (credit)	(1)	(2)	(2)	(3)
Recognition of actuarial loss
Total pension and postretirement benefit expense	$ 7	$ 11	$ 15	$ 22

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Note 12 - Other Liabilities (Details Textual) - Pittsburgh Corning Corporation PCC [Member]	Jun. 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 ($) $ in Millions		Jun. 30, 2016	Dec. 31, 2015
Wages and employee benefits		$ 386	$ 491
Income taxes		82	53
Loss Contingency, Accrual, Current		76	238
Derivative instruments		211	55
Other current liabilities		476	471
Other accrued liabilities		1,231	1,308
Asbestos and other litigation reserves		394	440
Derivative instruments		1,400	88
Investment in Hemlock Semiconductor Group (1)	[1]	361
Defined benefit pension plan liabilities		740	672
Other non-current liabilities		1,010	1,042
Other liabilities		$ 3,905	$ 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.

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Note 13 - Hedging Activities (Details Textual) - Not Designated as Hedging Instrument [Member] - USD ($) $ in Billions	Jun. 30, 2016	Dec. 31, 2015
Gross Notional Value, Translated Earnings Contracts [Member]
Derivative, Notional Amount	$ 19.1	$ 12.0
Gross Notional Value, Collar Options [Member]
Derivative, Notional Amount	3.7	5.6
Gross Notional Value, Foreign Exchange Forward [Member]
Derivative, Notional Amount	15.4	6.4
Net Notional Value, Collar Options [Member]
Derivative, Notional Amount	$ 1.9	$ 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		Jun. 30, 2016	Dec. 31, 2015
Foreign Exchange Contract [Member] | Designated as Hedging Instrument [Member] | Other Assets or Liabilities, Current [Member]
Notional amount	[1]	$ 584	$ 782
Asset derivatives, fair value	[1]	2	5
Liability derivatives, fair value	[1]	55	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		(25)	(23)
Foreign Exchange Contract [Member] | Not Designated as Hedging Instrument [Member] | Other Assets or Liabilities, Current [Member]
Notional amount		717	1,095
Asset derivatives, fair value		3	6
Liability derivatives, fair value		(53)	(12)
Interest Rate Swap [Member] | Designated as Hedging Instrument [Member] | Other Assets or Liabilities, Noncurrent [Member]
Notional amount		550	550
Asset derivatives, fair value		10
Liability derivatives, fair value			(4)
Translated Earnings Contracts [Member] | Not Designated as Hedging Instrument [Member] | Other Assets or Liabilities, Current [Member]
Notional amount		19,128	11,972
Asset derivatives, fair value		98	511
Liability derivatives, fair value		(103)	(33)
Translated Earnings Contracts [Member] | Not Designated as Hedging Instrument [Member] | Other Assets or Liabilities, Noncurrent [Member]
Notional amount
Asset derivatives, fair value		67	472
Liability derivatives, fair value		(1,375)	(61)
Notional amount		20,979	14,399
Asset derivatives, fair value		180	995
Liability derivatives, fair value		$ 1,611	$ 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		6 Months Ended
		Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Interest Rate Hedges [Member] | Cash Flow Hedging [Member] | Sales [Member]
Gain/(loss) recognized in other comprehensive income (OCI)			$ 6		$ (7)
Gain reclassified from accumulated OCI into income (effective)	[1]		5	1	10
Interest Rate Hedges [Member] | Cash Flow Hedging [Member] | Cost of Sales [Member]
Gain reclassified from accumulated OCI into income (effective)	[1]	(9)	4	(14)	6
Foreign Exchange Contract [Member] | Cash Flow Hedging [Member] | Cost of Sales [Member]
Gain/(loss) recognized in other comprehensive income (OCI)		(35)	7	(63)	34
Gain reclassified from accumulated OCI into income (effective)	[1]
Cash Flow Hedging [Member]
Gain/(loss) recognized in other comprehensive income (OCI)		(35)	13	(63)	27
Gain reclassified from accumulated OCI into income (effective)	[1]	(9)	9	(13)	16
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 ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Foreign Exchange Contracts, Balance Sheet [Member] | Foreign Currency Transaction and Hedge Gain (Loss), Net [Member]
Gain (loss) recognized in income	$ (13)	$ 2	$ (28)	$ 13
Foreign Exchange Contracts, Loans [Member] | Foreign Currency Transaction and Hedge Gain (Loss), Net [Member]
Gain (loss) recognized in income	(22)		(44)	2
Translated Earnings Contracts [Member] | Foreign Currency Transaction and Hedge Gain (Loss), Net [Member]
Gain (loss) recognized in income	(1,201)	162	(2,058)	191
Undesignated [Member]
Gain (loss) recognized in income	$ (1,236)	$ 164	(2,130)	206
Gain (loss) recognized in income			$ (2,058)	$ 191

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Note 14 - Fair Value Measurements (Details Textual) - USD ($)	Jun. 30, 2016	Dec. 31, 2015
Samsung Corning Precision Materials Co., Ltd. [Member]
Business Combination, Contingent Consideration, Asset	$ 237,000,000	$ 246,000,000
IBwave Solutions and Fiberoptics [Member]
Business Combination, Contingent Consideration, Liability	8,000,000
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 ($) $ in Millions		Jun. 30, 2016		Dec. 31, 2015
Current Assets [Member] | Fair Value, Inputs, Level 2 [Member]
Other current assets		$ 103	[1]	$ 522	[2]
Short-term investments
Current Assets [Member] | Fair Value, Inputs, Level 1 [Member]
Other current assets	[2]
Short-term investments				100
Current Assets [Member] | Fair Value, Inputs, Level 3 [Member]
Other current assets			[1]		[2]
Short-term investments
Current Assets [Member]
Other current assets			[1]	522	[2]
Short-term investments				100
Non Current Assets [Member] | Fair Value, Inputs, Level 2 [Member]
Other assets		107	[1],[3]	506	[2],[4]
Non Current Assets [Member] | Fair Value, Inputs, Level 1 [Member]
Other assets	[2],[4]
Non Current Assets [Member] | Fair Value, Inputs, Level 3 [Member]
Other assets		237	[1],[3]	246	[2],[4]
Non Current Assets [Member]
Other assets			[1],[3]	752	[2],[4]
Current Liabilities [Member] | Fair Value, Inputs, Level 2 [Member]
Other accrued liabilities (Note 3 and Note 12)	[1]	211
Other accrued liabilities	[2]			55
Current Liabilities [Member] | Fair Value, Inputs, Level 1 [Member]
Other accrued liabilities	[2]
Current Liabilities [Member] | Fair Value, Inputs, Level 3 [Member]
Other accrued liabilities (Note 3 and Note 12)	[1]
Other accrued liabilities	[2]
Current Liabilities [Member]
Other accrued liabilities (Note 3 and Note 12)	[1]
Other accrued liabilities	[2]			55
Non Current Liabilities [Member] | Fair Value, Inputs, Level 2 [Member]
Other liabilities (Note 3 and Note 12)	[1],[3]	1,400
Other accrued liabilities	[2],[4]			88
Non Current Liabilities [Member] | Fair Value, Inputs, Level 1 [Member]
Other accrued liabilities	[2],[4]
Non Current Liabilities [Member] | Fair Value, Inputs, Level 3 [Member]
Other liabilities (Note 3 and Note 12)	[1],[3]	8
Other accrued liabilities	[2],[4]			10
Non Current Liabilities [Member]
Other liabilities (Note 3 and Note 12)	[1],[3]
Other accrued liabilities	[2],[4]			98
Other assets		1,187		1,493
Other accrued liabilities (Note 3 and Note 12)		1,231		1,308
Other liabilities (Note 3 and Note 12)		$ 3,905		$ 2,242

[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		6 Months Ended
	Jan. 22, 2016	Jan. 15, 2014	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015	Oct. 28, 2015	Oct. 26, 2015	Jul. 15, 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			$ 19,000,000	$ 0	$ 19,000,000	$ 0
July 15, 2015 [Member]
Stock Repurchase Program, Authorized Amount										$ 2,000,000,000
Oct. 26, 2015 [Member]
Stock Repurchase Program, Authorized Amount									$ 4,000,000,000
Oct. 28, 2015 [Member] | Morgan Stanley [Member]
Stock Repurchase Program, Authorized Amount								$ 1,250,000,000
Treasury Stock, Shares, Acquired	15,900,000
The 2015 Repurchase Program [Member]
Treasury Stock, Shares, Acquired			40,900,000		80,700,000
Treasury Stock, Value, Acquired, Cost Method			$ 810,000,000		$ 1,561,000,000
Gain on Realignment of Equity Investment [Member]
Foreign Currency Transaction Gain, before Tax			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

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Note 15 - Shareholders' Equity - Accumulated Other Comprehensive Income (Details) - USD ($) $ in Millions		3 Months Ended		6 Months Ended
		Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Accumulated Foreign Currency Adjustment Attributable to Parent [Member]
Balance		$ (743)	$ (837)	$ (1,171)	$ (581)
Other comprehensive income (loss)		240	(62)	625	(236)
Equity method affiliates		(44)	22	(1)	(60)
Net current-period other comprehensive income		196	(40)	624	(296)
Balance		(547)	(877)	(547)	(877)
Accumulated Defined Benefit Plans Adjustment Attributable to Parent [Member]
Balance	[1]	(588)	(708)	(588)	(709)
Other comprehensive income (loss)	[1],[2]	(29)	(9)	(35)
Equity method affiliates	[1],[3]	265	6	264	(4)
Net current-period other comprehensive income	[1]	265	5	265	6
Balance	[1]	(323)	(703)	(323)	(703)
Amounts reclassified from accumulated other comprehensive income (2)	[1],[2]	29	$ 8	36	$ 10
Balance				(1,811)
Balance		$ (966)		$ (966)

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

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Note 16 - Share-based Compensation (Details Textual) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 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	$ 5	$ 7	$ 8	$ 11
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	9		$ 9
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition			1 year 328 days
Proceeds from Stock Options Exercised			$ 27	98
Restricted Stock [Member]
Allocated Share-based Compensation Expense	9	8	15	14
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized	37		$ 37
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition			1 year 328 days
Allocated Share-based Compensation Expense	$ 14	$ 15	$ 23	25
Proceeds from Stock Options Exercised			27	98
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Intrinsic Value			$ 15	$ 46
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	6 Months Ended
	Jun. 30, 2016 USD ($) $ / shares shares
Balance (in shares) | shares	42,738
Balance (in dollars per share) | $ / shares	$ 19.40
Granted (in shares) | shares	1,624
Granted (in dollars per share) | $ / shares	$ 19.93
Exercised (in shares) | shares	(2,087)
Exercised (in dollars per share) | $ / shares	$ 13.13
Forfeited and Expired (in shares) | shares	(4,256)
Forfeited and Expired (in dollars per share) | $ / shares	$ 26.08
Balance (in shares) | shares	38,019
Balance (in dollars per share) | $ / shares	$ 19.02
Options Outstanding	4 years 21 days
Options Outstanding | $	$ 110,178
Options Expected to Vest (in shares) | shares	37,968
Options Expected to Vest (in dollars per share) | $ / shares	$ 19.02
Options Expected to Vest	4 years 18 days
Options Expected to Vest | $	$ 110,158
Options Exercisable (in shares) | shares	33,177
Options Exercisable (in dollars per share) | $ / shares	$ 18.78
Options Exercisable	3 years 131 days
Options Exercisable | $	$ 108,177

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Note 16 - Share-based Compensation - Inputs Used for Valuation of Option Grants under Stock Option Plans (Details)	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Minimum [Member]
Expected volatility			40.20%	44.50%
Weighted-average volatility			40.20%	44.50%
Expected dividends			2.89%	1.92%
Risk-free rate			1.50%	1.90%
Average risk-free rate			1.50%	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%	2.24%
Risk-free rate			1.60%	1.90%
Average risk-free rate			1.60%	1.90%
Expected term (in years)			7 years 146 days	7 years 73 days
Pre-vesting departure rate			0.60%	0.60%
Expected volatility	40.20%	44.50%
Weighted-average volatility	40.20%	44.50%
Expected dividends	2.89%	2.24%
Risk-free rate	1.60%	1.90%
Average risk-free rate	1.60%	1.90%
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	6 Months Ended
	Jun. 30, 2016 $ / shares shares
Balance (in shares) | shares	5,242
Balance (in dollars per share) | $ / shares	$ 17.91
Granted (in shares) | shares	1,279
Granted (in dollars per share) | $ / shares	$ 20.44
Vested (in shares) | shares	(1,635)
Vested (in dollars per share) | $ / shares	$ 14.25
Forfeited (in shares) | shares	(49)
Forfeited (in dollars per share) | $ / shares	$ 21
Balance (in shares) | shares	4,837
Balance (in dollars per share) | $ / shares	$ 19.79

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Note 17 - Reportable Segments (Details Textual)	6 Months Ended
	Jun. 30, 2016
Minimum [Member]
Number of Material Formulations	150

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Note 17 - Reportable Segments - Reportable Segments (Details) - USD ($) $ in Millions		3 Months Ended		6 Months Ended
		Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Operating Segments [Member] | Display Technologies [Member]
Net sales		$ 801	$ 789	$ 1,506	$ 1,597
Depreciation	[1]	149	152	300	308
Amortization of purchased intangibles
Research, development and engineering expenses	[2]	17	26	35	50
Restructuring, impairment and other charges		2		16
Equity in earnings of affiliated companies			(3)		(5)
Income tax (provision) benefit		(86)	(136)	(179)	(268)
Net income	[3]	204	303	413	597
Operating Segments [Member] | Optical Communications [Member]
Net sales		782	800	1,391	1,497
Depreciation	[1]	43	43	84	81
Amortization of purchased intangibles		8	11	15	17
Research, development and engineering expenses	[2]	36	35	73	68
Restructuring, impairment and other charges				6	(1)
Equity in earnings of affiliated companies
Income tax (provision) benefit		(39)	(37)	(50)	(66)
Net income	[3]	77	77	94	94
Operating Segments [Member] | Environmental Technologies [Member]
Net sales		259	260	523	542
Depreciation	[1]	33	32	65	61
Amortization of purchased intangibles
Research, development and engineering expenses	[2]	26	23	51	46
Restructuring, impairment and other charges				5
Equity in earnings of affiliated companies
Income tax (provision) benefit		(19)	(22)	(35)	(45)
Net income	[3]	37	46	71	134
Operating Segments [Member] | Specialty Materials [Member]
Net sales		266	272	493	544
Depreciation	[1]	27	27	55	53
Amortization of purchased intangibles
Research, development and engineering expenses	[2]	34	29	65	60
Restructuring, impairment and other charges		12	3	24	3
Equity in earnings of affiliated companies
Income tax (provision) benefit		(19)	(22)	(31)	(43)
Net income	[3]	38	44	64	82
Operating Segments [Member] | Life Sciences [Member]
Net sales		215	211	419	408
Depreciation	[1]	13	15	28	30
Amortization of purchased intangibles		5	5	10	10
Research, development and engineering expenses	[2]	6	6	12	11
Restructuring, impairment and other charges		1		5
Equity in earnings of affiliated companies
Income tax (provision) benefit		(8)	(9)	(14)	(17)
Net income	[3]	17	18	29	34
Operating Segments [Member] | Other Segments [Member]
Net sales		37	11	75	20
Depreciation	[1]	11	11	22	20
Amortization of purchased intangibles		2		4
Research, development and engineering expenses	[2]	45	44	92	89
Restructuring, impairment and other charges		1		61
Equity in earnings of affiliated companies		(8)	6	(5)	8
Income tax (provision) benefit		23	21	66	44
Net income	[3]	(55)	(45)	(140)	(93)
Operating Segments [Member]
Net sales		2,360	2,343	4,407	4,608
Depreciation	[1]	276	280	554	553
Amortization of purchased intangibles		15	16	29	27
Research, development and engineering expenses	[2]	164	163	328	324
Restructuring, impairment and other charges		16	3	117	2
Equity in earnings of affiliated companies		(8)	3	(5)	3
Income tax (provision) benefit		(148)	(205)	(243)	(395)
Net income	[3]	318	443	531	848
Display Technologies [Member]
Restructuring, impairment and other charges				4
Optical Communications [Member]
Restructuring, impairment and other charges				6
Environmental Technologies [Member]
Restructuring, impairment and other charges				5
Specialty Materials [Member]
Restructuring, impairment and other charges				12
Life Sciences [Member]
Restructuring, impairment and other charges				3
Other Segments [Member]
Restructuring, impairment and other charges				40
Net sales		2,360	2,343	4,407	4,608
Depreciation				561	562
Amortization of purchased intangibles		15	16	29	28
Research, development and engineering expenses		192	191	382	380
Restructuring, impairment and other charges		(2)		78
Equity in earnings of affiliated companies		41	62	100	156
Income tax (provision) benefit		(504)	110	(808)	196
Net income		$ 2,207	$ 496	$ 1,839	$ 903

[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 ($) $ in Millions		3 Months Ended		6 Months Ended
		Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Reportable Segments [Member]
Net income		$ 373	$ 488	$ 671	$ 941
Unallocated amounts:
Net income		373	488	671	941
Non Reportable Segments [Member]
Net income		(55)	(45)	(140)	(93)
Unallocated amounts:
Net income		(55)	(45)	(140)	(93)
Net income		2,207	496	1,839	903
Net financing costs	[1]	(29)	(25)	(58)	(49)
Stock-based compensation expense		(14)	(15)	(23)	(25)
Exploratory research		(28)	(28)	(55)	(54)
Corporate contributions		(16)	(12)	(23)	(24)
Gain		2,676		2,676
Equity in earnings of affiliated companies, net of impairments	[2]	48	59	104	153
Unrealized loss on foreign currency hedges related to translated earnings		(1,253)	(10)	(2,203)	(130)
Resolution of Department of Justice investigation		(98)		(98)
Income tax benefit		98		98
Other corporate items		(50)	(11)	(66)	(13)
Net income		$ 2,207	$ 496	$ 1,839	$ 903

[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.