2. Restructuring, Impairment and Other Charges (Credits)

2012 Activity

In response to uncertain global economic conditions, and the potential for slower growth in many of our businesses in 2013, Corning implemented a corporate-wide restructuring plan in the fourth quarter of 2012. We recorded charges of $89 million, before tax, which included costs for workforce reductions, asset write-offs and exit costs. Total cash expenditures associated with these actions are expected to be approximately $49 million. Annualized savings from these actions are estimated to be approximately $71 million and will be reflected largely in selling, general, and administrative expenses.

The Specialty Materials segment recorded an impairment charge in the fourth quarter of 2011 in the amount of $130 million related to certain assets used in the production of large cover glass due to sales that were significantly below our expectations. In the fourth quarter of 2012, after reassessing the large cover glass business, Corning concluded that the large cover glass market was developing differently in 2012 than our expectations, demand for larger-sized cover glass was declining, and the market for this type of glass was instead targeting smaller gen size products. Additionally, in the fourth quarter of 2012, our primary customer of large cover glass notified Corning of its decision to exit from this display market. Based on these events, we recorded an additional impairment charge in the fourth quarter of 2012 in the amount of $44 million, before tax. This impairment charge represents a write-down of assets specific to the glass-strengthening process for large size cover glass to their fair market values, and includes machinery and equipment used in the ion exchange process.

The following table summarizes the restructuring, impairment and other charges (credits) as of and for the year ended December 31, 2012 (in millions):


	Reserve at January 1, 2012		Net Charges / Reversals		Non cash adjustments		Cash payments		Reserve at December 31, 2012
Restructuring:
Employee related costs	$	2	$	47	$	(7)	$	(4)	$	38
Other charges (credits)		8		5		(5)		(4)		4
Total restructuring activity	$	10	$	52	$	(12)	$	(8)	$	42

Impairment charges and disposal of long-lived assets:
Assets to be held and used			$	44
Assets to be disposed of				37
Total asset impairment charges and disposals			$	81

Total restructuring, impairment and other charges			$	133

Cash payments for employee-related costs related to the 2012 corporate-wide restructuring plan are expected to be substantially completed in 2013. Cash payments for exit activities were substantially completed in 2012.

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	$	21
Telecommunications		39
Environmental Technologies		3
Specialty Materials		54
Life Sciences		2
Corporate and All Other		14
Total restructuring, impairment and other charges	$	133

2011 Activity

During the fourth quarter of 2011, the Specialty Materials segment recorded an impairment charge related to certain assets used in the ion exchange process for the production of large cover glass. Although sales of Corning Gorilla Glass used in our large cover glass products increased in 2011 when compared to 2010, gross margins continue to be weak and sales volumes were significantly below our expectations in 2011 and both sales and margins are expected to be lower than forecasted in 2012. As a result, certain assets located in Japan used in the ion exchange process for the production of large cover glass were written down to estimated fair value in the fourth quarter of 2011 and an impairment loss of $130 million was recognized. This asset group includes machinery and equipment used in the ion exchange process and facilities dedicated to the ion exchange process.

The following table summarizes the restructuring, impairment and other charges (credits) as of and for the year ended December 31, 2011 (in millions):


	Reserve at January 1, 2011		Net charges/ (reversals)		Cash payments		Reserve at December 31, 2011
Restructuring:
Employee related costs	$	15	$	(1)	$	(12)	$	2
Other charges (credits)		12				(4)		8
Total restructuring activity	$	27	$	(1)	$	(16)	$	10

Impairment of long-lived asset:
Assets to be held and used			$	130
Total impairment charges			$	130

Total restructuring, impairment and other charges (credits)			$	129

Cash payments for employee-related costs related to the 2009 corporate-wide restructuring plan were substantially completed in 2011. Payments for exit activities were substantially completed in 2012.

2010 Activity

Corning recorded credits of $329 million in 2010. During 2009, we had two events which impacted production at several of our LCD glass manufacturing facilities. In August 2009, an earthquake halted production at our LCD glass manufacturing facilities in Japan and in October 2009, production at our facility in Taichung, Taiwan was impacted by a power disruption. In the fourth quarter of 2010, we recorded $324 million in other credits in our Display segment as settlement of business interruption and property damage insurance claims resulting from these events.

The following table summarizes the restructuring, and other charges (credits) as of and for the year ended December 31, 2010 (in millions):


	Reserve at January 1, 2010		Non-cash adjustments		Net charges/ (reversals)		Cash payments		Reserve at December 31, 2010
Restructuring:
Employee related costs	$	80	$	(2)	$	(5)	$	(58)	$	15
Other charges (credits)		20						(8)		12
Total restructuring activity	$	100	$	(2)	$	(5)	$	(66)	$	27

Other charges (credits):
Settlement of business interruption and property damage insurance claims					$	(324)
Total impairment charges					$	(324)

Total restructuring, impairment and other charges					$	(329)