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To: Jim Willie CB who wrote (38711)	7/9/2001 4:11:55 PM
From: Sully-	Read Replies (1) \| Respond to of 65232

Corning Downsizes Photonic Technologies Business in Response to Industry Conditions Company to close three manufacturing facilities; $5.1 billion charge in second quarter for goodwill impairment and inventory write-offs CORNING, N.Y.--(BUSINESS WIRE)--July 9, 2001-- Corning Incorporated (NYSE:GLW - news) today announced a plan to lower significantly the cost structure of its Photonic Technologies business in response to severely reduced market demand for photonic components and modules. The plan includes the closing of three manufacturing facilities and related workforce reductions of 1000 employees. The cost of this plan will be included in Corning's third quarter results. Corning also said that its second quarter results will include pre-tax charges totaling approximately $5.1 billion to reflect the impairment of goodwill and other intangible assets related to recent Photonic Technologies acquisitions and the write-off of excess and obsolete inventory. ``With the dramatic reduction of infrastructure spending across the telecommunications industry, and our expectation that this market downturn could last 12 to 18 months, we are taking decisive action to lower costs and improve the future profitability of our Photonic Technologies business,'' said John Loose, president and chief executive officer. Corning Photonic Technologies develops and manufactures photonic products including erbium-doped amplifiers, raman and advanced amplifiers, dispersion compensation modules, fiber-based components, DWDM multiplexers and demultiplexers and pump laser products. The business had revenues of $1 billion in 2000. Loose said, ``Our Photonic Technologies business grew 75 percent to 100 percent per year for the past three years, and we originally anticipated similar growth again this year. As a result, we added significant capacity and fixed costs to meet expected market demand that has not materialized. We now expect sales this year in the range of $600 million to $700 million for this business, with significantly lower sales of optical amplifiers and other photonic components. ``The abruptness of this industry downturn is unprecedented. Nevertheless, we have to deal decisively with these new market realities. We do not take these actions lightly. We fully appreciate the difficulties these decisions will have on individuals, families and communities. We deeply regret these unavoidable actions. However, it is important for our shareholders that we improve the profitability of our photonics business.'' Cost Reduction Actions Corning is initiating a process to close three manufacturing facilities by the end of 2001: the Photonic Technologies Benton Park facility in Benton Township, Pa.; Corning Lasertron's Nashua Park in Nashua, N.H.; and the Corning NetOptix operation in Natick, Mass. In addition, the company will scale back its Photonic Technologies operations in Erwin Park, Erwin, N.Y. and at the remainder of its photonics facilities. These actions will result in 1000 employee reductions. Including today's announcement, 3,500 Photonic Technologies positions will have been eliminated since the beginning of the year. This will bring Corning's total 2001 reductions to 5,900 positions or about 15 percent of its' total global workforce of approximately 40,000. Corning is continuing to evaluate the need for further personnel reductions and other restructuring actions elsewhere in the company. Costs related to these potential additional actions and the photonic manufacturing facility closures announced today are expected to result in a third quarter pre-tax charge in the range of $300 million to $400 million, of which approximately 75 percent is non-cash. Corning expects to realize annualized pre-tax savings of approximately $150 million from these combined actions. Quarter Two Charges Corning also announced that its second quarter results will include a pre-tax charge of approximately $300 million to write-off excess and obsolete inventory, primarily due to significantly reduced customer orders in its Photonic Technologies business. With the significantly reduced order outlook and downsizing of Corning's Photonics Technologies business, the company will record an approximate $4.8 billion non-cash, non-tax deductible charge to impair goodwill and acquired intangibles related to last year's Pirelli optical components business and NetOptix acquisitions. This adjustment reflects a combination of lower market multiples for the valuation of these businesses as well as weakened industry conditions. Separately, Corning announced it would discontinue dividends on its common stock on an ongoing basis. Outlook Corning will announce its second quarter 2001 results after the market closes on July 25, 2001. While the results will include the impact of today's announced charges, the company is operating slightly ahead of analyst expectations for the quarter without these charges. However, Corning said as a result of the reduced forecast for its Photonic Technologies unit and the low level of visibility across the telecommunications industry, it believes that pro forma earnings for the second half of the year will be below the current consensus of analyst estimates. Corning said it will not provide earnings guidance going forward, but will provide an update on the status of its businesses in its second quarter earnings announcement. Conference Call Information The company will host a conference call at 5:00 p.m., EDT on Monday, July 9, 2001. To access the call, dial 1-800-619-9064 (Domestic) or 1-712-271-3312 (International). The passcode is UPDATE. A replay of the call will be available beginning at 7 p.m. EDT and will run through 7:00 p.m. EDT, Monday, July 16, 2001. To access the replay, dial 1-800-337-5619 or 1-402-220-9652. No password is required. To listen to a live audio webcast of the call, go to corning.com and follow the instructions. About Corning Incorporated Established in 1851, Corning Incorporated (www.corning.com) creates leading-edge technologies for the fastest-growing markets of the world's economy. Corning manufactures optical fiber, cable and photonic products for the telecommunications industry; and high-performance displays and components for television, information technology and other communications-related industries. The company also uses advanced materials to manufacture products for scientific, semiconductor and environmental markets. Corning revenues for 2000 were $7.1 billion. Forward-Looking and Cautionary Statements Except for historical information and discussions contained herein, statements included in this release may constitute ``forward-looking statements'' within the meaning of the Private Securities Litigation Reform Act of 1995. These statements involve a number of risks, uncertainties and other factors that could cause results to differ materially, as discussed in the company's filings with the Securities and Exchange Commission. Pro Forma Statement Pro forma net income excludes amortization of purchased intangibles and goodwill, purchased in-process research and development, one-time acquisition costs, discontinued operations and other non-recurring items. -------------------------------------------------------------------------------- Contact: Corning Incorporated Media Relations Contact: Daniel F. Collins, 607/974-4197 collinsdf@corning.com - or - Investor Relations Contact: Katherine M. Dietz, 607/974-8217 dietzkm@corning.com Ö¿Ö

To: Jim Willie CB who wrote (38711)	7/9/2001 5:29:44 PM
From: BirdDog	Read Replies (1) \| Respond to of 65232

the Japanese tsunami will be rough when it hits US shores Only if you live in Venice...... :) BirdDog

To: Jim Willie CB who wrote (38711)	7/10/2001 8:37:15 AM
From: stockman_scott	Respond to of 65232

Economists lack an appetite for declaring a recession By David R. Francis (francisd@csps.com) Staff writer of The Christian Science Monitor 7/9/01 <<When the Business Cycle Dating Committee of the National Bureau of Economic Research (NBER) meets to officially decide on the month that an economic expansion has ended, the six economists usually sit down to a meal. The "rookie member" of this committee, Princeton University economist Ben Bernanke does not expect to get that "free French dinner" anytime soon. While the economic data is "quite ambiguous," Professor Bernanke sees no "screaming" evidence of a recession today. Most economists agree. In fact, they expect the economy to recover from its current slowdown in a few months. But if the slump should deepen to the point where national output actually shrinks for a while, it would end the record 10-year-old expansion and Bernanke would get his meal. Another member of the Dating Committee, Jeffrey Frankel, a Harvard University professor, notes that the statistics available so far on gross domestic product (GDP), the nation's output of goods and services, indicate a slowdown, but not a recession. The difference between a slowdown and a recession is a matter of degree. In both cases, unemployment rises, output falls. But a recession is worse. GDP grew at a 1 percent annual rate in the last quarter of 2000 and 1.2 percent in the first quarter of this year. Perhaps output slumped further in the April-June quarter. But a serious downturn must last longer than one quarter to qualify as an official recession. On June 18, Robert Hall, chairman of the Dating Committee, put out a memo noting, "The data normally considered by the committee indicate the possibility that a recession began recently, but the economy has not declined nearly enough to merit a meeting of the committee or the determination of a peak date [for the expansion]." Mr. Frankel, who worked as an economist for the Clinton Administration, sees it as "equally likely" that the economy has merely slowed its pace from the rapid and "unsustainable" 4.5 percent growth rate during the last term of President Clinton. "We got spoiled," he says. Now the economy is reverting to "more normal numbers." The consensus found in a recent survey of 54 economists by The Wall Street Journal, sees recovery at a modest pace - 1.6 percent in the present quarter, 2.7 percent in the fourth. A few economists are gloomier. For example, Dr. Edward Learner, director of the University of California, Los Angeles, Anderson Forecast, sees an 80 percent chance of recession by the first quarter of 2002. "Sluggish growth" the rest of this year and "negative growth" the first half of next year, he says. The Dating Committee proclaims the end of a cycle only after at least six months of statistical data makes clear that the economy has switched gears. For instance, the Cambridge, Mass.-based NBER announced that the previous economic expansion peaked in July 1990, only nine months afterward. The date for the end of that recession, March 1991, was also chosen nine months afterward. So if a recession has started, Bernanke and Frankel won't break bread together until at least next spring. If the expansion has instead reignited, it could be years from now. Cheery economists are encouraged by the Federal Reserve's 2.75-percentage-point cuts in interest rates this year. They figure this action should step up the economic pace by later this summer or fall. Asha Bangalore, an economist with Northern Trust Co. in Chicago, puts great weight on the growth in the nation's money supply. One measure, real M2, has been growing recently above 5 percent. The increased money supply should be "adequate" to provide economic growth at a 3 percent annual rate in the second half of 2001. Ms. Bangalore holds that the Fed has done enough and doesn't need to cut rates further. Otherwise, it might worsen inflation. Contrariwise, Bruce Steinberg, chief economist at Merrill Lynch, the giant brokerage firm, was disappointed that the Fed cut interest rates only 0.25 percentage points, rather than 0.5 percentage points, at its meeting June 27. The Fed is not over-stimulating the economy, Mr. Steinberg argues. It has more room for cuts if needed. "We don't see any inflation risk during 2001-2002," he says. One help for the economy: federal tax rebates, which will add about 10 percentage points to after-tax income growth this quarter, Steinberg figures. So consumer spending could pick up "by Labor Day and certainly by the fourth quarter." Another bit of good news is that energy prices have dropped sharply. "Things are looking up," notes Brian Wesbury, chief economist at Griffin, Kubik, Stephens & Thompson, a Chicago brokerage.>>