Ken Sofio, Director, Investor Relations Jim Flaws, Vice-Chairman, Chief Financial Officer Wendell Weeks, President, Chief Executive Officer

Brent Thompson, Goldman Ajit Pai, Thomas Weisel Partners Daryl Armstrong, Citigroup John Anthony, SG Cowen C.J. Muse, Lehman Brothers Jeff Evanson, Sanford Bernstein Stephen Fox, Merrill Lynch Nikos Theodosopoulos, UBS Tim Daubenspeck, Pacific Crest Securities Curt Woodworth, J.P. Morgan Ari Bensinger, Standard & Poor's

Good morning and welcome to the fourth quarter results conference call. All parties will be in a listen-only mode until the question-and-answer portion of the conference. This conference is being recorded. If you have any objections you may disconnect at this time. I would now like to turn the call over to your host, Mr. Kenneth Sofio, Director of Investor Relations. Sir, you may begin. Ken Sofio, Director, Investor Relations: Thank you, Lisa. Good morning, everyone. Welcome to Corning fourth quarter conference call. The call is also being audiocast on our web site. Jim Flaws, Vice Chairman, Chief Financial Officer will lead the discussion and Wendell Weeks, President and Chief Executive Officer, will join us for the Q&A. And before I turn the call over to Jim, you should note that today's remarks do contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements involve a number of risks, uncertainties, or factors that could cause actual results to differ materially. These risks are detailed in the Company's SEC reports. Jim. Jim Flaws, Vice-Chairman, Chief Financial Officer: Good morning, everyone. Last night we released our results for the fourth quarter, which can be found on our Investor Relations web site. In addition for those of you with web access we posted several slides this morning that will summarize the key data points from this morning's prepared remarks. These slides will be available on our web site after the call as well. Before we dive into the details we had a very solid quarter which was within our expectations, despite the impact of a stronger dollar. And it finished as an outstanding year for Corning, one that we were delighted with and, hopefully, our investors were also. Here are the details. Sales for the fourth quarter were 1.2 billion, slightly higher than the third quarter and within our guidance range. Fourth quarter sales were driven primarily by higher volume in our Display segment offset by lower sales in Telecommunications and Life Sciences segment. In comparison to the fourth quarter of last year, sales were up 16%. Net profit after-tax, excluding special items in the fourth quarter, was 339 million, and lower than the third quarter. Decline in MPAT was primarily due to higher taxes, lower demand for optical fiber and auto substrates, a decline in equity earnings from Data Corning and the unfavorable impact of currency exchange. You should know all these, except exchange rates, were expected and discussed on the last conference call. In comparison to the fourth quarter of 2004, net profit after-tax excluding special items was up about 90%. EPS excluding special items were $0.22 in the fourth quarter and in line with our expectations. This is an increase of 83% in comparison to our EPS X specials a year ago. You should note these are nonGAAP measures and a reconciliation of GAAP can be found on our web site. As a reminder our third quarter EPS included non-recurring tax benefits which had contributed almost two $0.02 per share. You should also note that fourth quarter sales were negatively impacted by 14 million due to foreign exchange rates used in translation. Impact in MPAT was minor. We also had a onetime catch-up, related to re-measurement of certain balance sheet items in Display that cost an additional 10 million in the quarter. Now let me walk you quickly through some special items for the quarter. We recorded a pretax on after-tax non-cash charge of 443 million to fully reserve our remaining deferred tax asset or DTA. The adjustment primarily relates to our conclusion that a tax planning strategy was no longer prudent. As you remember, in the third quarter of 2004, we established an evaluation allowance against the significant portion of our deferred tax assets. At that time we developed a tax planning strategy to utilize the remaining DTAs before they began to expire in the year 2023, by selling an appreciated asset then. In performing our review of the deferred tax assets in the fourth quarter, we concluded that we could not say under certain circumstances that selling the depreciation assets would be prudent and feasible for the Company. As a result we were required to take this charge. As a reminder it is non-cash. This charge has no impact on our NOLs. They remain available to shelter income primarily in the United States. And the majority of them do not expire until 2020. We also recorded a non-cash pretax and after-tax gain of 84 million, related to the release of translation capital from a foreign subsidiary that was liquidated during the fourth quarter. The subsidiary was related to our photonics business which was sold to Avanex in 2003. After the business sale we began liquidating that subsidiary. In October of '05, the assets were substantially liquidated which triggered the release of translation capital. We also recorded a charge of 8 million to reflect the ongoing mark-to-market adjustment on the Corning shares to be contributed to the Pittsburgh Corning settlement. The charge was resolved in an increase in Corning share price during last quarter from $19.33 to $19.66. Lastly, we recorded a loss of 3 million in the final redemption of our 0 coupon convertible debentures. You can find a reconciliation of all these special items on our IR web site. On continuing down the income statement, gross margins were 44% in the fourth quarter and as expected slightly lower than the third quarter. Decline in gross margin was primarily due to lower margins in our Telecom and Environmental segments. SG&A was 203 million in the fourth quarter or 16.9% of sales. This was higher than the third quarter but within our guidance. As a reminder our SG&A was lower in the third quarter and higher in the fourth. Equity earnings were 186 million in the fourth quarter and higher than the third quarter. As a reminder, third quarter equity earnings of 74 million included a 106 million restructuring and impairment charge, related to the Samsung Corning CRT. The higher fourth quarter equity earnings were primarily the result of strong volume in Samsung Corning Precision, offset by lower equity earnings at that point which were expected. I will discuss both SCP and Dow Corning's results in more detail in a moment. Now let's move onto the segment results for the quarter. Starting with Display, sales were 518 million in the fourth quarter, a 6% increase over the third quarter sales of 489 million. This increase reflects sequential volume growth of 14%. A 6% unfavorable change in the end and a slightly lower pricing. As a reminder whenever are referred to LCD class pricing it is on a mixed weighted basis. Equity earnings from SAP were 129 million in the fourth quarter and higher than third quarter equity earnings of 114 million. You should note that equity earnings in the fourth quarter benefited from a one-time 5 million tax adjustment. Sequential volume growth was up 9% and higher than our expectations. Pricing was down slightly. As a result sequential volume growth for our consolidated display segment which includes our wholly-owned business Flux SCP was up 11% in fourth quarter. Net income in the display segment which includes equity earnings fell from 363 million in the third quarter to 328 million in the fourth quarter. Net income was primarily the result of slightly lower gross margin percent, higher effective tax rates, higher operating expenses offset by gains at SET. Gross margin percent in the fourth quarter in our wholly-owned business was slightly lower due to purchases of glass from SCP which we resell at a low profit and the previously mentioned read measurement adjustment. In comparison to the fourth quarter of last year, sales in our Display segment grew 67% primarily due to volume gains of 92%, offset by price declines at about 5% and unfavorable exchange rates. Net income including equity earnings increased 66% in comparison to the fourth quarter of last year. For the full year, Display segment revenues were 1.7 billion, a 57% increase over 2004's segment sales of 1.4 billion. Volume growth for the year was 64%, offset by slight price declines and unfavorable foreign exchange rates. I'd like now to spend a few minutes updating you on end market trends during the fourth quarter. I'd like to stress we don't have perfect information. We use a variety of sources ranging from services that are available to you such as Display search, along with retail tracking vendors, our own discussion with customers as well as our own models. We think the information is useful but not perfect. With that in mind you should know the following data has been derived from an aggregate of industry sources that are considered at this time to be preliminary estimates. The final data for the fourth quarter will not the available for another month. To be clear the data we reference here relates to shipments from PC manufacturers and TV set makers to retailers. Preliminary data shows end market shipments are tracking ahead of our forecast for all 3 end products. Notebooks, LCD monitors and LCD televisions. Starting with notebooks, about 17.5 million were shipped in the fourth quarter, which was higher than our expectation. This was an increase of 10% over the 16 million shipped in the third quarter. Moving to monitors, about 27.5 million were shipped in the fourth quarter which was also higher than our expectations. In the fourth quarter we believe the penetration of LCD monitors to total monitors sold was around 74% compared to 69% in the third quarter. For LCD televisions almost eight million were shipped in the fourth quarter, a 42% increase are the third quarter. We are estimated that LCD television penetration was around 13% worldwide in the fourth quarter. In fact in the United States, we believe LCD television penetration may have reached 21% during the holiday season. For the year, LCD television penetration was 11%, slightly higher than our original estimates. We were also pleasantly surprised that the average screen size approached 25 inches. Based on preliminary data we estimate there were almost 21 million LCD televisions shipped in the year 2005. For those who were concerned about the inventory in the supply chain, we did not see any excess buildup during the quarter. Based on our industry contacts there appears to be about two week excess of monitoring inventory which is well within the normal range for this time of year. The inventory is expected to clear through January. In addition, we have always told investors to keep an eye on panel pricing. If panel pricing falls dramatically in a short period of time, that could indicate there was inventory at the panel makers. Panel pricing in the fourth quarter fell very modestly, just 2 to 4% which tells us the further, which is, to us, is further evidence that monitor levels were not a concern at panel makers. We did receive a lot of questions during the quarter regarding Dell and the publicly announced monitoring inventory situation. We believe that this was an isolated incident, due to their overestimation demand, and not a reflection of the industry as a whole. Now regarding LCD television inventories based on the numbers shipped and industry shortages of certain sizes, we believe the inventory levels for LCD televisions were normal to low, depending on the size. We believe the strong fourth quarter demand for LCD televisions was fueled by falling retail prices. In December, the average retail price for a 32 inch LCD television was 60% lower than a year ago. In fact, you can now find many brands selling LCD televisions here in the States for under $1000. You should note that strong fourth quarter volume was the result of increased demand for Gen 5 and higher glass. In the fourth quarter, Gen 5 and higher accounted for 80% of our total volume including SCP. That is up from 77% in the third quarter. The mix of Gen 5.5, 6 and 7 glass was almost 40% in the fourth quarter, up from 33% in the third quarter. Now regarding our competition, as we noted on the third quarter call, we did see more competition on Gen 6 glass. This was not a surprise to us as we have been producing Gen 6 glass since June of 2003 and have been competing with NG for over a year now. Regarding our customer deposits we received 55 million in cash in the fourth quarter bringing the total to 457 million 2005. All customers remain current on their deposits. In the second quarter we began issuing credits against these deposits as customers began to purchase glass under the agreements. Credits issued totaled 16 million in the fourth quarter and 29 million for the year. In January, we officially announced the opening of our new LCD glass manufacturing facility in Taichung, Taiwan. We are very excited about the new plant because we believe it will be the most cost-efficient facility in the world for making LCD glass. There are currently multiple tanks that are lit and producing good glass. In fact we began shipping finished glass to our customers from this facility a few weeks ago. Now moving to the Environmental segment. Sales in the fourth quarter were 142 million and, as expected, fairly consistent for sales in the third quarter. In our automotive product line, sales were lower due to seasonally weaker demand. Diesel volume was higher in the fourth quarter driven by the heavy-duty retrofit sales to Korea and now light-duty filter sakes to VW. We continue to be pleased with the progress the diesel product line has made in the past year. from a technology development standpoint on the commercial front. The Environmental segment as a whole had a loss of 16 million in the fourth quarter, in comparison to a loss of 5 million in the third quarter. Increased loss was primarily due to the lower auto sales and manufacturing performance. In our Life Sciences segment, sales in the fourth quarter were 63 million and lower than the third quarter sales of 70 million. Sales were lower than expected as our primary distributor worked off some inventory during the fourth quarter. The segment incurred a net loss of 12 million in the fourth quarter compared to a loss of 7 million in the third quarter. Life Sciences sales for the year were 282 million compared to 304 in 2004. The 7% decline was well within our expectations, given the difficult task of converting many customers to a new distribution channel this past year. We have been very pleased with how well that conversion has gone and do not expect to see a material impact to our sales going forward. Moving to the Telecommunications segment, sales in the fourth quarter were 383 million, a 4% decline from the third quarter and in line with our expectations. Sales of our hardware and equipment products were 190 million in the fourth quarter up from 182 million in the third quarter. Increase is primarily due to higher demand in North America, particularly related to fiber-to-the-premises. Sales in our fiber and cable products in the fourth quarter were 193 million down from the third quarter level of 216 million, as expected. Decline was due to seasonally weaker fiber volume particularly in North America and Europe. Fiber pricing during the quarter was flat sequentially. Telecommunications segment had a net income of 70 million in the fourth quarter but that included the one-time gain of 84 million I mentioned earlier. In our other reportable business and sales in the fourth quarter were 93 million compared to 87 million in the third quarter. The increase was primarily due to higher semiconductor material sales. Equity earnings from Dow Corning were 50 million in the fourth quarter, lower than the third quarter but in line with our expectations. Dow Corning's results were impacted by expansion spending at its facilities in Asia, unfavorable exchange rates and seasonality. Dow Corning had the most successful year in its history in 2005, no small feat given it's just celebrated its 62nd anniversary. Full year sales were 3.9 billion up 15% over 2004. All 12 industries reported sales growth except for two. Net income was 506 million, which increased an impressive 113%. We will have much more transparency in the Dow Corning's performance during our annual investor meeting next week. Moving to the balance sheet, we ended the fourth quarter with $2.4 billion in cash and short-term equivalents, consistent with the third quarter. The most significant cash enclosed in the quarter were from our operating activities, which benefited from lower working capital, 86 million dividends from equity companies, and 55 million in customer deposits. Cash flow from Operations totaled 659 million. The most significant outflow in the fourth quarter was 477 million in capital expenditures, mostly for display expansions. Free cash flow during the fourth quarter was 227 million. In the fourth quarter, we used 277 million in cash to pay off the remaining 0 coupon debentures. For the year we are pleased to report we had free cash flow of 443 million. As a result we ended the year with a little over 1.8 billion in debt. More importantly, we had cash in excess of debt totaling 627 million. You should note the free cash flow was a nonGAAP measure. Our inventory balance was 570 million in the fourth quarter versus 559 million in the third quarter. The increase is primarily due to our plan to build more LCD glass and diesel product inventory. You may have also noticed an increase in the other asset line item in our balance sheet. It's primarily the result of the elimination of our minimum pension liability at the end of the year. As a result we effectively ended the year with a pension asset, which required us to reclass a debt balance from pension liability to a long-term asset account. Our U.S. pension plan is now almost fully funded on a PBO basis. Now turning to the outlook, I would like to provide a wrap up by providing you our guidance for the first quarter. We are expecting revenues in the range of 1.2 to 1.25 billion and EPS in the range of $0.21 to $0.23 per share before special items. As a reminder our first quarter EPS will include a penny of option expense, which will impact us for the first time under the new accounting rules. For your models you can use approximately a penny each quarter for the remainder of the year also. Moving down the income statement for your modeling purposes, gross margins for the Company should be between 43 and 45%. SG&A is expected to move up to about 18% of sales as most of the impact of option expense will fall there. Our D&E is expected to be around 10% of sales. We anticipate equity earnings in the first quarter to be flat to slightly higher than the fourth quarter. For modeling purposes we are estimating Dow Corning's equity earnings in the first quarter to be between 60 and 65 million. Again we will provide a more detailed outlook for Dow Corning during our investor meeting on February 3rd. As a reminder, our first quarter equity earnings will not contain the 5 million onetime tax benefit at SCP that I mentioned earlier. Regarding our tax rate it remains difficult to forecast, given the changing mix of our domestic and international earnings. For your modeling purposes you should use a range of 20 to 25%. Lastly you should use 1.57 billion shares for the first quarter when calculating EPS before Special Items. Another comment on share account as I mentioned on previous calls you should expect some executive selling after the February 3rd investor conference. We do have some expiring option grants early this year so you may see exercise and sale of those. As always we encouraged executive selling in a limited timeframe after our earnings announcement. One note on the impact of foreign exchange on our guidance. We ordinarily do not forecast on each change in FX for translation purposes within our guidance. However, our guidance for the first quarter does assume the ending dollar rate of approximately 115 versus the 117 rate that was used in the fourth quarter for translation. If the end of $1.08 moves to 120 we estimate our sales will be impacted by 22 million and MPAT by approximately 13 million. Includes any benefit from our currency hedging program. In our Display segment we are forecasting sequential volume growth for our wholly-owned business to be up 5 to 10% in the first quarter. Level volume growth will be dependent on our own ability to add larger size glass production during the quarter as well as our customers' ability to continue to ramp their new flats. We are anticipating sequential LCD glass pricing to be down more significantly in the first quarter than in recent quarters. However as a result of our ongoing cost reduction programs, benefit of additional volume large size glass and the absence of the foreign exchange re-measurement, we believe we could maintain our Display gross margins during the quarter. While we do not provide guidance beyond one-quarter at a time I can tell you we currently expect sequential quarter price declines to be more in line with a longer run historical levels for the remainder of the year. We have some logic for this point of view but, obviously, we could be wrong. We have experienced significant price competition in recent months. More competition on both Gen 6 and more competitive capacity in general. This timing is similar to last year. As we stated before, excluding penetration facts we think Q2 and Q3 are the strongest quarters for a glass supply to panel makers and therefore, the period is when glass is likely to be tight. The key for us remains our ability to lower costs as pricing comes down. We've done a great job in this area and intend to do so again in 2006 particularly with our capacity additions in Taichung. Given the higher volume and lower pricing we expect first quarter sales in the Display segment to be flat to up slightly, compared to the fourth quarter. At SCP we are expecting sequential volume to be flat to up 5%. Pricing pressure at SCP will not be as significant as the base business. But it could be enough to offset volume gains. In total, Display segment volume is expected to be up between 3 and 8% sequentially in the first quarter. In our Telecommunications segment we expect first quarter sales to be flat in comparison to the fourth quarter. In hardware and equipment, we expect first quarter sales to be up slightly sequentially, driven by a modest increase in fiber-to-the-premise demand. In fiber and cable, we expect first quarter sequential sales to be down slightly, as modest seasonal volume increases could be more than offset by price declines. As a reminder, many of our larger contracts are renegotiated during the first quarter. Regarding our other segments, we expect first quarter sales for Environmental to be up 5% sequentially; anticipate seasonally higher auto demand to be offset by lower diesel retrofit volume. Sales in our Life Sciences segment are expected to be up 5% to 10% in the first quarter compared to a seasonally weaker fourth quarter. First quarter sales at our other reportable businesses are expected to be consistent with the fourth quarter. Ken? Ken Sofio, Director, Investor Relations: Thank you, Jim. And Lisa, I believe we're ready to take some questions now. Questions & Answers:

Q - Daryl Armstrong: Thanks, Jim, for providing the color on the inventory situation. Could you just give me a little bit of additional color, what are the assumptions for PC monitor growth that's embedded in your Q1 guidance? And then I have a follow-up. A - Jim Flaws: I don't have the specific number for the monitors handy, Daryl, but we are looking for monitor penetration to grow over the course of the year. So I assume it would be up a little bit in the first quarter. Q - Daryl Armstrong: And then second of all, in terms of the cost reduction and manufacturing efficiencies that you guys talked about, how much of an impact are you seeing currently from the low utilization of the Taichung plant? Just so I'll get a sense in terms of how much of a benefit you'll see as the capacity utilization on that plant ramps over the course of the year? A - Jim Flaws: The impact is relatively minor, but it is a little bit, it's impacting our gross percent just a small amount. And we expect it to continue to impact us in the first part of the year, but then as we begin to fill up the factory in the later part of the year that will help us quite a bit. Q - Daryl Armstrong: Thank you.

Our next question comes from the line of John Anthony with SG Cowen. Q - John Anthony: Couple quick questions. Can you just remind us of how the customer deposits flow through the P&L? A - Jim Flaws: The customer deposits never flow through the P&L. They just show up when the cash comes in. It shows as an inflow on our cash flow statement. We break it out separately. It goes onto the balance sheet obviously as cash and then a liability. Then, when we ship a customer, the only thing that shows in our P&L is what we normally, we make the product, invoice them at full price and revenue, end up with accounts receivable. When the customer moves to pay it, they would say to us, "we're giving X amount of cash and please take a little out of our prepaid deposit". So the P&L is never impacted by this. It's strictly on a balance sheet and cash flow item. Q - John Anthony: Great. Also, could you also comment on two things, one on the telco side. Have you seen any resurgence in demand? I guess if we're looking at the linearity throughout the year relative to Verizon's expectations for passing an additional three million homes, do you have any better sense for what the linearity would look like? And then secondly, on the Environmental side, I know you've talked about this a bit in the past, but can you just give us an update if the timing has changed at all? When you expect the '07 opportunity to kind of kick in? A - Jim Flaws: Why don't you take Telecom and I'll take the Environmental. A - Wendell Weeks: So in the Telecom segment we would expect the cycle to look a little like the total cycle for Telecom, which is, we would expect strength to build through quarter two to quarter three and fall off a little in quarter four. And if on the Environmental side, the diesel, you mean the diesel piece, we would expect that to ramp strongly through the year as we get ready for all heavy-duty vehicles in the U.S., all new heavy-duty vehicles in the U.S., to have a diesel emissions control technology as part of the U.S. 2007 rules.

Our next question comes from the line of C.J. Muse with Lehman Brothers. Q - C.J. Muse: Good morning, I've got a couple questions. I guess first, on glass pricing, I'm trying to get to what that number looks like for 1Q. You talked about volume up 5% to 10%, favorable impact of yen of 2%. Does that imply something of 5, 6, 7% price degradation in 1Q? A - Jim Flaws: So what we would say about pricing if asked, that it would be upper single digits on pricing in the first quarter. Q - C.J. Muse: Upper single digits? A - Jim Flaws: That's correct. Q - C.J. Muse: Okay. And when you look to the rest of the year, what gives you confidence that, aside from the view that glass capacity or glass supply will tight, what gives you confidence that it will revert back to historical-type numbers? A - Jim Flaws: For us, you think LCD glass pricing, there's a number of things that impact it. And you've got to determine sort of how you believe all those different factors will interact. On the positive side, from a seller's standpoint, introduction of larger Gen sizes positively increases our glass price. As we look at 2006, we expect a pretty significant ramp in the Gen 7 and larger sizes. Then of course as glass supply and demand, which we think is pretty neutral in the Gen 6 and below range, and will be pretty tight in Gen 7 and above, and that tends to be impacted by TV penetration, which as you heard Jim say, was pretty strong in quarter four. On the negative side, we would expect continued customer pressure. If you take a look over the last year, our panel customers' prices went down sort of the high teens, while ours were down single digit. So that mismatch increases customer pressure. And then finally, as our relative degree of competitive advantage, on the positive side, our product quality and reliability helps us maintain a strong premium. On the negative side, we're finally seeing some competition in the Gen 6 and below range. So it's really that whole combination of things we need to make a judgment about. It is our judgement right now that we would expect that after what we go through here in quarter one to return to the historical pattern. Q - C.J. Muse: Got you. And in terms of your ramp of Gen 7 capacity, and in your discussions with customers that are ramping the capacity, what are your expectations in terms of when that will really flow through your balance sheet, the glass demand? A - Jim Flaws: I think we need to break out separately thinking about the wholly-owned business versus the equity venture. The venture Gens, the venture should see substantial ramps from the jump to Gen 7.5 at LPL and the additional capacity that Samsung is adding in their second Gen 7. And we think we will begin to see 7.5 now and the 7 starting in the second quarter. In our wholly owned businesses, we expect to see Gen 8 volume beginning, starting essentially at significance in the third quarter and going into fourth. The Gen 7 volume in our wholly owned business will really be relatively late in the year because those are Taiwanese start-ups and they don't happen till much later. We are expecting to see substantial growth in our Gen 6 volume as the year progresses in our wholly owned business because there's quite a bit of additional capacity being brought up and we expect to win more than our fair share of those. And also a reminder on the Gen 5.5 at Techma which is essentially a Gen 6. Last year, they were below their original expectations that will be coming on a little strong and that's very favorable for us also. Q - C.J. Muse: Great. Last question. On the margin front, looks like Display margins, net margins fell from 50% to 38% sequentially. You attributed that to a slight decay in gross margin. Also an uptick in outbacks and increase in tax. Can you talk about what we should expect going forward? A - Jim Flaws: What we've said is that if pricing as we said, remember we are disclosing that it could be above 5 but less than 10, that's what upper single digits means, that we will, we think we could with the combination of cross reduction when the absence of the FX items begin to hold our gross margins in Q1. We don't expect to see that significant level of price reduction in the remaining quarters as Wendell just said and the key for us is, as we've shown you before, can we continue to drive our cost down during the remaining quarters as we've done in the past year? We think it's quite an achievement to hold the gross margin in Q1 and if pricing is moderate from then on out, we feel quite confident about our ability to reduce cost. Q - C.J. Muse: But I guess how about on the operating expense side and the tax, and taxes were up six points and OpEx was higher. Was that related to the ramp in the new Taiwanese facility and can you comment on expectations for tax for the Display core business? A - Jim Flaws: So on the tax then, you may recall you are looking at what we call the fully allocated results. You remember in the fourth quarter we said we had an unusual tax benefit of $0.02 per share? And that essentially was we lost that benefit having into Q4. So you will, the tax rate that you will see will be we think relatively stable within the Display business going forward. And at the analysts' day, we are going to show you quite a bit of detail on the segment Tax Rates. On Operating Expenses, I think you'll see it climb moderately in the Display business as the year ago long. As I mentioned to you, the fourth quarter is generally our highest and has a big pop up in Operating Expense but I think you'll see modest increases as the year goes along. Q - C.J. Muse: Great, Jim. Thank you.

Our next question comes from the line of Jeff Evanson with Sanford Bernstein. Q - Jeff Evanson: Hi, as you see the market evolve both to larger TVs and more mass market sales of televisions, are you seeing any changes in the technical specifications for glass being demanded by the panel manufacturers? A - Jim Flaws: Within the active matrix, LCD technology, the main demands we see going for increased size and then with that increased size it gets progressively more difficult to provide inclusion-free and perfect glass. So, in that way, yes, it gets harder but, we're not seeing specific gen gen to gen specification tightening. Q - Jeff Evanson: And within a particular generation, are you seeing any changes, either weaker or tightening, quarter-to-quarter? A - Jim Flaws: In terms of specification or supply? Q - Jeff Evanson: For example, are customers getting to accept more inclusions for Gen-6 glass for some types of televisions? A - Wendell Weeks: Every once in a while, you'll hear noise about depending on where they are what they are trying to enable versus different glass suppliers and then what is the quality level that they are aiming at for their customers, be it B brands, A brands, etc. You will hear noise levels around this point that you're raising. But, I would characterize it as that rather than any sort of significant trend one way or the other. The bottom line is if our customers can get high-quality glass supply at attractive prices, they will always take that over lower quality. Q - Jeff Evanson: In this quarter and for your projections, you're looking at faster volume growth rates in the wholly-owned business than in Samsung Corning precision, which is consistent with the statement coming out of Taiwan a couple of weeks ago that you're looking for more of a 70-30-ish split between sales by 2007 for the wholly-owned business in Samsung Corning. Any thoughts on that? A - Jim Flaws: It's Jim. We've often gotten wrong exactly the growth rate in the wholly-owned versus Korea. But what is slowing us a little at Korea last quarter and this quarter is that both our large customers there have not had much capacity to ramp. And now, that's about to change with the LPL 725 and Samsung's second 7. So those come on strong, you could see excellent growth there. So I don't think you're going to see a wildly divergent, between the two. But obviously we did edge ahead this past year in terms of the wholly-owned business being slightly larger than SCP.

Our next question comes from the line of Stephen Fox, Merrill Lynch. Q - Stephen Fox: First of all, just clarifying the Generation 6 pricing trends. My understanding is that typically it would be more rapid declines than, say, the older generations. Are you seeing something out of the ordinary on that that you think is going to persist? Or how would you describe it relative to typical price curves when you get to this level of production on Gen-6? A - Jim Flaws: Well, remember Gen-6 is now 2 1/2 years old. We now have two solid competitors delivering capacity. So, the price declines I would say as a business it doesn't have a lot of history but maybe typical of what happened when everybody showed up with Gen-5 capacity. But, the price declines are not out of the, what we would classify as ordinary on the declines within a generation when we get to this stage of maturity. We've had Gen-6. We've had quite a bit of time to ourselves with this. And now we've got competition and we're not afraid of it and we are reducing the costs on it. Q - Stephen Fox: And then in terms of Gen-6 levels versus, say, when Gen5 competition showed up, is the mix higher, Jim, on Gen-6 for your production than it was when Gen5 competition showed up? A - Jim Flaws: The mix within…… Q - Stephen Fox: The mix of Gen-6 vis a vis your total glass business. A - Jim Flaws: I would say it's hard to judge. It's maybe slightly lower, I would say, because you know what really changed the mix structure of this business first when Gen5 showed up, it was so much bigger than previous ones. Now, Gen-6. But you are building it, layering the Gen-6 on top of having Gen-5's and not in the base. When Gen-5 showed up, it was relatively tiny from the other generations. Q - Stephen Fox: One last question on CapEx. Any comments for the quarter or the year in where capital spending looking? A - Jim Flaws: We're thinking between 1 3 and 1 5 on the CapEx for the year. Just diesel will be up a little versus this past year and then, you know the variability really comes from what we see in the growth rate in Display and what we need to prepare for in '07.

Our next question comes from the line of Nikos Theodosopoulos with UBS. Q - Nikos Theodosopoulos: With the new pricing that you will be taking in the first quarter, what do you think your price premium, if any, will be in Gen-6 glass versus the competition after you go through with this price cut? A - Jim Flaws: Well, Nikos, it's hard to for us to tell, I mean it's, in this near-term, the actual dynamics of the competition make it very hard to tell exactly where we are in terms of specific premiums on specific Gen size. You know, we've got a few quarters into the future and we'll able to see a little more clearly in the rearview mirror exactly where we are. We expect that as in other of the gen sizes, Corning will continue to maintain a premium over this over the sweep of time given superior reliability and quality of the glass. Q - Nikos Theodosopoulos: Last year, when you gave guidance for the first quarter on pricing, you actually ended up doing better. The market was, the pricing didn't come down as much. You know, why do you think that happened last year and is there a chance that they might happen this year or do you, or the guidance you're giving is more reflective of contractual agreements that you just went through with your customers? A - Jim Flaws: Well, it's certainly possible that the same thing could repeat if we would do better than what we've just said. We try to give you our best view of what we're expecting to see. But, there's no, I would not say that I would relate this to contractual changes any more than we would have said last year. Q - Nikos Theodosopoulos: And just two quick others. In '05, what was your cost reduction in LCD. What were you actually able to reduce costs by, you know, on a blended basis across your product portfolio? A - Jim Flaws: You will have to wait formally until February 3rd. But, I think you can see that we moved our gross margin up from being in the 50s to being in the 60s and didn't have much price decline. So that should give you a hint. Q - Nikos Theodosopoulos: Last question. On Environmental, the gross margin and operating margin of this business continues to be disappointing. And I'm trying to understand, as you ramp this diesel business this year and ramp it even more in '07, what are the target gross margin or operating margin for this business, let's say in the second half of '07, once a lot of the startup costs are behind you, what could this business get to? A - Jim Flaws: What we're aiming at the diesel business when we get to maturity is to get our gross margins in the mid-40% range. That's where auto has been all the time. Frankly, right now, we've got some disappointment on auto, where we're not doing as well as we would like. So we have opportunity to improve our performance in our auto business and we intend to get the diesel there eventually. You'll start to see significant improvement in the gross margin in the end of '06 and clearly as we go through '07, if the revenues come in as we expect and the, we manufacture like we want to. I don't think you will hit maturity though, until we get to '08.

Our next question comes from the line of Tim Daubenspeck with Pacific Crest Securities. Q - Tim Daubenspeck: First question, just to clarify on the gross margin commentary about the March quarter, you're talking about maintaining gross margins. Is that for both Display as well as the overall business? A - Jim Flaws: The comment was, we've been focusing on most of the interplay here has been on the could for the display business that we believe we could maintain the margins we saw in fourth quarter. As far as total corporation, we gave earnings of 43 to 45. The last quarter was 44, right in the middle of that. So, it is somewhat dependent on how things play out. But, the big focus here is really on Display. Q - Tim Daubenspeck: Okay. And then, in terms of display, as you move through the year, if it plays out as you expect in terms of more normalized pricing and you continue to get down the cost curve, I know you are not giving full year guidance but is it possible that the March quarter could be kind of a, the bottom, how do I say this? The bottom for gross margins for Display and we could see improvement in Display as we move through the year? A - Jim Flaws: I think you will have to base that on what you feel the assumptions are, if price declines are very, are moderate in the remainder of the year, and we do our job on cost reduction, there is certainly that opportunity.

Our next question comes from the line of Curt Woodworth with J.P. Morgan. Q - Curt Woodworth: On the diesel business, 2005 is obviously a critical year for you. Do you feel like you accomplished everything you needed to do this year to position yourselves to capture a large part of that billing in other markets that you talked about seeing in 2008? And secondly, could you talk a little bit more about how you see the ramp? You talked about a significant ramp this year and then more in 2007, reach maturity in 2008. Could you just put more, maybe some more numbers around that to help us with our modeling? Thank you. A - Wendell Weeks: To the second part, on the February 3rd investors meeting, we're going to spend more time on diesel than we have historically. We're actually going to have a division manager for diesel provide a lot more detail and color on sort of what the ramp looks like, how do you begin to size the market opportunity and sort of what the slope will start to appear to be over time. I would point out that I don't think 2008 will represent the maturity point for our diesel business, or if it will show significant growth beyond that. Now, to your first question, you need to segment it. Let's deal first with the most significant investment area for us, which was U.S. heavy-duty vehicles. And, what this is, is this is aimed to meet the regulations in 2007 to clean up diesel particulate, exhaust. We feel very good about where we are with winning positions at all the major customers for U.S. heavy-duty diesel. So, we feel great about that. In light-duty diesel, we are, that's primarily a European market and what our goal was this year was to successfully enter that market. The incumbent technology today, something called silicon carbide, which we do not produce. We introduced a brand-new material technology called Aluminum Titanate called Duratrap AT and we successfully entered that market with the largest passenger car diesel manufacturer, Volkswagen. And we expect to expand that position in the coming year. So, we feel good about where we are in heavy-duty, light-duty we're just getting started but that was our plan. So, overall, we are pleased. Following this, we'll be off-road heavy-duty, which becomes regulated in the 2010-2011 timeframe and we're already beginning development of products for that as well. Q - Curt Woodworth: One question on Telecom. Given that a lot of the Verizon inventories situation has been alleviated, we were surprised that the Telecom revenues would be flat. Is there anything different you are seeing in the connectivity rates at Verizon or in the fiber deployment that would maybe get more conservatism to that market in '06? A - Wendell Weeks: No. I'm not seeing anything significant that would lead us to conclude anything different about the rates at Verizon building through the year. The quarter one, when you get into any given quarter, you just tend to have a little bit more noise level that actually are some new product introductions from us and how quickly those get accepted can impact you in a quarter, rather all those different things can. But overall, if anything we feel a little better about Verizon's dedication to fiber-to-the-premise this year at this point in time, than we were last year. So, overall, we think the trend is positive in fiber-to-the-premise. For the overall telecom industry though, note that supply of fiber still exceeds demand and in a way we have sort of the exciting things happening in fiber-to-the-premise and our new products that is getting squeezed to some extent by what still continues to be a pretty unexciting industry structure. Q - Curt Woodworth: Okay. And what were your fiber-to-the-premise revenues for the total Company in '05? A - Jim Flaws: They were around 235 million.

Our next question comes from the line of Ari Bensinger with Standard & Poor's. Q - Ari Bensinger: I was just wondering. Building off that question, going forward, with Verizon's ramp going from one million homes passed to three million homes passed, can you disclose your revenue opportunity in terms of how much you would get in terms of equipment for each home passed? A - Wendell Weeks: Yes and we will provide a little, once again, a little more color as well on February 3rd. But, roughly, the way we think about it is, it is between sort of $80 and $100 for home passed and a similar amount for home connected. So, remember, you've got both revenue patterns. First, you've got to pass it and then when actually they turn up to the service to the home, we create yet another revenue opportunity of approximately the same size. So, that actually adds to the sustainability of this business for us as we go forward.

Our next question comes from the line of Brent Thompson with Goldman. Q - Brent Thompson: I was wondering if you could give us any color as to what things might impact your ability to move down the cost curve at a rate that's different than what you have been doing in the past or should we be assuming that that's a pretty constant factor from '05 into 06? A - Jim Flaws: Well, as we've said many times, history is not a guarantee of the future. But as we showed you last year from '97 to 2004 we reduced costs on a CAGR of 13% and, clearly, we were doing very well in recent years. We don't feel there are many things that would cause us to do less well and in most of our capacities this upcoming year is coming up in Taiwan. And that's a real benefit to us. We have a little coming up in Japan. But, even in Japan, we have achieved superior cost positions over the past year. We continue to have ideas about how we could improve yields and flow rates of glass coming out of the tanks. So I think that we believe we have an excellent shot of continuing the rates we had but we can't guarantee them. Q - Brent Thompson: When you think about longer-term in terms of peak margins for this business, could you give a little color as to what that range might be or how we might ultimately get there timing-wise? A - Jim Flaws: I would have to say, we are pretty happy with gross margins in the upper 60s and 70s at our equity ventures and margins don't generally grow to the sky. So we'd be very happy with margins like this in a business that grows at this rate. A - Wendell Weeks: And all I would add is that, once again maybe a paid advertisements in the February 3rd session is our Chief Operating Officer, Peter Volanakis, is really going to spend the bulk of his time addressing trends in the overall market. What different factors we are weighing as we think about what's happening on pricing and also I think very importantly, right on your point, which is the main factors that are going to drive our cost reduction effort, both historically and going forward. And I think everyone will find that to be very informative. Ken Sofio, Director, Investor Relations: Lisa, we have time for one more question.

Our last question comes from the line of Ajit Pai with Thomas Weisel Partners. Q - Ajit Pai: On the Shizouka plant extension for Gen-8 and higher, could you give us some color as to when you expect that to begin production? I think you mentioned something about the third quarter and fourth quarter being the Gen-8 ramp. But, you know the typical season when you see a lot of strength is the second quarter. So, would you be able to be producing them in the second quarter? A - Jim Flaws: Well we'll definitely be producing them in the second quarter. The point is, there won't be a lot of glass being taken as they begin their ramp. But we'll definitely be ready to go in the second quarter. And we will be prepared to keep up with our customer there as they go forward. But, we'll be ready to go then. Q - Ajit Pai: And typically, in Gen-8, the kind of premium you've had like when you go to the next generation has been in the double digits, relative to the prior generation. Is that pattern changing? Or do you think you'll still be able to command a pretty generous premium for the next generation glass? A - Jim Flaws: There's no change in our ability to get a premium for new generations that when they come out versus older generations with that customer. Ken Sofio, Director, Investor Relations: Jim, some closing comments? Jim Flaws, Vice-Chairman, Chief Financial Officer: I would like to make a few remarks. First of all, as you heard today, we have some Investor Relations announcements. We will be holding our annual investor meeting on Friday, February 3rd at the Mandarin Oriental Hotel in New York City. There will be presentations from various members of senior management, plus the opportunity to speak to many of the general managers from our major businesses. Anyone interested in attending should register online at the IR web site, at Corning.com. We hope to see you there. In addition, we will be meeting with some investors in Houston and Dallas on February 6th and 7th. Now a couple of closing comments about 2005. It would be an understatement to say we could not have been more pleased with the Company's performance over the past year. It's clearly one of the best years in our history and that's saying a lot for a company that is 154 years old. We grew our sales 16% year-over-year and, more importantly, we improved our gross margin to an all-time record of 42% for the full year. Our net profit after-taxes before Special Items increased by 629 million or 93%. This represented the third consecutive year of 500 million plus improvement in MPAT. More importantly, we saw substantial improvement in our free cash flow. Despite the significant amount of spending on capital expenditures and R&D, our balance sheet improved dramatically as we reduced debt to a very manageable level, while maintaining 2.4 billion in cash. The improvement in our balance sheet was noteworthy for another reason. We had more cash than debt for the first time in 25 years. And as a result, for a stronger balance sheet, we made our way back to investment grade. Our financial performance was driven by another record year for LCD glass. We grew our revenues by 57%, our segment income by 66%. Demand was fueled by consumer acceptance of LCD televisions whose penetration into the color TV market more than doubled. And we are very excited about prospective growth for the LCD television business in 2006. In our Telecommunications segment, we are very pleased Verizon met their planned goal, passing two million homes in 2005. We're looking forward to additional revenue opportunities for fiber-to-the-premise products in support of Verizon's gold to pass three million homes in '06. In Environmental, our diesel products took a big step forward in '05, both technically and commercially. We've signed letters of intent for over half the heavy-duty diesel market in the U.S. and developed a new diesel filter. We're looking forward to increase diesel products sales as heavy-duty engine manufacturers begin to ramp in preparation for the '07 regulations. In addition to these financial performance, we are thrilled to have a very successful year introducing innovative new products such as Gen-7, 7.5 glass, new fiber-to-the-premise technology and the aluminum titanate filter. I think you'll agree, this past year was extremely gratifying for our investors as well as our share price rose 67%, making it the 10th best performing stock on S&P 500. In closing, we would like to thank the investment community for their continuing interest in Corning. We're very much looking forward to meeting with you as we hit the road again in 2006. Ken. Ken Sofio, Director, Investor Relations: Thank you, Jim; thank you, Wendell, thank you all for joining us this morning. A playback of the call will be available beginning at 10:30 AM Eastern time today and will run until 5 PM Eastern time on February 8th. To listen, dial 402-220-9657. No passwords required. The audio cast is also available on our web site during that time period. Lisa, that concludes our call, please disconnect all lines.

Thank you. This concludes today's teleconference. At this time, you may disconnect. Thank you for your participation.