CORNING, N.Y., April 8 -- Corning Inc. said it will charge $200 million against its earnings in the first quarter to settle asbestos claims.
The after-tax charge would cover all asbestos claims now and in the future arising from Pittsburgh Corning's products or operations, the company said.
Over the last 30 years, some 200,000 claims have been filed against Pittsburgh Corning Corp. (PCC), an insulation products maker jointly owned by Corning and PPG Industries Inc., the Associated Press reported Monday.
James B. Flaws, Corning's vice chairman and CFO, said in a statement, "While we believe we have strong legal defenses to any claims of direct liability from asbestos products, it is important to bring this matter to closure and eliminate uncertainty going forward."
Corning said the agreement is expected to be incorporated into a settlement fund as part of a reorganization plan for PCC. The agreement is subject to the approval of a federal bankruptcy court in Pittsburgh.
Corning's settlement will require the contribution, when the plan becomes effective, of Corning's equity interest in PCC, its one-half equity interest in Pittsburgh Corning Europe N.V., a Belgian corporation, and 25 million shares of Corning common stock. Corning also will be making cash payments worth $130 million over six years beginning in June 2005. In addition, Corning will assign insurance policy proceeds from its primary insurance and a portion of its excess insurance as part of the settlement. The agreement will result in a pre-tax charge of approximately $300 million ($200 million after tax).
For more information, visit: www.corning.com