JAMES R. HOUGHTON Chairman & Chief Executive Officer To Our Shareholders: The past year has brought  a turning point in the history  of Corning Incorporated —  the year in which I believe  we have truly proven our  ability to transform, to achieve our goals, and to position our- selves for future growth while staying committed to our Values as a company. In this report, I’d like to review with you the significant progress we’ve continued to make against the priorities  we set for ourselves in early 2002 — when the downturn  in the telecommunications industry left us with a severe drop-off in revenues and an overbuilt infrastructure. In the face of this situation, we set a very clear plan based on three  priorities: These priorities have guided our steady march forward  for the past two years. And  the plan is working. I take tremendous pride in sharing with you that Corning Incorporated continues to be  a financially sound company. We are profitable once again, excluding special items, and our investments in our future have positioned us for growth in key markets. Now let’s look at each of our priorities in greater detail — including the progress we’ve made and the goals we intend to reach as we keep moving ahead. ■ Preserving the financial  health of the company ■ Returning to profitability ■ Continuing to invest in  our future