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Income tax (provision) benefit reflects a tax rate of 21%. Denominational currencies for other average rate forward contracts include the Mexican Peso and euro. Japanese yen-denominated option contracts include purchased put options and zero-cost collars. With respect to the zero-cost collars, the gross notional amount includes the value of the put and call options. However, due to the nature of the zero-cost collars, only the put or the call option can be exercised at maturity. Research, development and engineering expenses include direct project spending that is identifiable to a segment. Amount does not include research, development and engineering expense related to severance charges. Treasury stock includes the deemed surrender to the Company of common stock to satisfy employee tax withholding obligations. As of June 30, 2024 and December 31, 2023, derivatives designated as hedging instruments include foreign exchange cash flow hedges with total notional amounts of $236 million and $241 million, respectively, and fair value hedges of leased precious metals with total notional amounts of 13,762 troy ounces and 20,160 troy ounces, respectively. Fair value assets include designated derivatives pertaining to precious metals lease contracts in the amounts of $146 million and $229 million as of June 30, 2024 and December 31, 2023, respectively. The amounts above do not include €850 million of euro-denominated debt ($903 million equivalent as of June 30, 2024), which is a non-derivative financial instrument designated as a net investment hedge. 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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

☒

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended June 30, 2024

 

OR

 

☐

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from  

 

To  

  

 

Commission file number: 1-3247

 

CORNING INCORPORATED

(Exact name of registrant as specified in its charter)

 

 

New York

 

16-0393470

 
 

(State or other jurisdiction of incorporation or organization)

 

(I.R.S. Employer Identification No.)

 
     
 

One Riverfront Plaza, Corning, New York

 

14831

 
 

(Address of principal executive offices)

 

(Zip Code)

 

 

607-974-9000

(Registrant’s telephone number, including area code)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading Symbol(s)

 

Name of each exchange on which registered

Common Stock, $0.50 par value per share

 

GLW

 

New York Stock Exchange

3.875% Notes due 2026 GLW26 New York Stock Exchange
4.125% Notes due 2031 GLW31 New York Stock Exchange

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.

 

 

Yes

☒

 

No

☐

 

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

 

 

Yes

☒ 

No

☐

 

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large Accelerated Filer

☒ 

Accelerated Filer

☐

 
 

Non-Accelerated Filer

☐

 

Smaller Reporting Company

☐

 
    

Emerging Growth Company

☐

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards pursuant to Section 13(a) of the Exchange Act.        ☐

 

If securities are registered pursuant to Section 12(b) of the Exchange Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.        ☐

 

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b).        ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

 

 

Yes

☐

 

No

☒ 

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

 

 

Class

 

Outstanding as of July 25, 2024

 
 

Corning’s Common Stock, $0.50 par value per share

 

855,700,821 shares

 

 

1
Table of Contents

 

 

 

 

INDEX

 

PART I – FINANCIAL INFORMATION
 

Page

Item 1. Financial Statements

  
   

Consolidated Statements of Income

3
   

Consolidated Statements of Comprehensive (Loss) Income

4
   

Consolidated Balance Sheets

5
   

Consolidated Statements of Cash Flows

6
   

Consolidated Statements of Changes in Shareholders’ Equity

7
   

Notes to Consolidated Financial Statements

8
   

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

22
   

Item 3. Quantitative and Qualitative Disclosures About Market Risk

40
   

Item 4. Controls and Procedures

40
   

PART II – OTHER INFORMATION

  
   

Item 1. Legal Proceedings

41
   

Item 1A. Risk Factors

41
   

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

42
   
Item 5. Other Information 42
   

Item 6. Exhibits

43
   

Signatures

44

 

2
Table of Contents

 

 

Consolidated Statements of Income Corning Incorporated and Subsidiary Companies
(Unaudited; in millions, except per share amounts)  

 

  

Three months ended

  

Six months ended

 
  

June 30,

  

June 30,

 
  

2024

  

2023

  

2024

  

2023

 

Net sales

 $3,251  $3,243  $6,226  $6,421 

Cost of sales

  2,302   2,230   4,284   4,405 
                 

Gross margin

  949   1,013   1,942   2,016 
                 

Operating expenses:

                

Selling, general and administrative expenses

  471   440   922   861 

Research, development and engineering expenses

  262   263   520   517 

Amortization of purchased intangibles

  30   31   60   62 
                 

Operating income

  186   279   440   576 
                 

Interest income

  10   8   22   15 

Interest expense

  (84)  (81)  (167)  (157)

Translated earnings contract gain, net (Note 12)

  27   116   66   108 

Other income, net

  33   87   107   95 
                 

Income before income taxes

  172   409   468   637 

Provision for income taxes (Note 4)

  (50)  (106)  (121)  (143)
                 

Net income

  122   303   347   494 
                 

Net income attributable to non-controlling interest

  (18)  (22)  (34)  (37)
                 

Net income attributable to Corning Incorporated

 $104  $281  $313  $457 
                 

Earnings per common share available to common shareholders:

                

Basic (Note 5)

 $0.12  $0.33  $0.37  $0.54 

Diluted (Note 5)

 $0.12  $0.33  $0.36  $0.53 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

‎

3
Table of Contents
 

 

Consolidated Statements of Comprehensive (Loss) Income Corning Incorporated and Subsidiary Companies
(Unaudited; in millions)  

 

   

Three months ended

    

Six months ended

  
   

June 30,

    

June 30,

  
   

2024

    

2023

    

2024

    

2023

  

Net income

   $ 122     $ 303     $ 347     $ 494  
                                 

Foreign currency translation adjustments and other

     (222 )     (318 )     (552 )     (402 )

Unamortized gain (losses) and prior service costs for postretirement benefit plans

     37       (4 )     39       (8 )

Realized and unrealized (losses) gains on derivatives

     (32 )     20       (31 )     41  

Other comprehensive loss, net of tax

     (217 )     (302 )     (544 )     (369 )
                                 

Comprehensive (loss) income

     (95 )     1       (197 )     125  
                                 

Comprehensive income attributable to non-controlling interest

     (18 )     (22 )     (34 )     (37 )
                                 

Comprehensive (loss) income attributable to Corning Incorporated

   $ (113 )   $ (21 )   $ (231 )   $ 88  

 

The accompanying notes are an integral part of these consolidated financial statements.

 

4
Table of Contents
 

 

Consolidated Balance Sheets Corning Incorporated and Subsidiary Companies
(Unaudited; in millions, except share and per share amounts)  

 

  

June 30,

  

December 31,

 
  2024  2023 

Assets

        
         

Current assets:

        

Cash and cash equivalents

 $1,419  $1,779 

Trade accounts receivable, net of doubtful accounts - $31 and $30

  1,721   1,572 

Inventories (Note 6)

  2,682   2,666 

Other current assets

  1,299   1,195 

Total current assets

  7,121   7,212 
         

Property, plant and equipment, net of accumulated depreciation - $14,562 and $14,553

  13,742   14,630 

Goodwill

  2,365   2,380 

Other intangible assets, net

  836   905 

Deferred income taxes (Note 4)

  1,134   1,153 

Other assets

  1,981   2,220 
         

Total Assets

 $27,179  $28,500 
         

Liabilities and Equity

        
         

Current liabilities:

        

Current portion of long-term debt and short-term borrowings

 $376  $320 

Accounts payable

  1,466   1,466 

Other accrued liabilities (Notes 7 and 11)

  2,684   2,533 

Total current liabilities

  4,526   4,319 
         

Long-term debt (Note 8)

  6,908   7,206 

Postretirement benefits other than pensions (Note 9)

  360   398 

Other liabilities (Notes 7 and 11)

  4,458   4,709 

Total liabilities

  16,252   16,632 
         

Commitments and contingencies (Note 11)

          

Shareholders’ equity (Note 13):

        

Common stock – Par value $0.50 per share; Shares authorized 3.8 billion; Shares issued: 1.8 billion and 1.8 billion

  919   916 

Additional paid-in capital – common stock

  17,081   16,929 

Retained earnings

  15,976   16,391 

Treasury stock, at cost; Shares held: 985 million and 980 million

  (20,799)  (20,637)

Accumulated other comprehensive loss

  (2,592)  (2,048)

Total Corning Incorporated shareholders’ equity

  10,585   11,551 

Non-controlling interest

  342   317 

Total equity

  10,927   11,868 
         

Total Liabilities and Equity

 $27,179  $28,500 

 

The accompanying notes are an integral part of these consolidated financial statements. 

 

5
Table of Contents
 

 

Consolidated Statements of Cash Flows Corning Incorporated and Subsidiary Companies
(Unaudited; in millions)  

 

   

Six months ended

  
   

June 30,

  
   

2024

    

2023

  

Cash Flows from Operating Activities:

                

Net income

   $ 347     $ 494  

Adjustments to reconcile net income to net cash provided by operating activities:

                

Depreciation

     614       622  

Amortization of purchased intangibles

     60       62  

Loss on disposal of assets, net

     126       23  

Share-based compensation expense

     126       111  

Translation gain on Japanese yen-denominated debt

     (135 )     (127 )

Deferred tax provision (benefit)

     1       (10 )

Translated earnings contract gain, net

     (66 )     (108 )

Tax deposit refund

           99  

Changes in assets and liabilities:

                

Trade accounts receivable

     (284 )     (64 )

Inventories

     (89 )     58  

Other current assets

     (16 )     (49 )

Accounts payable and other current liabilities

     (52 )     (416 )

Customer deposits and government incentives

     (18 )     (6 )

Deferred income

     (70 )     (24 )

Other, net

     73       (95 )

Net cash provided by operating activities

     617       570  
                 

Cash Flows from Investing Activities:

                

Capital expenditures

     (494 )     (770 )

Proceeds from sale of equipment to related party

           67  

Realized gains on translated earnings contracts and other

     168       177  

Other, net

     (12 )     11  

Net cash used in investing activities

     (338 )     (515 )
                 

Cash Flows from Financing Activities:

                

Repayments of debt

     (42 )     (73 )

Proceeds from issuance of debt

           20  

Proceeds from issuance of euro bonds

           918  

Proceeds from other financing arrangements

           54  

Proceeds from cross currency swap

     68        

Payment for redemption of preferred stock

           (507 )

Payments of employee withholding tax on stock awards

     (58 )     (99 )

Proceeds from exercise of stock options

     34       35  

Purchases of common stock for treasury

     (105 )      

Dividends paid

     (495 )     (495 )

Other, net

     (14 )     (17 )

Net cash used in financing activities

     (612 )     (164 )

Effect of exchange rates on cash

     (27 )     (24 )

Net decrease in cash and cash equivalents

     (360 )     (133 )

Cash and cash equivalents at beginning of period

     1,779       1,671  

Cash and cash equivalents at end of period

   $ 1,419     $ 1,538  

 

The accompanying notes are an integral part of these consolidated financial statements. 

 

6
Table of Contents
 

 

Consolidated Statements of Changes in Shareholders’ Equity Corning Incorporated and Subsidiary Companies
(Unaudited; in millions, except per share amounts)  

 

  

Common stock

  

Additional paid-in capital common

  

Retained earnings

  

Treasury stock

  

Accumulated other comprehensive loss

  

Total Corning Incorporated shareholders' equity

  

Non-controlling interest

  

Total

 

Balance as of December 31, 2023

 $916  $16,929  $16,391  $(20,637) $(2,048) $11,551  $317  $11,868 

Net income

          209           209   16   225 

Other comprehensive loss

                  (327)  (327)  (1)  (328)

Shares issued to benefit plans and for option exercises

  1   69               70       70 

Common dividends ($0.28 per share)

          (242)          (242)      (242)

Other, net (1)

              (35)      (35)  1   (34)

Balance as of March 31, 2024

 $917  $16,998  $16,358  $(20,672) $(2,375) $11,226  $333  $11,559 

Net income

          104           104   18   122 

Other comprehensive loss

                  (217)  (217)      (217)

Purchase of common stock for treasury

              (103)      (103)      (103)

Shares issued to benefit plans and for option exercises

  2   83               85       85 

Common dividends ($0.56 per share)

          (486)          (486)      (486)

Other, net (1)

              (24)      (24)  (9)  (33)

Balance as of June 30, 2024

 $919  $17,081  $15,976  $(20,799) $(2,592) $10,585  $342  $10,927 

 

  

Common stock

  

Additional paid-in capital common

  

Retained earnings

  

Treasury stock

  

Accumulated other comprehensive loss

  

Total Corning Incorporated shareholders' equity

  

Non-controlling interest

  

Total

 

Balance as of December 31, 2022

 $910  $16,682  $16,778  $(20,532) $(1,830) $12,008  $267  $12,275 

Net income

          176           176   15   191 

Other comprehensive loss

                  (67)  (67)      (67)

Shares issued to benefit plans and for option exercises

  1   64               65       65 

Common dividends ($0.28 per share)

          (241)          (241)      (241)

Other, net (1)

              (16)      (16)      (16)

Balance as of March 31, 2023

 $911  $16,746  $16,713  $(20,548) $(1,897) $11,925  $282  $12,207 

Net income

        281         281   22   303 

Other comprehensive loss

              (302)  (302)  (1)  (303)

Shares issued to benefit plans and for option exercises

  4   71            75      75 

Common dividends ($0.56 per share)

        (485)        (485)     (485)

Other, net (1)

           (82)     (82)  (5)  (87)

Balance as of June 30, 2023

 $915  $16,817  $16,509  $(20,630) $(2,199) $11,412  $298  $11,710 

 

(1) Treasury stock includes the deemed surrender to the Company of common stock to satisfy employee tax withholding obligations.

 

The accompanying notes are an integral part of these consolidated financial statements. 

 

7
Table of Contents

 

CORNING INCORPORATED AND SUBSIDIARY COMPANIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

 

1. Summary of Significant Accounting Policies

 

Basis of Presentation and Principles of Consolidation

 

In these notes, the terms “Corning,” “Company,” “we,” “us,” or “our” mean Corning Incorporated and its subsidiary companies.

 

The consolidated financial statements include the consolidated accounts of Corning Incorporated and its subsidiaries consolidated in conformity with accounting principles generally accepted in the United States of America (“GAAP”). In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments, which include normal recurring adjustments, necessary to state fairly the financial position, results of operations and cash flows for the periods presented. All intercompany accounts, transactions and profits have been eliminated. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been omitted pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”). These consolidated financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 (“2023 Form 10-K”). The results of operations for the interim periods are not necessarily indicative of results which may be expected for any other interim period or for the full year.

 

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses and the disclosure of contingent assets and liabilities in the consolidated financial statements and related notes. Significant estimates and assumptions in these consolidated financial statements require the exercise of judgment. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may be different from these estimates. 

 

The non-controlling interest as recorded in the consolidated financial statements represents amounts attributable to the minority shareholders of Hemlock Semiconductor Group (“HSG”) and other less-than-wholly-owned consolidated subsidiaries.

 

Certain prior year amounts have been reclassified to conform to the current year presentation. These reclassifications had no material impact on the results of operations, financial position or changes in shareholders’ equity.

 
 

2. Restructuring, Impairment and Other Charges and Credits

 

During the three and six months ended June 30, 2024, we recorded $138 million and $129 million, respectively, in restructuring, impairment and other charges and credits, of which $141 million and $121 million, respectively, were reflected in cost of sales in the consolidated statements of income, primarily relating to asset write-offs in Q2 associated with the closure of a display manufacturing plant. Should the entity be substantially liquidated, the Company expects to recognize approximately $72 million of non-cash foreign currency translation losses.

 

There were no material restructuring, impairment and other charges and credits for the three and six months ended June 30, 2023.

 

8
Table of Contents
 
 

3. Revenue

 

Disaggregated Revenue

 

The following table presents revenues by product category (in millions):

 

  

Three months ended

  

Six months ended

 
  

June 30,

  

June 30,

 
  

2024

  

2023

  

2024

  

2023

 

Telecommunication products

 $1,113  $1,066  $2,043  $2,191 

Display products

  704   725   1,336   1,334 

Specialty glass products

  497   420   947   824 

Environmental substrate and filter products

  404   433   831   840 

Life science products

  237   222   462   469 

Polycrystalline silicon products

  199   258   415   535 

All other products

  97   119   192   228 

Total revenue

 $3,251  $3,243  $6,226  $6,421 

 

Customer Deposits

 

As of June 30, 2024 and December 31, 2023, Corning had customer deposits of approximately $1.2 billion. Most of these customer deposits were non-refundable and allowed customers to secure rights to products produced by Corning under long-term supply agreements, generally over a period of up to ten years. As products are delivered to customers, Corning will recognize revenue and reduce the amount of the customer deposit liability.

 

For the three months ended  June 30, 2024 and 2023, customer deposits recognized were $11 million and $12 million, respectively. For the six months ended  June 30, 2024 and 2023, customer deposits recognized were $91 million and $82 million, respectively.

 

Refer to Note 7 (Other Liabilities) for additional information. 

 

Deferred Revenue

 

As of June 30, 2024 and December 31, 2023, Corning had deferred revenue of approximately $790 million and $860 million, respectively. Deferred revenue was primarily related to the performance obligations of non-refundable consideration previously received by HSG from its customers under long-term supply agreements.  

 

Deferred revenue is tracked on a per-customer contract-unit basis. As customers take delivery of the committed volumes under the terms of the contract, a per-unit amount of deferred revenue is recognized when control of the promised goods is transferred to the customer based upon the units delivered compared to the remaining contractual units. For the three and six months ended  June 30, 2024 and 2023, the amount of deferred revenue recognized in the consolidated statements of income was not material.

 

Refer to Note 7 (Other Liabilities) for additional information.  

 

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4. Income Taxes

 

The following table presents the provision for income taxes and the related effective tax rate (in millions, except percentages):

 

  

Three months ended

  

Six months ended

 
  

June 30,

  

June 30,

 
  

2024

  

2023

  

2024

  

2023

 

Provision for income taxes

 $(50) $(106) $(121) $(143)

Effective tax rate

  29.1%  25.9%  25.9%  22.4%

 

For the three and six months ended  June 30, 2024, the effective tax rate differed from the United States (“U.S.”) statutory rate of 21%, primarily due to certain pre-tax losses with no corresponding expected tax benefit. These losses were mostly driven by asset write-offs associated with the closure of a display manufacturing plant. Refer to Note 2 (Restructuring, Impairment and Other Charges and Credits) for additional information. 

 

For the three and six months ended  June 30, 2023, the effective tax rate differed from the U.S. statutory rate of 21%, primarily due to changes in valuation allowance assessments, partially offset by differences arising from foreign earnings, adjustments to share-based compensation, and a net benefit due to foreign derived intangible income.

 

Corning Precision Materials, a South Korean subsidiary, is currently appealing certain tax assessments and tax refund claims for tax years 2010 through 2019. The Company was required to deposit the disputed tax amounts with the South Korean government as a condition of its appeal of any tax assessment. During the second quarter of 2023, $99 million was no longer under dispute and was refunded to the Company. The non-current receivable balance was $256 million and $261 million as of  June 30, 2024 and  December 31, 2023, respectively, for the amount on deposit with the South Korean government. Corning believes that it is more likely than not the Company will prevail in the appeals process relating to these matters.
 
 

5. Earnings Per Common Share

 

The following table presents the reconciliation of the amounts used to compute basic and diluted earnings per common share (in millions, except per share amounts):

 

  

Three months ended

  

Six months ended

 
  

June 30,

  

June 30,

 
  

2024

  

2023

  

2024

  

2023

 

Net income attributable to Corning Incorporated

 $104  $281  $313  $457 
                 

Weighted-average common shares outstanding – basic

  853   848   853   846 

Effect of dilutive securities:

                

Stock options and other awards

  11   11   12   13 

Weighted-average common shares outstanding – diluted

  864   859   865   859 

Basic earnings per common share

 $0.12  $0.33  $0.37  $0.54 

Diluted earnings per common share

 $0.12  $0.33  $0.36  $0.53 
                 

Anti-dilutive potential shares excluded from diluted earnings per common share:

                

Stock options and other awards

  3   3   4   3 

 

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6. Inventories

 

Inventories consisted of the following (in millions):

 

  

June 30,

  

December 31,

 
  

2024

  

2023

 

Finished goods

 $1,303  $1,242 

Work in process

  546   551 

Raw materials and accessories

  426   445 

Supplies and packing materials

  407   428 

Inventories

 $2,682  $2,666 

 
 

7. Other Liabilities

 

Other liabilities consisted of the following (in millions):

 

  

June 30,

  

December 31,

 
  

2024

  

2023

 

Current liabilities:

        

Wages and employee benefits

 $569  $609 

Income taxes

  67   69 

Derivative instruments (Note 12)

  179   66 

Dividend payable (Note 13)

  261   21 

Deferred revenue (Note 3)

  193   181 

Customer deposits (Note 3)

  178   148 

Short-term operating leases

  92   112 

Other current liabilities

  1,145   1,327 

Other accrued liabilities

 $2,684  $2,533 
         

Non-current liabilities:

        

Defined benefit pension plan liabilities

 $724  $721 

Derivative instruments (Note 12)

  156   31 

Deferred revenue (Note 3)

  597   679 

Customer deposits (Note 3)

  986   1,083 

Deferred tax liabilities

  167   218 

Long-term operating leases

  821   846 

Other non-current liabilities

  1,007   1,131 

Other liabilities

 $4,458  $4,709 

 
 

8. Debt

 

Based on borrowing rates currently available to us for loans with similar terms and maturities, the fair value of long-term debt was $6.5 billion and $7.0 billion as of  June 30, 2024 and December 31, 2023, respectively, compared to the carrying value of $6.9 billion and $7.2 billion as of  June 30, 2024 and December 31, 2023, respectively. The Company measures the fair value of its long-term debt using Level 2 inputs based primarily on current market yields for its existing debt traded in the secondary market.

 

In Q2 2024, the Company entered into a ¥23 billion, or $215 million, fixed rate, three-year cross currency swap contract to economically lock in unrealized foreign exchange gains relating to a portion of the Company’s Japanese yen-denominated debt due in 2027. Refer to Note 12 (Financial Instruments) for additional information.

 

On May 15, 2023, the Company issued €300 million 3.875% Notes due 2026 (“2026 Notes”) and €550 million 4.125% Notes due 2031 (“2031 Notes”). The proceeds from the 2026 Notes and 2031 Notes were received in euros and converted to U.S. dollars on the date of issuance. The net proceeds received were approximately $918 million and will be used for general corporate purposes. As of June 30, 2024, the U.S. dollar equivalent carrying value of the euro-denominated long-term debt was $903 million. The full amounts of the 2026 Notes and 2031 Notes have been designated as net investment hedges against our investments in certain European subsidiaries with euro functional currencies. Refer to Note 12 (Financial Instruments) for additional information.

 

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9. Employee Retirement Plans

 

The following table presents the components of net periodic pension and postretirement benefit expense (income) for employee retirement plans, which other than the service cost component is recorded in other income, net in the consolidated statements of income (in millions):

 

  

Pension benefits

  

Postretirement benefits

 
  

Three months ended

  

Six months ended

  

Three months ended

  

Six months ended

 
  

June 30,

  

June 30,

  

June 30,

  

June 30,

 
  

2024

  

2023

  

2024

  

2023

  

2024

  

2023

  

2024

  

2023

 

Service cost

 $25  $27  $48  $50  $1  $2  $2  $3 

Interest cost

  46   43   92   88   5   5   10   11 

Expected return on plan assets

  (48)  (46)  (96)  (92)                

Amortization of actuarial net gain

                  (7)  (6)  (12)  (11)

Amortization of prior service cost (credit)

  2   1   3   3   (2)  (1)  (4)  (2)

Special termination benefit charge

  3   5   3   5                 

Total pension and postretirement benefit expense (income)

 $28  $30  $50  $54  $(3) $—  $(4) $1 

 
 

10. Leases

 

On March 12, 2024, Corning entered into a synthetic lease (“Facility Lease”) for a solar manufacturing facility in Hemlock, Michigan (the “Facility”), for which the Company is the construction agent on behalf of the lessor, with an estimated construction cost of approximately $835 million.

 

The Facility Lease will commence upon completion of construction of the Facility, which is expected to be in the later part of 2025, and has a lease term of five years with options to renew the lease or purchase the facility. The Facility Lease is expected to be classified as a finance lease and the amount of right-of-use asset and lease liability will be determined and recorded upon lease commencement. The estimated undiscounted lease payments, inclusive of a residual value guarantee, are approximately $1.1 billion, of which $35 million, $103 million, $99 million and $96 million is to be paid in 2025, 2026, 2027 and 2028, respectively, and $780 million is to be paid thereafter. 

 

In conjunction with the Facility Lease, Corning entered into an equipment lease (“Equipment Lease”) on June 17, 2024, with an estimated purchase and installation cost of $365 million, for the equipment to be installed and operated within the Facility. The Company is the procurement and installation agent on behalf of the lessor.

 

The Equipment Lease will commence upon completion of the equipment installation, which is expected to be in the later part of 2025, and has a lease term of five years with obligations to purchase the equipment at lease maturity. The Equipment Lease is expected to be classified as a finance lease and the amount of right-of-use asset and lease liability will be determined and recorded upon lease commencement. The estimated undiscounted lease payments are approximately $446 million, of which $25 million, $100 million, $95 million and $89 million is to be paid in 2025, 2026, 2027 and 2028, respectively, and $137 million is to be paid thereafter.

 

The transaction agreements for both the Facility Lease and Equipment Lease contain covenants that are consistent with our Revolving Credit Agreement as disclosed in the 2023 Form 10-K.

 

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11. Commitments and Contingencies

 

Corning is a defendant in various lawsuits and is subject to various claims that arise in the normal course of business, the most significant of which are summarized below. In the opinion of management, the likelihood that the ultimate disposition of these matters will have a material adverse effect on Corning’s consolidated financial position, liquidity or results of operations, is remote.

 

Dow Corning Chapter 11 Related Matters

 

Until June 1, 2016, Corning and The Dow Chemical Company (“Dow”) each owned 50% of the common stock of Dow Corning Corporation (“Dow Corning”). On May 31, 2016, Corning and Dow realigned their ownership interest in Dow Corning. Following the realignment, Corning no longer owned any interest in Dow Corning. With the realignment, Corning agreed to indemnify Dow for 50% of Dow Corning’s non-ordinary course, pre-closing liabilities to the extent such liabilities exceed the amounts reserved for them by Dow Corning as of May 31, 2016, subject to certain conditions and limits. In January 2024, we entered into an agreement to settle the Dow Corning Chapter 11 Related Matters and the settlement amount was not material.

 

Dow Corning Environmental Claims

 

Beginning in September 2019, Dow formally notified Corning of certain environmental matters for which Dow asserts that it has or will experience losses arising from remediation and response at a number of sites. Subject to certain conditions and limits, Corning may be required to indemnify Dow for up to 50% of such losses. As of June 30, 2024, Corning has determined a potential liability for these environmental matters is probable and the amount reserved was not material.

 

Environmental Litigation

 

Corning has been designated by federal or state governments under environmental laws, including Superfund, as a potentially responsible party that may be liable for cleanup costs associated with 19 hazardous waste sites. It is Corning’s policy to accrue for its estimated liability related to such hazardous waste sites and other environmental liabilities related to property owned by Corning based on expert analysis and continual monitoring by both internal and external consultants. As of  June 30, 2024 and December 31, 2023, Corning had accrued approximately $83 million and $88 million, respectively, for the estimated undiscounted liability for environmental cleanup and related litigation. Based upon the information developed to date, management believes that the accrued reserve is a reasonable estimate of the Company’s liability.

 

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12. Financial Instruments

 

The following table summarizes the notional amounts and respective fair values of Corning’s derivative financial instruments on a gross basis (in millions):

 

  

June 30, 2024

  

December 31, 2023

 
  

Notional amount

  

Fair value asset (1)

  

Fair value liability (1)

  

Notional amount

  

Fair value asset (1)

  

Fair value liability (1)

 

Derivatives designated as hedging
  instruments (2):

                        

Foreign exchange and precious
  metals lease contracts (3)

 $721  $179  $(19) $241  $287     
                         

Derivatives not designated as hedging
    instruments:

                        

Foreign exchange contracts

  1,964   22   (34)  1,988   20  $(17)

Translated earnings contracts

  5,437   406   (207)  5,042   324   (80)

Cross currency swap contracts

  215       (75)            

Total derivatives

 $8,337  $607  $(335) $7,271  $631  $(97)
                         

Current

     $520  $(179)     $501  $(66)

Non-current

      87   (156)      130   (31)

Total derivatives

     $607  $(335)     $631  $(97)

 

(1)All of the Company’s derivative contracts are measured at fair value and are classified as Level 2 within the fair value hierarchy. Derivative assets are presented in Other current assets or Other assets. Derivative liabilities are presented in Other current liabilities or Other liabilities.
(2)The amounts above do not include €850 million of euro-denominated debt ($903 million carrying value as of June 30, 2024), which is a non-derivative financial instrument designated as a net investment hedge.
(3)As of  June 30, 2024 and December 31, 2023, derivatives designated as hedging instruments include foreign exchange cash flow hedges with total notional amounts of $721 million and $241 million, respectively, and fair value hedges of leased precious metals with total notional amounts of 13,762 troy ounces and 20,160 troy ounces, respectively. Fair value assets include designated derivatives pertaining to precious metals lease contracts in the amounts of $146 million and $229 million as of  June 30, 2024 and December 31, 2023, respectively.

 

The following table summarizes the total gross notional values for translated earnings contracts (in millions):

 

  

June 30,

  

December 31,

 
  

2024

  

2023

 

Average rate forward contracts:

        

Chinese yuan-denominated

 $748  $684 

Japanese yen-denominated

  358   463 

South Korean won-denominated

  1,301   1,609 

New Taiwan dollar-denominated

  423   198 

Other foreign currencies (1)

  336    

Option contracts:

        

Japanese yen-denominated (2)

  2,271   2,088 

Total notional amount for translated earnings contracts

 $5,437  $5,042 

 

(1)Denominational currencies for other average rate forward contracts include the Mexican Peso and euro.
(2)Japanese yen-denominated option contracts include purchased put options and zero-cost collars. With respect to the zero-cost collars, the gross notional amount includes the value of the put and call options. However, due to the nature of the zero-cost collars, only the put or the call option can be exercised at maturity.

 

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The following tables summarize the effect in the consolidated statements of income relating to Corning’s derivative financial instruments (in millions).  The accumulated derivative gain included in accumulated other comprehensive loss on the consolidated balance sheets as of June 30, 2024 and December 31, 2023 is $43 million and $54 million, respectively.

 

  

Three months ended June 30,

 
         

Location of gain (loss)

        
  

(Loss) gain recognized

 

reclassified from

 

Gain (loss) reclassified

 
  

in other comprehensive

 

accumulated

 

from accumulated

 
  

income (OCI)

 

OCI into income

 

OCI into income

 
  

2024

  

2023

 

effective (ineffective)

 

2024

  

2023

 

Derivative hedging relationships for cash flow and
fair value hedges:

                 

  Foreign exchange contracts and other

 $(24) $42 

Cost of sales

 $15  $11 
         

Other income, net

  (1)  (1)

Total cash flow and fair value hedges

 $(24) $42   $14  $10 

 

  

Six months ended June 30,

 
         

Location of gain (loss)

        
  

Gain recognized

 

reclassified from

 

Gain (loss) reclassified

 
  

in other comprehensive

 

accumulated

 

from accumulated

 
  

income (OCI)

 

OCI into income

 

OCI into income

 
  

2024

  

2023

 

effective (ineffective)

 

2024

  

2023

 

Derivative hedging relationships for cash flow and
fair value hedges:

                 

  Foreign exchange contracts and other

 $9  $74 

Cost of sales

 $21  $18 
         

Other income, net

  (1)  (2)

Total cash flow and fair value hedges

 $9  $74   $20  $16 

 

  

(Loss) gain recognized in income

  
  

Three months ended

  

Six months ended

  
  

June 30,

  

June 30,

  

Undesignated derivatives

 

2024

  

2023

  

2024

  

2023

 

Location of (loss) gain recognized in income

Foreign exchange contracts

 $(13) $15  $(35) $28 

Other income, net

Translated earnings contracts

  27   116   66   108 

Translated earnings contract gain, net

Cross currency swap contracts

  (7)     (7)   

Other income, net

Total undesignated

 $7  $131  $24  $136  

 

Cross Currency Swap Contracts

 

Since inception of the Company’s Japanese yen-denominated debt, the Japanese yen has weakened and the US dollar value of these liabilities has decreased, generating unrealized foreign exchange gains that have been recognized over time in the consolidated statements of income. During Q2 2024, to economically lock in unrealized foreign exchange gains, the Company entered into a ¥23 billion, or $215 million, fixed rate, three-year cross currency swap contract relating to a portion of the Company’s Japanese yen-denominated debt due in 2027. At inception of this instrument, Corning received a net $68 million from the counterparty, representing an exchange of the notional amounts at a fixed foreign exchange rate of Japanese yen to US dollar and was initially recorded as a derivative liability. As of June 30, 2024, the fair value of this derivative liability is $75 million.

 

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Net Investment Hedges

 

In May 2023, the Company designated the full amount of its 2026 Notes and 2031 Notes with a total notional amount of €850 million, which are non-derivative financial instruments, as net investment hedges against our investments in certain European subsidiaries with euro functional currencies. As of June 30, 2024, the net investment hedges are deemed to be effective. During the three and six months ended June 30, 2024 foreign currency gain of $8 million and $30 million, respectively, associated with these net investment hedges were recognized in other comprehensive loss. During the three and six months ended June 30, 2023, the loss recognized in other comprehensive loss was not material.

 

Leased Precious Metals Contracts

 

The carrying amount of the leased precious metals pool, which is included within property, plant and equipment, net of accumulated depreciation in the consolidated balance sheets, is $65 million and $90 million as of  June 30, 2024 and December 31, 2023, respectively. The carrying amount of the leased precious metals pool includes cumulative fair value loss of $153 million and $239 million as of  June 30, 2024 and December 31, 2023, respectively. These losses are offset by changes in the fair value of hedges.

 
 

13. Shareholders’ Equity

 

Common Stock Dividends

 

On June 26, 2024, Corning’s Board of Directors declared a quarterly dividend of $0.28 per share of common stock. The dividend will be payable on September 27, 2024.

 

Fixed Rate Cumulative Convertible Preferred Stock, Series A

 

The Company had 2,300 outstanding shares of Fixed Rate Cumulative Convertible Preferred Stock, Series A (the “Preferred Stock”) as of December 31, 2020. On January 16, 2021, the Preferred Stock became convertible into 115 million common shares. On April 5, 2021 Corning executed the Share Repurchase Agreement (“SRA”) with Samsung Display Co., Ltd. (“SDC”) and the Preferred Stock was fully converted as of April 8, 2021. Immediately following the conversion, we repurchased and retired 35 million of the common shares held by SDC for an aggregate purchase price of approximately $1.5 billion, of which approximately $507 million was paid in  April in each of 2023, 2022 and 2021.

 

Pursuant to the SRA, with respect to the remaining 80 million common shares outstanding held by SDC:

 

●

58 million of the common shares SDC holds are subject to a seven-year lock-up period expiring in 2027.

●

SDC has the option to offer to sell 22 million common shares to Corning in specified tranches from time to time in calendar years 2024 through 2027. Corning may, at its sole discretion, elect to repurchase such common shares. If Corning elects not to repurchase the common shares and SDC sells the common shares on the open market, Corning will be required to pay SDC a make-whole payment, subject to a 5% cap of the repurchase proceeds that otherwise would have been paid by Corning. As of June 30, 2024 and December 31, 2023, the fair value of the liability associated with this option was not material.

 

Share Repurchase Program

 

In 2019, the Board authorized the repurchase of up to $5.0 billion of common stock (“2019 Authorization”). As of June 30, 2024, approximately $3.2 billion remains available under the Company’s 2019 Authorization.

 

During the three and six months ended June 30, 2024, the Company repurchased 3 million common shares for $105.4 million, pursuant to the terms of the SRA, as discussed above. No shares were repurchased under our 2019 Authorization during the three and six months ended June 30, 2023.

 

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Accumulated Other Comprehensive Loss

 

For the three and six months ended June 30, 2024 and 2023, the change in accumulated other comprehensive loss was primarily related to the foreign currency translation adjustments.

 

The following table presents the changes in the foreign currency translation adjustment component of accumulated other comprehensive loss, including the proportionate share of equity method affiliates’ accumulated other comprehensive loss (in millions):

 

  

Three months ended

  

Six months ended

 
  

June 30,

  

June 30,

 
  

2024

  

2023

  

2024

  

2023

 

Beginning balance

 $(2,272) $(1,796) $(1,942) $(1,712)

Loss on foreign currency translation, net of tax benefit - $6, $3, $29, $27

  (212)  (310)  (543)  (393)

Equity method affiliates

  (10)  (8)  (9)  (9)

Net current-period other comprehensive loss, net of tax

  (222)  (318)  (552)  (402)

Ending balance

 $(2,494) $(2,114) $(2,494) $(2,114)

 
 

14. Share-Based Compensation

 

Total share-based compensation expense was $66 million and $126 million for the three and six months ended June 30, 2024 respectively, and $59 million and $111 million for the three and six months ended June 30, 2023, respectively.  

 

Incentive Stock Plans

 

Time-Based Restricted Stock and Restricted Stock Units

 

The following table summarizes the changes in non-vested time-based restricted stock and restricted stock units for the six months ended June 30, 2024:

 

      

Weighted

 
  

Number

  

average

 
  

of shares

  

grant-date

 
  

(in thousands)

  

fair value

 

Non-vested shares and share units as of December 31, 2023

  13,321  $33.89 

Granted

  1,364   32.84 

Vested

  (4,047)  36.11 

Forfeited

  (316)  34.56 

Non-vested shares and share units as of June 30, 2024

  10,322  $32.86 


Performance-Based Restricted Stock Units

 

The following table summarizes the changes in non-vested performance-based restricted stock units for the six months ended June 30, 2024:

 

      

Weighted

 
  

Number

  

average

 
  

of shares

  

grant-date

 
  

(in thousands)

  

fair value

 

Non-vested share units as of December 31, 2023

  2,026  $38.89 

Granted

  1,647   32.70 

Vested

  (1,122)  41.70 

Performance adjustments

  916   32.84 

Forfeited

  (56)  33.10 

Non-vested share units as of June 30, 2024

  3,411  $33.61 

 

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Stock Options

 

The following table summarizes information concerning stock options as of  June 30, 2024 and the related activity for the six months ended June 30, 2024:

 

          

Weighted-

     
          

average

     
      

Weighted-

  

remaining

  

Aggregate

 
  

Number

  

average

  

contractual

  

intrinsic

 
  

of shares

  

exercise

  

term

  

value

 
  

(in thousands)

  

price

  

(in years)

  

(in thousands)

 

Options outstanding as of December 31, 2023

  7,499  $23.82         

Exercised

  (1,537)  22.05         

Expired

  (5)  20.19         

Options outstanding as of June 30, 2024

  5,957   24.28   4.64  $86,768 

Options vested and exercisable as of June 30, 2024

  5,957   24.28   4.64   86,768 

 
 

15. Reportable Segments

 

The Company has determined that it has five reportable segments for financial reporting purposes, as follows:

 

●Optical Communications – manufactures carrier network and enterprise network components for the telecommunications industry; the carrier network group consists primarily of products and solutions for optical-based communications infrastructure for services such as video, data and voice communications, and the enterprise network group consists primarily of optical-based communication networks sold to businesses, governments and individuals for their own use.
●Display Technologies – manufactures high quality glass substrates for flat panel displays, including liquid crystal displays and organic light-emitting diodes that are used primarily in televisions, notebook computers, desktop monitors, tablets and handheld devices.
●Specialty Materials – manufactures products that provide material formulations for glass, glass ceramics and fluoride crystals to meet demand for unique customer needs across a wide variety of commercial and industrial markets, including materials optimized for mobile consumer electronics, semiconductor equipment optics and consumables, aerospace and defense optics, radiation shielding products, sunglasses and telecommunications components.
●Environmental Technologies – manufactures ceramic substrates and filter products for emissions control systems in mobile applications.
●Life Sciences – develops, manufactures, and supplies laboratory products, including labware, equipment, media, serum and reagents, enabling workflow solutions for drug discovery and bioproduction.


All other businesses that do not meet the quantitative threshold for separate reporting have been grouped as Hemlock and Emerging Growth Businesses. Net sales for this group are mainly attributable to HSG, an operating segment that produces solar and semiconductor products. The emerging growth businesses primarily consist of Pharmaceutical Technologies, Auto Glass Solutions and the Emerging Innovations Group.  

  

Financial results for the reportable segments and Hemlock and Emerging Growth Businesses are prepared on a basis consistent with the internal disaggregation of financial information to assist the chief operating decision maker (“CODM”) in making internal operating decisions. As a significant portion of segment revenues and expenses are denominated in currencies other than the U.S. dollar, management believes it is important to understand the impact on segment net sales and segment net income (loss) of translating these currencies into U.S. dollars. Therefore, the Company utilizes constant-currency reporting for the Display Technologies, Specialty Materials, Environmental Technologies and Life Sciences segments to exclude the impact on segment sales and segment net income from the Japanese yen, South Korean won, Chinese yuan, New Taiwan dollar and euro, as applicable to the segment. In addition, effective January 1, 2024, the Company began utilizing constant-currency reporting for the Optical Communications segment to exclude the impact from the Mexican peso on segment results. Prior periods were not recast as the impact was not material. The most significant constant-currency adjustment relates to the Japanese yen exposure within the Display Technologies segment. 

 

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The constant-currency rates established for our core performance measures are internally derived long-term management estimates, which are closely aligned with our hedging instrument rates. These hedging instruments may include, but are not limited to, foreign exchange forward or option contracts and foreign-denominated debt. The Company believes that the use of constant-currency reporting allows management to understand segment results without the volatility of currency fluctuation, analyze underlying trends in the businesses and establish operational goals and forecasts.

 

Constant-currency rates used are as follows and are applied to all periods presented and to all foreign exchange exposures during the period, even though we may be less than 100% hedged:

 

 

Currency

 

Japanese yen

 

Korean won

 

Chinese yuan

 

New Taiwan dollar

 

Euro

 Mexican peso
 

Rate

 

¥107

 

₩1,175

 

¥6.7

 

NT$31

 

€0.81

 MX$20

 

In addition, certain income and expenses are excluded from segment net income (loss) and included in the unallocated amounts in the reconciliation of reportable segment net income (loss) to net income attributable to Corning Incorporated. These items are not used by the CODM in allocating resources or evaluating the results of the segments and include the following: the impact of translating the Japanese yen-denominated debt; the impact of the translated earnings contracts; acquisition-related costs; certain discrete tax items and other tax-related adjustments; restructuring, impairment and other charges and credits; certain litigation, regulatory and other legal matters; pension mark-to-market adjustments; and other non-recurring non-operational items. Although these amounts are excluded from segment results, they are included in reported consolidated results.

 

Corning’s administrative and staff functions are performed on a centralized basis and such costs and expenses are allocated among the segments differently than they would be for stand-alone financial reporting purposes. These include certain costs and expenses of shared services, such as information technology, human resources, legal, finance and supply chain management. Expenses that are not allocated to the segments are included in the reconciliation of reportable segment net income (loss) to net income attributable to Corning Incorporated. Segment net income (loss) may not be consistent with measures used by other companies.

 

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The following provides selected segment information as described above:

 

Segment information (in millions):

 

                 Hemlock    
                 and    
                 

Emerging

    
  

Optical

  

Display

  

Specialty

  

Environmental

  

Life

  

Growth

     
  

Communications

  

Technologies

  

Materials

  

Technologies

  

Sciences

  

Businesses

  

Total

 

Three months ended June 30, 2024

                            

Segment net sales

 $1,113  $1,014  $501  $431  $249  $296  $3,604 

Depreciation (1)

 $66  $110  $40  $32  $17  $40  $305 

Research, development and engineering expenses (2)

 $66  $28  $57  $26  $6  $39  $222 

Income tax (provision) benefit (3)

 $(41) $(68) $(17) $(26) $(4) $4  $(152)

Segment net income (loss)

 $143  $258  $63  $97  $17  $(23) $555 

 

                      

Hemlock

     
                      

and

     
                      

Emerging

     
  

Optical

  

Display

  

Specialty

  

Environmental

  

Life

  

Growth

     
  

Communications

  

Technologies

  

Materials

  

Technologies

  

Sciences

  

Businesses

  

Total

 

Three months ended June 30, 2023

                            

Segment net sales

 $1,066  $928  $423  $457  $231  $377  $3,482 

Depreciation (1)

 $64  $120  $39  $32  $17  $35  $307 

Research, development and engineering expenses (2)

 $56  $24  $57  $23  $8  $41  $209 

Income tax provision (3)

 $(38) $(55) $(9) $(28) $(3) $(11) $(144)

Segment net income

 $140  $208  $33  $107  $11  $26  $525 

 

                      

Hemlock

     
                      

and

     
                      

Emerging

     
  

Optical

  

Display

  

Specialty

  

Environmental

  

Life

  

Growth

     
  

Communications

  

Technologies

  

Materials

  

Technologies

  

Sciences

  

Businesses

  

Total

 

Six months ended June 30, 2024

                            

Segment net sales

 $2,043  $1,886  $955  $886  $485  $607  $6,862 

Depreciation (1)

 $132  $226  $76  $64  $34  $78  $610 

Research, development and engineering expenses (2)

 $131  $54  $117  $49  $12  $75  $438 

Income tax (provision) benefit (3)

 $(69) $(121) $(28) $(54) $(8) $3  $(277)

Segment net income (loss)

 $243  $459  $107  $202  $30  $(33) $1,008 

 

                      

Hemlock

     
                      

and

     
                      

Emerging

     
  

Optical

  

Display

  

Specialty

  

Environmental

  

Life

  

Growth

     
  

Communications

  

Technologies

  

Materials

  

Technologies

  

Sciences

  

Businesses

  

Total

 

Six months ended June 30, 2023

                            

Segment net sales

 $2,191  $1,691  $829  $888  $487  $763  $6,849 

Depreciation (1)

 $130  $243  $74  $65  $34  $68  $614 

Research, development and engineering expenses (2)

 $116  $47  $110  $47  $18  $80  $418 

Income tax provision (3)

 $(81) $(97) $(19) $(50) $(5) $(20) $(272)

Segment net income

 $299  $368  $72  $189  $20  $42  $990 

 

(1)Depreciation expense for Corning’s reportable segments and Hemlock and Emerging Growth Businesses includes an allocation of depreciation of corporate property not specifically identifiable to a segment.
(2)Research, development and engineering expenses include direct project spending that is identifiable to a segment.
(3)Income tax (provision) benefit reflects a tax rate of 21%.

 

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The following table presents a reconciliation of net sales of reportable segments to consolidated net sales (in millions):

 

  

Three months ended

  

Six months ended

 
  

June 30,

  

June 30,

 
  

2024

  

2023

  

2024

  

2023

 

Net sales of reportable segments

 $3,308  $3,105  $6,255  $6,086 

Net sales of Hemlock and Emerging Growth Businesses

  296   377   607   763 

Impact of constant-currency reporting (1)

  (353)  (239)  (636)  (428)

Consolidated net sales

 $3,251  $3,243  $6,226  $6,421 

 

(1)This amount primarily represents the impact of foreign currency adjustments in the Display Technologies segment.

 

The following table presents a reconciliation of net income of reportable segments to net income attributable to Corning Incorporated (in millions):

 

  

Three months ended

  

Six months ended

 
  

June 30,

  

June 30,

 
  

2024

  

2023

  

2024

  

2023

 

Net income of reportable segments

 $578  $499  $1,041  $948 

Net (loss) income of Hemlock and Emerging Growth Businesses

  (23)  26   (33)  42 

Unallocated amounts:

                

Impact of constant-currency reporting

  (267)  (174)  (493)  (323)

Translated earnings contract gain, net

  27   116   66   108 

Translation gain on Japanese yen-denominated debt

  54   109   135   127 

Research, development, and engineering expenses (1)

  (40)  (42)  (82)  (87)

Amortization of intangibles

  (30)  (31)  (60)  (62)

Interest expense, net

  (65)  (61)  (126)  (117)

Income tax benefit

  102   38   156   129 

Severance charges

  (3)  (73)  (3)  (78)

Capacity optimization and other charges and credits (2)

  (135)  (64)  (126)  (125)

Other corporate items

  (94)  (62)  (162)  (105)

Net income attributable to Corning Incorporated

 $104  $281  $313  $457 

 

(1)Amount does not include research, development and engineering expense related to severance charges. 
(2)Amount includes charges associated with impairment losses, asset write-offs, accelerated depreciation, disposal costs and inventory write-downs. Refer to Note 2 (Restructuring, Impairment and Other Charges and Credits) for additional information.

 

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 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

Corning Incorporated and its consolidated subsidiaries are hereinafter sometimes referred to as the “Company,” the “Registrant,” “Corning,” “we,” “our,” or “us.”

 

This report contains forward-looking statements that involve a number of risks and uncertainties. These statements relate to plans, objectives, expectations and estimates and may contain words such as “will,” “believe,” “anticipate,” “expect,” “intend,” “plan,” “seek,” “see,” “would,” “target,” “estimate,” “forecast,” or similar expressions. Actual results could differ materially from what is expressed or forecasted in forward-looking statements. Some of the factors that could contribute to these differences include those discussed under “Forward-Looking Statements,” “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and elsewhere in this report.

 

ORGANIZATION OF INFORMATION

 

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) was prepared to provide a historical and prospective narrative on our financial condition and results of operations through the eyes of management and should be read in conjunction with our MD&A of our Annual Report on Form 10-K for the year ended December 31, 2023 (“2023 Form 10-K”).

 

Our MD&A is organized as follows:

 

● Overview
● Results of Operations
● Segment Analysis
● Core Performance Measures
● Liquidity and Capital Resources
● Environment
● Critical Accounting Estimates
● Forward-Looking Statements

 

OVERVIEW

 

Corning is vital to progress. We are the world leaders in glass science, ceramic science and optical physics – along with four proprietary manufacturing and engineering platforms – and we apply our capabilities to invent and make category-defining, highly engineered products; drive profitable and durable growth; and create long-term value. Today, our markets include optical communications, mobile consumer electronics, display, automotive, solar, semiconductor and life sciences.

 

The Company has outlined a plan called “Springboard,” – to add more than $3 billion in annualized core sales with strong incremental profit and cash flow in the next three years as cyclical factors and secular trends converge.

 

Core Components of Springboard:

 

● Management believes that first-quarter 2024 will be the lowest quarter for the year.
● The Company expects to grow by more than $3 billion in annualized core sales in the next three years, driven by a combination of cyclical factors and secular trends. The outlook in each of the Company’s markets is positive, and its market positions are strong. Innovative products and deep customer relationships position Corning well to capitalize on these opportunities.
● As Corning captures this growth, management expects to deliver powerful incremental profit and cash flow. The Company already has the required production capacity and technical capabilities in place, and the cost and capital are already reflected in its financials.
● With the success of the Springboard plan, the Company expects to be able to accelerate the return of cash to shareholders.

 

 

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Corning expects a number of upward cyclical factors and secular trends to drive growth across our Market-Access Platforms. In Optical Communications, generative artificial intelligence is expected to create a significant amount of growth; additionally, our carrier customers are reaching the end of their inventory drawdowns and beginning to order closer to their current deployment levels; and government efforts to bring high-speed internet to rural communities through the Broadband Equity Access and Deployment program will contribute to growth beginning in 2025 and add significant sales over the next several years. In Display, we expect to capitalize on the trend of larger screens, with about 1 inch of screen-size growth per year to add low-to-mid-single-digit volume growth. In Automotive, we have a triple-digit automotive glass business today, and we expect sales in that business to almost triple by 2026; additionally, recently announced U.S. EPA regulations will require the adoption of gasoline particulate filters in the U.S. starting with model-year 2027 – this adoption offers hundreds of millions of dollars of growth for us in the U.S. alone, even in the face of BEV adoption, and we expect sales to start in 2026. Finally, we expect to leverage the Inflation Reduction Act to support the build out of a U.S. solar supply chain.

 

Overall, Corning is energized by the tremendous opportunity for value creation we have built for our shareholders.

 

2024 Corporate Outlook

 

We expect core net sales of approximately $3.7 billion for the third quarter of 2024. 

 

 

RESULTS OF OPERATIONS

 

The following table presents selected highlights from our operations (in millions):

 

   

Three months ended

    

%

    

Six months ended

    

%

  
   

June 30,

    

change

    

June 30,

    

change

  
   

2024

    

2023

    

24 vs. 23

    

2024

    

2023

    

24 vs. 23

  
                                                 

Net sales

   $ 3,251     $ 3,243       —     $ 6,226     $ 6,421       (3 )%
                                                 

Cost of sales

   $ 2,302     $ 2,230       3 %   $ 4,284     $ 4,405       (3 )%
                                                 

Gross margin

   $ 949     $ 1,013       (6 )%   $ 1,942     $ 2,016       (4 )%

Gross margin %

     29 %     31 %             31 %     31 %        
                                                 

Selling, general and administrative expenses

   $ 471     $ 440       7 %   $ 922     $ 861       7 %

as a % of net sales

     14 %     14 %             15 %     13 %        
                                                 

Research, development and engineering expenses

   $ 262     $ 263       —     $ 520     $ 517       1 %

as a % of net sales

     8 %     8 %             8 %     8 %        
                                                 

Translated earnings contract gain, net

   $ 27     $ 116       (77 )%   $ 66     $ 108       (39 )%
                                                 

Income before income taxes

   $ 172     $ 409       (58 )%   $ 468     $ 637       (27 )%
                                                 

Provision for income taxes

   $ (50 )   $ (106 )     (53 )%   $ (121 )   $ (143 )     (15 )%

Effective tax rate

     29 %     26 %             26 %     22 %        
                                                 

Net income attributable to Corning Incorporated

   $ 104     $ 281       (63 )%   $ 313     $ 457       (32 )%
                                                 

Comprehensive (loss) income attributable to Corning Incorporated

   $ (113 )   $ (21 )     *     $ (231 )   $ 88       *  

 

*  Not meaningful

 

 

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Net sales 

 

For the three months ended June 30, 2024, net sales were up slightly when compared to the same period in 2023. This was primarily driven by increases in specialty glass product sales of $77 million and telecommunication product sales of $47 million, offset by decreases in polycrystalline silicon product sales of $59 million, environmental substrate and filter product sales of $29 million and display product sales of $21 million.

 

For the six months ended June 30, 2024, net sales decreased $195 million, or 3%, when compared to the same period in 2023. This was primarily driven by decreases in telecommunication product sales of $148 and polycrystalline silicon product sales of $120 million, partially offset by increases in specialty glass product sales of $123 million. 

 

Cost of sales / Gross margin

 

The types of expenses included in cost of sales are: raw materials consumption, including direct and indirect materials; salaries, wages and benefits; depreciation and amortization; production utilities; production-related purchasing; warehousing (including receiving and inspection); repairs and maintenance; inter-location inventory transfer costs; production and warehousing facility property insurance; rent for production facilities; freight and logistics costs; and other production overhead.

 

For the three months ended June 30, 2024, gross margin decreased $64 million, or 6%, and decreased as a percentage of sales by 2 percentage points when compared to the same period in 2023. This is primarily driven by a $62 million increase in restructuring and asset write-off charges, as discussed in Note 2 (Restructuring, Impairment and Other Charges and Credits) in the accompanying notes to the consolidated financial statements.

 

For the six months ended June 30, 2024, gross margin decreased $74 million, or 4%, and remained consistent as a percentage of sales when compared to the same period in 2023.

 

Selling, general and administrative expenses

 

The types of expenses included in the selling, general and administrative expenses line item are salaries, wages and benefits; share-based compensation expense; travel; sales commissions; professional fees; and depreciation and amortization, utilities and rent for administrative facilities.

 

For the three months ended June 30, 2024, selling, general and administrative expenses increased $31 million, or 7%, and remained consistent as a percentage of sales when compared to the same period in 2023. For the six months ended June 30, 2024, selling, general and administrative expense increased $61 million, or 7%, and increased as a percentage of sales due to the lower sales in the current period as compared to the same period in 2023.

 

Research, development and engineering expenses

 

For the three and six months ended June 30, 2024, research, development and engineering expenses remained relatively flat and consistent as a percentage of sales when compared to the same periods in 2023.

 

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Translated earnings contract gain, net

 

Included in translated earnings contract gain, net, is the impact of foreign currency contracts which economically hedge the translation exposure arising from movements in the Japanese yen, South Korean won, new Taiwan dollar, euro, Chinese yuan and Mexican peso and its impact on net income.

 

The following table provides detailed information on the impact of translated earnings contract gain, net (in millions):

 

   

Three months ended

    

Three months ended

    

Change

  
   

June 30, 2024

    

June 30, 2023

    

2024 vs. 2023

  
   

Income

            

Income

            

Income

          
   

before

    

Net

    

before

    

Net

    

before

    

Net

  
    tax     income     tax     income     tax     income  

Hedges related to translated earnings:

                                                

Realized gain, net (1)(2)

   $ 48     $ 37     $ 71     $ 57     $ (23 )   $ (20 )

Unrealized (loss) gain, net (3)

     (21 )     (16 )     45       36       (66 )     (52 )

Total translated earnings contract gain, net

   $ 27     $ 21     $ 116     $ 93     $ (89 )   $ (72 )

 

   

Six months ended

    

Six months ended

    

Change

  
   

June 30, 2024

    

June 30, 2023

    

2024 vs. 2023

  
   

Income

            

Income

            

Income

          
   

before

    

Net

    

before

    

Net

    

before

    

Net

  
   

tax

    

income

    

tax

    

income

    

tax

    

income

  

Hedges related to translated earnings:

                                                

Realized gain, net (1)(2)

   $ 111     $ 85     $ 138     $ 109     $ (27 )   $ (24 )

Unrealized loss, net (4)

     (45 )     (34 )     (30 )     (22 )     (15 )     (12 )

Total translated earnings contract gain, net

   $ 66     $ 51     $ 108     $ 87     $ (42 )   $ (36 )

 

(1)

Amount includes pre-tax losses of $26 million and $57 million for the three and six months ended June 30, 2024, respectively, and pre-tax realized losses of $14 million and $28 million for the three and six months ended June 30, 2023, respectively, related to the expiration of option contracts. These amounts were reflected within operating activities in the consolidated statements of cash flows.  
(2) For the three and six months ended June 30, 2023, amount excludes $11 million related to a forward contract designated as a net investment hedge, which was reflected within investing activities in the consolidated statements of cash flows.  
(3) The impact to income for the three months ended June 30, 2024 was primarily driven by unrealized losses from our South Korean won, and new Taiwan dollar-denominated hedges, partially offset by unrealized gains from our Japanese yen-denominated hedges. The impact to income for the three months ended June 30, 2023 was primarily driven by unrealized gains from our Japanese yen-denominated hedges, partially offset by unrealized losses from our South Korean-won and Chinese-yuan denominated hedges.
(4)

The impact to income for the six months ended June 30, 2024 was primarily driven by unrealized losses from our South Korean won, new Taiwan dollar and Chinese yuan-denominated hedges, partially offset by unrealized gains from our Japanese yen-denominated hedges. The impact to income for the six months ended June 30, 2023 was primarily driven by unrealized losses from our South Korean-won and Chinese-yuan denominated hedges, partially offset by unrealized gains from our Japanese yen-denominated hedges.

 

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Income before income taxes

 

For the three and six months ended June 30, 2024, income before income taxes decreased $237 million and $169 million, respectively, when compared to the same periods in 2023, which is primarily driven by less gains on our translated earnings contracts and a decline in our gross margin, as discussed above, when compared to the same periods in 2023.

 

Provision for Income Taxes

 

For the three and six months ended June 30, 2024, the effective tax rate differed from the United States (“U.S.”) statutory rate of 21%, primarily due to certain pre-tax losses with no corresponding expected tax benefit. These losses were mostly driven by asset write-offs associated with the closure of a display manufacturing plant. Refer to Note 2 (Restructuring, Impairment and Other Charges and Credits) in the accompanying notes to the consolidated financial statements for additional information.

 

For the three and six months ended June 30, 2023, the effective tax rate differed from the U.S. statutory rate of 21%, primarily due to changes in valuation allowance assessments, partially offset by differences arising from foreign earnings, adjustments to share-based compensation, and a net benefit due to foreign derived intangible income.

 

The effective tax rate for the three and six months ended June 30, 2024 increased when compared to the same periods in 2023 primarily due to certain pre-tax losses during the three and six months ended June 30, 2024 with no corresponding expected tax benefit and a reduction in the net benefit due to foreign derived intangible income.

 

Net income attributable to Corning Incorporated

 

As a result of the items discussed above, net income attributable to Corning Incorporated and per share data were as follows (in millions, except per share amounts):

 

   

Three months ended

    

Six months ended

  
   

June 30,

    

June 30,

  
   

2024

    

2023

    

2024

    

2023

  

Net income attributable to Corning Incorporated

   $ 104     $ 281     $ 313     $ 457  

Basic earnings per common share

   $ 0.12     $ 0.33     $ 0.37     $ 0.54  

Diluted earnings per common share

   $ 0.12     $ 0.33     $ 0.36     $ 0.53  
                                 

Weighted-average common shares outstanding - basic

     853       848       853       846  

Weighted-average common shares outstanding - diluted

     864       859       865       859  

 

Comprehensive (loss) income attributable to Corning Incorporated

 

Comprehensive loss attributable to Corning Incorporated for the three months ended June 30, 2024 was $113 million compared to comprehensive loss of $21 million for the three months ended June 30, 2023. This movement is driven by the decrease in net losses on foreign currency translation adjustments of $96 million, primarily driven by gains in the Japanese yen and Chinese yuan, partially offset by losses in the Korean won and euro.

 

Comprehensive loss attributable to Corning Incorporated for the six months ended June 30, 2024 was $231 million compared to comprehensive income of $88 million for the three months ended June 30, 2023. This movement is driven by the increase in net losses on foreign currency translation adjustments of $150 million, primarily driven by losses in the Japanese yen, euro and Korean won, partially offset by gains in the Chinese yuan.

 

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SEGMENT ANALYSIS

 

Financial results for the reportable segments and Hemlock and Emerging Growth Businesses are prepared on a basis consistent with the internal disaggregation of financial information to assist the chief operating decision maker (“CODM”) in making internal operating decisions, which is more fully discussed within Note 15 (Reportable Segments) in the accompanying notes to the consolidated financial statements and includes a reconciliation of our segment information to the corresponding amounts in our consolidated statements of income.

 

Segment net income may not be consistent with measures used by other companies.

 

The following table presents segment net sales by reportable segment and Hemlock and Emerging Growth Businesses (in millions):

 

   

Three months ended

    

$

    

%

    

Six months ended

    

$

    

%

  
   

June 30,

    

change

    

change

    

June 30,

    

change

    

change

  
   

2024

    

2023

    

24 vs. 23

    

24 vs. 23

    

2024

    

2023

    

24 vs. 23

    

24 vs. 23

  

Optical Communications

   $ 1,113     $ 1,066     $ 47       4 %   $ 2,043     $ 2,191     $ (148 )     (7 )%

Display Technologies

     1,014       928       86       9 %     1,886       1,691       195       12 %

Specialty Materials

     501       423       78       18 %     955       829       126       15 %

Environmental Technologies

     431       457       (26 )     (6 )%     886       888       (2 )     —  

Life Sciences

     249       231       18       8 %     485       487       (2 )     —  

Net sales of reportable segments

     3,308       3,105       203       7 %     6,255       6,086       169       3 %

Hemlock and Emerging Growth Businesses

     296       377       (81 )     (21 )%     607       763       (156 )     (20 )%

Net sales of reportable segments and Hemlock and Emerging Growth Businesses (1)

   $ 3,604     $ 3,482     $ 122       4 %   $ 6,862     $ 6,849     $ 13       —  

 

(1) Refer to Note 15 (Reportable Segments) in the accompanying notes to the consolidated financial statements for the reconciliation to consolidated net sales.

 

Optical Communications

The increase in segment net sales for the three month period was primarily driven by an increase in sales volume due to higher demand driven by AI-related connectivity solutions, partially offset by lower carrier demand as customers continue to draw down their inventory. The decrease in segment net sales for the six month period was primarily driven by the decline in sales volume due to lower carrier demand as customers continued to drawdown their inventory, partially offset by the increase in sales driven by AI-related connectivity solutions.

 

Display Technologies 

The increase in segment net sales for both the three and six month periods was due to higher sales volume, attributable to increased panel maker utilization driven by growth in retail demand, as well as pricing actions taken in the second half of 2023.

 

Specialty Materials 

The increase in segment net sales for both the three and six month periods was due to continued strong demand for premium glass for mobile devices as well as semiconductor-related products.

 

Environmental Technologies 

The decrease in segment net sales for both the three and six month periods was primarily due to a decline in heavy-duty diesel, reflecting the impact of the Class 8 truck downcycle in North America.

 

Life Sciences

The increase in segment net sales for the three month period was primarily due to increased demand as customers are completing their inventory drawdowns. Segment net sales for the six month period was relatively flat with the prior year.

 

Hemlock and Emerging Growth Businesses

The decrease in segment net sales for both the three and six month periods was primarily due to a decrease in our HSG business driven by lower pricing for solar-grade polysilicon and lower sales in our Pharmaceutical Technologies business due to the completion of volume commitments for COVID-related products.

 

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The following table presents segment net income by reportable segment and Hemlock and Emerging Growth Businesses (in millions):

 

   

Three months ended

    

$

    

%

    

Six months ended

    

$

    

%

  
   

June 30,

    

change

    

change

    

June 30,

    

change

    

change

  
   

2024

    

2023

    

24 vs. 23

    

24 vs. 23

    

2024

    

2023

    

24 vs. 23

    

24 vs. 23

  

Optical Communications

   $ 143     $ 140     $ 3       2 %   $ 243     $ 299     $ (56 )     (19 )%

Display Technologies

     258       208       50       24 %     459       368       91       25 %

Specialty Materials

     63       33       30       91 %     107       72       35       49 %

Environmental Technologies

     97       107       (10 )     (9 )%     202       189       13       7 %

Life Sciences

     17       11       6       55 %     30       20       10       50 %

Net income of reportable segments

     578       499       79       16 %     1,041       948       93       10 %

Hemlock and Emerging Growth Businesses

     (23 )     26       (49 )     *       (33 )     42       (75 )     *  

Net income of reportable segments and Hemlock and Emerging Growth Businesses (1)

   $ 555     $ 525     $ 30       6 %   $ 1,008     $ 990     $ 18       2 %

 

* Not meaningful

 

(1) Refer to Note 15 (Reportable Segments) in the accompanying notes to the consolidated financial statements for the reconciliation to net income attributable to Corning Incorporated.

 

Optical Communications

The increase in segment net income for the three month period was primarily driven by the increase in sales volume, as outlined above. The decrease in segment net income for the six month period was primarily driven by a decline in sales volume, as outlined above.

 

Display Technologies

The increase in segment net income for both the three and six month periods was primarily driven by the increase in sales, as outlined above.

 

Specialty Materials

The increase in segment net income for both the three and six month periods was primarily driven by the increase in sales, as outlined above, and manufacturing improvements.

 

Environmental Technologies

The decrease in segment net income for the three month period was primarily driven by the decrease in sales, as outlined above. The increase in segment net income for the six month period was primarily driven by improved operating performance.

 

Life Sciences

The increase in segment net income for the three month period was primarily driven by the increase in sales, as outlined above. The increase in segment net income for the six month period was primarily driven by profitability improvements from productivity actions taken.

 

Hemlock and Emerging Growth Businesses

The decrease in segment net income was primarily driven by our HSG and Pharmaceutical Technologies businesses due to lower sales, as outlined above.

 

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CORE PERFORMANCE MEASURES

 

In managing the Company and assessing our financial performance, we adjust certain measures included in our consolidated financial statements to exclude specific items to arrive at our core performance measures. These items include the impact of translating the Japanese yen-denominated debt, the impact of the translated earnings contracts, acquisition-related costs, certain discrete tax items and other tax-related adjustments, restructuring, impairment and other charges and credits, certain litigation, regulatory and other legal matters, pension mark-to-market adjustments and other items which do not reflect the ongoing operating results of the Company.

 

In addition, because a significant portion of our revenues and expenses are denominated in currencies other than the U.S. dollar, management believes it is important to understand the impact on sales and net income of translating these currencies into U.S. dollars. Therefore, management utilizes constant-currency reporting for the Display Technologies, Specialty Materials, Environmental Technologies and Life Sciences segments to exclude the impact from the Japanese yen, South Korean won, Chinese yuan, New Taiwan dollar and euro, as applicable to the segment. In addition, effective January 1, 2024, the Company began utilizing constant-currency reporting for the Optical Communications segment to exclude the impact from the Mexican peso on segment results. Prior periods were not recast as the impact was not material. The most significant constant-currency adjustment relates to the Japanese yen exposure within the Display Technologies segment.

 

The constant-currency rates established for our core performance measures are internally derived long-term management estimates, which are closely aligned with our hedging instrument rates. These hedging instruments may include, but are not limited to, foreign exchange forward or option contracts and foreign-denominated debt. For details of the rates used, please see the footnotes to the “Reconciliation of Non-GAAP Measures” section. We believe that the use of constant-currency reporting allows management to understand our results without the volatility of currency fluctuations, analyze underlying trends in the businesses and establish operational goals and forecasts. 

 

Core performance measures are not prepared in accordance with GAAP. We provide investors with these non-GAAP measures to evaluate our results as we believe they are indicative of our core operating performance and provide greater transparency to how management evaluates our results and trends and makes financial and operational decisions. These measures are not, and should not be viewed as a substitute for, GAAP reporting measures. With respect to the outlook for future periods, it is not possible to provide reconciliations for these non-GAAP measures because management does not forecast the movement of foreign currencies against the U.S. dollar, or other items that do not reflect ongoing operations, nor does it forecast items that have not yet occurred or are out of management’s control. As a result, management is unable to provide outlook information on a GAAP basis.

 

For a reconciliation of non-GAAP performance measures to their most directly comparable GAAP financial measure, please see “Reconciliation of Non-GAAP Measures.”

 

Results of Operations – Core Performance Measures

 

The following table presents selected highlights from our operations, excluding certain items (in millions, except per share amounts):

 

   

Three months ended

    

%

    

Six months ended

    

%

  
   

June 30,

    

change

    

June 30,

    

change

  
   

2024

    

2023

    

24 vs. 23

    

2024

    

2023

    

24 vs. 23

  

Core net sales

   $ 3,604     $ 3,482       4 %   $ 6,862     $ 6,849       —  

Core net income

   $ 407     $ 388       5 %   $ 737     $ 738       —  

Core earnings per share

   $ 0.47     $ 0.45       4 %   $ 0.85     $ 0.86       (1 )%

 

29
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Core Net Sales 

 

For the three months ended June 30, 2024, we generated core net sales of $3.6 billion compared to core net sales of $3.5 billion for the same period in 2023. The increase in core net sales of $122 million was primarily driven by increased segment sales of $86 million in Display, $78 million in Specialty Materials and $47 million in Optical Communications, partially offset by decreased segment sales of $81 million in Hemlock and Emerging Growth Businesses. Net sales by reportable segment and Hemlock and Emerging Growth Businesses are discussed in detail in the “Segment Analysis” section of our MD&A.

 

For the six months ended June 30, 2024, we generated core net sales of $6.9 billion compared to core net sales of $6.8 billion for the same period in 2023. The increase in core net sales of $13 million was primarily driven by increased segment sales of $195 million in Display and $126 million in Specialty Materials, offset by decreased segment sales of $156 million in Hemlock and Emerging Growth Businesses and $148 million in Optical Communications. Net sales by reportable segment and Hemlock and Emerging Growth Businesses are discussed in detail in the “Segment Analysis” section of our MD&A.

 

Core Net Income

 

For the three months ended June 30, 2024, we generated core net income of $407 million compared to core net income generated of $388 million for the same period in 2023. The increase of $19 million was primarily due to higher segment net income of $50 million in Display and $30 million in Specialty Materials, partially offset by lower segment net income of $49 million in Hemlock and Emerging Growth Businesses. Net income by reportable segment and Hemlock and Emerging Growth Businesses are discussed in detail in the “Segment Analysis” section of our MD&A.

 

For the six months ended June 30, 2024, we generated core net income of $737 million compared to core net income of $738 million for the same period in 2023. The decrease of $1 million was primarily due to lower segment net income of $56 million in Optical Communications and $75 million in Hemlock and Emerging Growth Businesses, offset by higher segment net income of $91 million in Display Technologies and $35 million in Specialty Materials. Net income by reportable segment and Hemlock and Emerging Growth Businesses are discussed in detail in the “Segment Analysis” section of our MD&A.

 

Core Earnings per Share

 

Core earnings per share increased for the three months ended June 30, 2024 to $0.47 per share, primarily as a result of the changes in core net income, outlined above.

 

Core earnings per share decreased for the six months ended June 30, 2024 to $0.85 per share, primarily as a result of the changes in core net income, outlined above.

 

The following table sets forth the computation of core earnings per share (in millions, except per share amounts):

 

   

Three months ended

    

Six months ended

  
   

June 30,

    

June 30,

  
   

2024

    

2023

    

2024

    

2023

  

Core net income

   $ 407     $ 388     $ 737     $ 738  
                                 

Weighted-average common shares outstanding - basic

     853       848       853       846  

Effect of dilutive securities:

                                

Stock options and other awards

     11       11       12       13  

Weighted-average common shares outstanding - diluted

     864       859       865       859  

Core earnings per share

   $ 0.47     $ 0.45     $ 0.85     $ 0.86  

 

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Reconciliation of Non-GAAP Measures


We utilize certain financial measures and key performance indicators that are not calculated in accordance with GAAP to assess our financial and operating performance. A non-GAAP financial measure is defined as a numerical measure of a company’s financial performance that (i) excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the comparable measure calculated and presented in accordance with GAAP in the consolidated statements of income or statements of cash flows, or (ii) includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the comparable measure as calculated and presented in accordance with GAAP in the consolidated statements of income or statements of cash flows.

 

Core net sales, core net income and core earnings per share are non-GAAP financial measures utilized by our management to analyze financial performance without the impact of items that are driven by general economic conditions and events that do not reflect the underlying fundamentals and trends in our operations.

 

The following tables reconcile our non-GAAP financial measures to their most directly comparable GAAP financial measure (amounts in millions, except percentages and per share amounts):

 

   

Three months ended June 30, 2024

  
                   

Net income

                  
                   

attributable

                  
   

Net

    

Income before

    

to Corning

    

Effective tax

    

Per

  
   

sales

    

income taxes

    

Incorporated

    

rate (a)(b)

    

share

  

As reported – GAAP

   $ 3,251     $ 172     $ 104       29.1 %   $ 0.12  

Constant-currency adjustment (1)

     353       267       193               0.22  

Translation gain on Japanese yen-denominated debt, net (2)

             (54 )     (41 )             (0.05 )

Translated earnings contract gain (3)

             (27 )     (21 )             (0.02 )

Acquisition-related costs (4)

             32       22               0.03  

Discrete tax items and other tax-related adjustments (5)

                     4               0.00  

Restructuring, impairment and other charges and credits (6)

             138       130               0.15  

Pension mark-to-market adjustment (7)

             3       3               0.00  

Loss on investments (8)

             7       6               0.01  

Loss on sale of assets (9)

             10       7               0.01  

Core performance measures

   $ 3,604     $ 548     $ 407       22.0 %   $ 0.47  

  

(a)  

Based upon statutory tax rates in the specific jurisdiction for each event.
(b) The calculation of the effective tax rate for GAAP and Core excludes net income attributable to non-controlling interest of approximately $18 million and $21 million, respectively.

 

   

Three months ended June 30, 2023

  
                   

Net income

                  
                   

attributable

                  
   

Net

    

Income before

    

to Corning

    

Effective tax

    

Per

  
   

sales

    

income taxes

    

Incorporated

    

rate (a)(b)

    

share

  

As reported - GAAP

   $ 3,243     $ 409     $ 281       25.9 %   $ 0.33  

Constant-currency adjustment (1)

     239       174       125               0.15  

Translation gain on Japanese yen-denominated debt, net (2)

             (109 )     (88 )             (0.10 )

Translated earnings contract gain (3)

             (116 )     (93 )             (0.11 )

Acquisition-related costs (4)

             32       25               0.03  

Discrete tax items and other tax-related adjustments (5)

                     31               0.04  

Restructuring, impairment and other charges and credits (6)

             137       109               0.13  

Pension mark-to-market adjustment (7)

             (21 )     (17 )             (0.02 )

Loss on investments (8)

             5       5               0.01  

Litigation, regulatory and other legal matters (10)

             12       10               0.01  

Core performance measures

   $ 3,482     $ 523     $ 388       21.5 %   $ 0.45  

  

(a)

Based upon statutory tax rates in the specific jurisdiction for each event.
(b) The calculation of the effective tax rate for GAAP and Core excludes net income attributable to non-controlling interest of approximately $22 million and $23 million, respectively.

 

See “Items Adjusted from GAAP Measures” for the descriptions of the footnoted reconciling items.

 

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Table of Contents

 

   

Six months ended June 30, 2024

  
                   

Net income

                  
                   

attributable

                  
   

Net

    

Income before

    

to Corning

    

Effective tax

    

Per

  
   

sales

    

income taxes

    

Incorporated

    

rate (a)(b)

    

share

  

As reported – GAAP

   $ 6,226     $ 468     $ 313       25.9 %   $ 0.36  

Constant-currency adjustment (1)

     636       493       365               0.42  

Translation gain on Japanese yen-denominated debt, net (2)

             (135 )     (103 )             (0.12 )

Translated earnings contract gain (3)

             (66 )     (51 )             (0.06 )

Acquisition-related costs (4)

             64       46               0.05  

Discrete tax items and other tax-related adjustments (5)

                     19               0.02  

Restructuring, impairment and other charges and credits (6)

             129       123               0.14  

Pension mark-to-market adjustment (7)

             14       11               0.01  

Loss on investments (8)

             12       11               0.01  

Loss on sale of assets (9)

             10       7               0.01  

Litigation, regulatory and other legal matters (10)

             (5 )     (4 )             (0.00 )

Core performance measures

   $ 6,862     $ 984     $ 737       21.2 %   $ 0.85  

  

(a)  

Based upon statutory tax rates in the specific jurisdiction for each event.
(b) The calculation of the effective tax rate for GAAP and Core excludes net income attributable to non-controlling interest of approximately $34 million and $38 million, respectively.

 

   

Six months ended June 30, 2023

  
                   

Net income

                  
                   

attributable

                  
   

Net

    

Income before

    

to Corning

    

Effective tax

    

Per

  
   

sales

    

income taxes

    

Incorporated

    

rate (a)(b)

    

share

  

As reported - GAAP

   $ 6,421     $ 637     $ 457       22.4 %   $ 0.53  

Constant-currency adjustment (1)

     428       323       239               0.28  

Translation gain on Japanese yen-denominated debt, net (2)

             (127 )     (102 )             (0.12 )

Translated earnings contract gain (3)

             (108 )     (87 )             (0.10 )

Acquisition-related costs (4)

             66       45               0.05  

Discrete tax items and other tax-related adjustments (5)

                     29               0.03  

Restructuring, impairment and other charges and credits (6)

             203       162               0.19  

Pension mark-to-market adjustment (7)

             (11 )     (9 )             (0.01 )

Loss on investments (8)

             9       9               0.01  

Gain on sale of assets (9)

             (20 )     (15 )             (0.02 )

Litigation, regulatory and other legal matters (10)

             12       10               0.01  

Core performance measures

   $ 6,849     $ 984     $ 738       20.5 %   $ 0.86  

  

(a)

Based upon statutory tax rates in the specific jurisdiction for each event.
(b) The calculation of the effective tax rate for GAAP and Core excludes net income attributable to non-controlling interest of approximately $37 million and $44 million, respectively.

 

See “Items Adjusted from GAAP Measures” for the descriptions of the footnoted reconciling items.

 

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Table of Contents

 

Items Adjusted from GAAP Measures

 

Items adjusted from GAAP measures to arrive at core performance measures are as follows:

 

(1)

Constant-currency adjustment: As a significant portion of revenues and expenses are denominated in currencies other than the U.S. dollar, management believes it is important to understand the impact on sales and net income of translating these currencies into U.S. dollars. The Company utilizes constant-currency reporting for Display Technologies, Specialty Materials, Environmental Technologies and Life Sciences segments for the Japanese yen, Korean won, Chinese yuan, New Taiwan dollar and euro, as applicable to the segment. In addition, effective January 1, 2024, the Company began utilizing constant-currency reporting for the Optical Communications segment to exclude the impact from the Mexican peso on segment results. Prior periods were not recast as the impact was not material.

 

The constant-currency rates established for our core performance measures are internally derived long-term management estimates, which are closely aligned with our hedging instrument rates. These hedging instruments may include, but are not limited to, foreign exchange forward or option contracts and foreign-denominated debt. For the six months ended June 30, 2024, the adjustment primarily relates to our Japanese yen exposure due to the difference in the average spot rate compared to our core rate.   

 

We believe that the use of constant-currency reporting allows management to understand our results without the volatility of currency fluctuation, analyze underlying trends in the businesses and establish operational goals and forecasts.

 

Constant-currency rates used are as follows and are applied to all periods presented and to all foreign exchange exposures during the period, even though we may be less than 100% hedged:
 

Currency

  

Japanese yen

  

Korean won

  

Chinese yuan

  

New Taiwan dollar

  

Euro

   Mexican peso
 

Rate

  

¥107

  

₩1,175

  

¥6.7

  

NT$31

  

€0.81

   MX$20
       

(2)

Translation of Japanese yen-denominated debt, net: Amount reflects the gain or loss on the translation of our yen-denominated debt to U.S. dollars, net of a $7 million loss for the three and six months ended June 30, 2024, related to the change in the fair value of our cross currency swap contracts.

(3)

Translated earnings contract: Amount reflects the impact of the realized and unrealized gains and losses from the Japanese yen, South Korean won, Chinese yuan, euro and New Taiwan dollar-denominated foreign currency hedges related to translated earnings, as well as the unrealized gains and losses of our British pound and Mexican peso-denominated foreign currency hedges related to translated earnings.

(4)

 Acquisition-related costs: Amount reflects intangible amortization, inventory valuation adjustments and external acquisition-related deal costs, as well as other transaction related costs.

(5)

Discrete tax items and other tax-related adjustments: Amount reflects certain discrete period tax items such as changes in tax law, the impact of tax audits, changes in tax reserves and changes in deferred tax asset valuation allowances, as well as other tax-related adjustments.
(6) Restructuring, impairment and other charges and credits: Amount reflects certain restructuring, impairment losses and other charges and credits, as well as other expenses, including severance, accelerated depreciation, asset write-offs and facility repairs resulting from power outages, which are not related to ongoing operations.
(7) Pension mark-to-market adjustment: Amount primarily reflects defined benefit pension mark-to-market gains and losses, which arise from changes in actuarial assumptions and the difference between actual and expected returns on plan assets and discount rates.
(8) Loss on investments: Amount reflects the loss recognized on investments due to mark-to-market adjustments for the change in fair value or the disposition of an investment.
(9) Loss (gain) on sale of assets: Amount represents the loss or gain recognized for the sale of assets.
(10) Litigation, regulatory and other legal matters: Amount reflects developments in commercial litigation, intellectual property disputes, adjustments to our estimated liability for environmental-related items and other legal matters.

 

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LIQUIDITY AND CAPITAL RESOURCES

 

Our financial condition and liquidity are strong. We are not aware of any known trends, demands, commitments, events or uncertainties that will result in or that are reasonably likely to result in a material decrease in our liquidity. In addition, other than items discussed, there are no known material trends, favorable or unfavorable, in our capital resources and no expected material changes in the mix of such resources.

 

Our major sources of funding for 2024 and beyond will be our operating cash flow, our existing balances of cash and cash equivalents and proceeds from any issuances of debt. We believe we have sufficient liquidity to fund operations and meet our obligations for the foreseeable future. Such obligations may include requirements for acquisitions, capital expenditures, debt repayments, dividend payments and share repurchases. We will continue to generate cash from operations and maintain access to our revolving credit facilities and commercial paper programs as discussed in more detail below.

 

Key Balance Sheet Data

 

We fund our working capital with cash from operations and, periodically, short-term and long-term borrowings. In addition, from time to time, we receive upfront cash from customers relating to long-term supply agreements, as well as cash incentives from government entities generally for capital expansion and related expenses.

 

The following table presents balance sheet and working capital measures (in millions):

 

   

June 30,

    

December 31,

  
   

2024

    

2023

  

Working capital

   $ 2,595     $ 2,893  

Current ratio

  

1.6:1

    

1.7:1

  

Trade accounts receivable, net of doubtful accounts

   $ 1,721     $ 1,572  

Days sales outstanding

     48       47  

Inventories

   $ 2,682     $ 2,666  

Inventory turns

     3.2       3.2  

Days payable outstanding (1)

     55       52  

Long-term debt

   $ 6,908     $ 7,206  

Total debt

   $ 7,284     $ 7,526  

Total debt to total capital

     40 %     39 %

 

(1) Includes trade payables only.

 

We perform comprehensive reviews of our significant customers and their creditworthiness by analyzing their financial strength at least annually or more frequently for customers where we have identified a measure of increased risk. We closely monitor payments and developments to identify potential customer credit issues. We are not aware of any customer credit issues that could have a material impact on our liquidity.

 

We participate in accounts receivable management programs, including factoring arrangements to sell certain accounts receivable to third-party financial institutions or accelerate collections through our customer’s supply chain financing arrangements. Sales of accounts receivable are reflected as a reduction of accounts receivable in the consolidated balance sheets and the proceeds are included in cash flows from operating activities in the consolidated statements of cash flows. By utilizing these types of programs, we have accelerated the collection of $380 million and $389 million of accounts receivable during the three months ended March 31, 2024 and June 30, 2024, respectively. We believe these accounts receivables would have been collected during the normal course of business in the following quarter.

 

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Cash Flows

 

The following table presents a summary of cash flow data (in millions):

 

   

Six months ended

  
   

June 30,

  
   

2024

    

2023

  

Net cash provided by operating activities

   $ 617     $ 570  

Net cash used in investing activities

   $ (338 )   $ (515 )

Net cash used in financing activities

   $ (612 )   $ (164 )

 

Net cash provided by operating activities for the six months ended June 30, 2024 increased $47 million when compared to the same period in the prior year primarily driven by improvements in working capital.

 

Net cash used in investing activities for the six months ended June 30, 2024 improved by $177 million when compared to the same period last year, primarily driven by lower capital expenditures of $276 million, partially offset by $67 million in proceeds from the sale of equipment in the prior period.

 

Net cash used in financing activities for the six months ended June 30, 2024 increased by $448 million when compared to the same period last year, primarily driven by the $918 million in proceeds from the issuance of euro-denominated notes in 2023, partially offset by $507 million in payments for the redemption of preferred stock in 2023. Additionally, we repurchased 3 million common shares for $105 million in 2024 compared to no share repurchases made in the same period last year.

 

Sources of Liquidity

 

As of June 30, 2024, our cash and cash equivalents and available credit capacity included (in millions):

 

   

June 30,

  
   

2024

  

Cash and cash equivalents

   $ 1,419  
         

Available credit capacity:

        

U.S. dollar revolving credit facility

   $ 1,500  

Chinese yuan facilities

   $ 150  

 

Cash and Cash Equivalents

 

As of June 30, 2024, we had $1.4 billion of cash and cash equivalents. Our cash and cash equivalents are held in various locations throughout the world and are generally unrestricted. We utilize a variety of strategies to ensure that our worldwide cash is available in the locations in which it is needed. As of June 30, 2024, approximately 48% of the consolidated cash and cash equivalents were held outside the U.S. 

 

As of December 31, 2023, Corning had approximately $1.4 billion of indefinitely reinvested foreign earnings. If we distribute our foreign cash balances to the U.S. or to other foreign subsidiaries, we could be required to accrue and pay withholding taxes. We do not foresee a need to repatriate any earnings for which we asserted permanent reinvestment. However, to help fund cash needs of the U.S. or other international subsidiaries as they arise, we repatriate available cash from certain foreign subsidiaries whose earnings are not permanently reinvested.

 

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Debt Facilities and Other Sources of Liquidity

 

We have a commercial paper program pursuant to which we may issue short-term, unsecured commercial paper notes up to a maximum aggregate principal amount outstanding at any one time of $1.5 billion. Under this program, we may issue commercial paper from time to time and will use the proceeds for general corporate purposes. As of June 30, 2024, we did not have outstanding commercial paper.

 

Our $1.5 billion Revolving Credit Agreement is available to support obligations under the commercial paper program and for general corporate purposes, if needed. As of June 30, 2024, there were no amounts outstanding under this facility.

 

Our Revolving Credit Agreement includes affirmative and negative covenants with which we must comply, including a leverage (debt to capital ratio) financial covenant. The required leverage ratio is a maximum of 60%. As of June 30, 2024, our leverage using this measure was approximately 40%. As of June 30, 2024, we were in compliance.

 

Our debt instruments contain customary event of default provisions, which allow the lenders the option of accelerating all obligations upon the occurrence of certain events. In addition, some of our debt instruments contain a cross default provision, whereby an uncured default exceeding a specified amount on one debt obligation, also would be considered a default under the terms of another debt instrument. As of June 30, 2024, we were in compliance with all such provisions.

 

We have access to certain Chinese yuan-denominated unsecured variable rate loan facilities, whose proceeds are used for capital investment and general corporate purposes. As of June 30, 2024, borrowings totaled $249 million and these facilities had variable interest rates ranging from 2.9% to 4.1% and maturities ranging from 2024 to 2032. As of June 30, 2024, Corning had 1.1 billion Chinese yuan of unused capacity, equivalent to approximately $150 million.

 

As a well-known seasoned issuer, we filed an automatic shelf registration with the SEC on December 1, 2023. Under this shelf registration we may offer, from time to time, debt securities, common stock, preferred stock, depositary shares and warrants.

 

On May 15, 2023, the Company issued €300 million 3.875% Notes due 2026 (“2026 Notes”) and €550 million 4.125% Notes due 2031 (“2031 Notes”). The proceeds from the 2026 Notes and 2031 Notes were received in euros and converted to U.S. dollars on the date of issuance. The net proceeds received were approximately $918 million and will be used for general corporate purposes. As of June 30, 2024, the U.S. dollar equivalent carrying value of the euro-denominated long-term debt was $903 million.

 

Uses of Cash

 

Share Repurchase Agreement

 

Pursuant to the Share Repurchase Agreement (“SRA”) with Samsung Display Co., Ltd. (“SDC”), SDC has the option to offer to sell 22 million common shares to Corning in specified tranches from time to time in calendar years 2024 through 2027. Corning may, at its sole discretion, elect to repurchase such common shares. If Corning elects not to repurchase the common shares and SDC sells the common shares on the open market, Corning will be required to pay SDC a make-whole payment, subject to a 5% cap of the repurchase proceeds that otherwise would have been paid by Corning. As of June 30, 2024 and December 31, 2023, the fair value of the liability associated with this option was not material. 

 

Refer to Note 14 (Shareholders’ Equity) in the notes to the consolidated financial statements within the 2023 Form 10-K for additional information.

 

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Share Repurchases

 

In 2019, the Board authorized the repurchase of up to $5.0 billion of common stock (“2019 Authorization”). As of June 30, 2024, approximately $3.2 billion remains available under our 2019 Authorization, which does not have an expiration date and may be amended or terminated by the Board of Directors at any time without prior notice.

 

During the three and six months ended June 30, 2024, the Company repurchased 3 million common shares for $105.4 million, pursuant to the terms of the SRA, as discussed above. No shares were repurchased under our 2019 Authorization during the three and six months ended June 30, 2023.

 

Common Stock Dividends

 

On June 26, 2024, Corning’s Board of Directors declared a quarterly dividend of $0.28 per share of common stock. The dividend will be payable on September 27, 2024. The Board’s decision to declare and pay future dividends will depend on our income and liquidity position, among other factors. We expect to declare quarterly dividends and fund payments with cash from operations.

 

Capital Expenditures

 

Capital expenditures were $0.5 billion for the six months ended June 30, 2024. We expect our 2024 full year capital expenditures to be lower than 2023.

 

Current Maturities of Short and Long-Term Debt

 

As of June 30, 2024, we had $376 million of long-term debt that is due in less than one year.

 

Refer to Note 10 (Debt) in the notes to the consolidated financial statements within the 2023 Form 10-K for additional information, including a summary of our debt maturities by year.

 

Defined Benefit Pension Plans

 

Our global pension plans, including our unfunded and non-qualified plans, were 81% funded as of December 31, 2023. Our largest single pension plan is our U.S. qualified plan, which accounted for 77% of our consolidated defined benefit pension plans’ projected benefit obligation, was 92% funded as of December 31, 2023. The funded status of our pension plans is dependent upon multiple factors including actuarial assumptions, interest rates at year-end, prior investment returns and contributions made to the plans.

 

During 2024, the Company anticipates making cash contributions of $11 million to its international pension plans.

 

Commitments, Contingencies and Guarantees

 

On March 12, 2024, Corning entered into a synthetic lease (“Facility Lease”) for a solar manufacturing facility in Hemlock, Michigan (the “Facility”), for which the Company is the construction agent on behalf of the lessor, with an estimated construction cost of approximately $835 million.

 

The Facility Lease will commence upon completion of construction of the Facility, which is expected to be in the later part of 2025, and has a lease term of five years with options to renew the lease or purchase the facility. The Facility Lease is expected to be classified as a finance lease and the amount of right-of-use asset and lease liability will be determined and recorded upon lease commencement. The estimated undiscounted lease payments, inclusive of a residual value guarantee, are approximately $1.1 billion, of which $35 million, $103 million, $99 million and $96 million is to be paid in 2025, 2026, 2027 and 2028, respectively, and $780 million is to be paid thereafter. 

 

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In conjunction with the Facility Lease, Corning entered into an equipment lease (“Equipment Lease”) on June 17, 2024, with an estimated purchase and installation cost of $365 million, for the equipment to be installed and operated within the Facility. The Company is the procurement and installation agent on behalf of the lessor.

 

The Equipment Lease will commence upon completion of the equipment installation, which is expected to be in the later part of 2025, and has a lease term of five years with obligations to purchase the equipment at lease maturity. The Equipment Lease is expected to be classified as a finance lease and the amount of right-of-use asset and lease liability will be determined and recorded upon lease commencement. The estimated undiscounted lease payments are approximately $446 million, of which $25 million, $100 million, $95 million and $89 million is to be paid in 2025, 2026, 2027 and 2028, respectively, and $137 million is to be paid thereafter.

 

The transaction agreements for both the Facility Lease and Equipment Lease contain covenants that are consistent with our Revolving Credit Agreement as disclosed in the 2023 Form 10-K. 

 

Other than the above matters, there were no material changes outside the ordinary course of business in the obligations disclosed in the 2023 Form 10-K under the caption “Commitments, Contingencies and Guarantees.” 

 

Off Balance Sheet Arrangements

 

There were no material changes outside the ordinary course of business in off balance sheet arrangements as disclosed in the 2023 Form 10-K under the caption “Off Balance Sheet Arrangements.”

 

 

ENVIRONMENT 

 

Refer to Item 1. Legal Proceedings or Note 11 (Commitments and Contingencies) in the accompanying notes to the consolidated financial statements for information.

 

 

CRITICAL ACCOUNTING ESTIMATES

 

Our consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America. This requires us to make estimates and assumptions that affect reported amounts and related disclosures. Actual results could differ from those estimates. The estimates that are considered by management to be the most critical to the understanding of the consolidated financial statements as they require significant judgments that could materially impact our results of operations, financial position and cash flows are described in Management’s Discussion and Analysis of Financial Condition and Results of Operations included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. Since the date of the Company’s most recent Annual Report, there were no material changes in the Company’s critical accounting estimates or assumptions.

 

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FORWARD-LOOKING STATEMENTS

 

The statements in this Quarterly Report on Form 10-Q, in reports subsequently filed by Corning with the Securities and Exchange Commission (“SEC”) on Forms 10-Q and 8-K and related comments by management that are not historical facts or information and contain words such as “will,” “believe,” “anticipate,” “expect,” “intend,” “plan,” “seek,” “see,” “would,” “target,” “estimate,” “forecast” or similar expressions are forward-looking statements. Such statements relate to future events that by their nature address matters that are, to different degrees, uncertain. These forward-looking statements relate to, among other things, the Company’s future operating performance, the Company’s share of new and existing markets, the Company’s revenue and earnings growth rates, the Company’s ability to innovate and commercialize new products, the Company’s expected capital expenditure and the Company’s implementation of cost-reduction initiatives and measures to improve pricing, including the optimization of the Company’s manufacturing capacity.

 

Although the Company believes that these forward-looking statements are based upon reasonable assumptions regarding, among other things, current estimates and forecasts, general economic conditions, its knowledge of its business and key performance indicators that impact the Company, there can be no assurance that these forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. The Company undertakes no obligation to update forward-looking statements if circumstances or management’s estimates or opinions should change except as required by applicable securities laws.

 

Some of the risks, uncertainties and other factors that could cause actual results to differ materially from those expressed in or implied by the forward-looking statements include, but are not limited to:

 

- global economic trends, competition and geopolitical risks, or an escalation of sanctions, tariffs or other trade tensions between the U.S. and China or other countries, and related impacts on our businesses’ global supply chains and strategies;

-

changes in macroeconomic and market conditions and market volatility, including developments and volatility arising from health crisis events, inflation, interest rates, the value of securities and other financial assets, precious metals, oil, natural gas, raw materials and other commodity prices and exchange rates (particularly between the U.S. dollar and the Japanese yen, New Taiwan dollar, euro, Chinese yuan and South Korean won), the availability of government incentives, decreases or sudden increases of consumer demand, and the impact of such changes and volatility on our financial position and businesses;

-

the duration and severity of health crisis events, such as an epidemic or pandemic, and its impact across our businesses on demand, personnel, operations, our global supply chains and stock price;

-

possible disruption in commercial activities or our supply chain due to terrorist activity, cyber-attack, armed conflict, political or financial instability, natural disasters, international trade disputes or major health concerns;

-

 loss of intellectual property due to theft, cyber-attack, or disruption to our information technology infrastructure;

-

 ability to enforce patents and protect intellectual property and trade secrets;

-

disruption to Corning’s, our suppliers’ and manufacturers’ supply chain, equipment, facilities, IT systems or operations;

-

 product demand and industry capacity;

-

 competitive products and pricing;

-

availability and costs of critical components, materials, equipment, natural resources and utilities;

-

 new product development and commercialization;

-

order activity and demand from major customers;
- the amount and timing of our cash flows and earnings and other conditions, which may affect our ability to pay our quarterly dividend at the planned level or to repurchase shares at planned levels;

-

the amount and timing of any future dividends;

-

 the effects of acquisitions, dispositions and other similar transactions;

-

 the effect of regulatory and legal developments;

-

 ability to pace capital spending to anticipated levels of customer demand;

-

 our ability to increase margins through implementation of operational changes, pricing actions and cost reduction measures;

-

rate of technology change;

-

adverse litigation;

-

product and component performance issues;

-

retention of key personnel;

-

customer ability to maintain profitable operations and obtain financing to fund ongoing operations and manufacturing expansions and pay receivables when due;

-

loss of significant customers;

-

changes in tax laws, regulations and international tax standards;
- the impacts of audits by taxing authorities; and

-

the potential impact of legislation, government regulations, and other government action and investigations.

 

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

 

As noted in the 2023 Form 10-K, we operate and conduct business in many foreign countries and as a result are exposed to movements in foreign currency exchange rates. Our exposure to exchange rates has the following effects:

 

● Exchange rate movements on financial instruments and transactions denominated in foreign currencies that impact earnings; and
● Exchange rate movements upon conversion of net assets and net income of foreign subsidiaries for which the functional currency is not the U.S. dollar.

 

For a discussion of the Company’s exposure to market risk and how we mitigate that risk, refer to Part II, Item 7A, Quantitative and Qualitative Disclosures About Market Risks, contained in the 2023 Form 10-K.

 

Item 4. Controls and Procedures

 

Disclosure Controls and Procedures

 

Under the supervision of and with the participation of Corning’s management, including the chief executive officer and chief financial officer, we evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended), as of June 30, 2024, the end of the period covered by this report. Based on that evaluation, we have concluded that the Company’s disclosure controls and procedures were effective as of that date. Corning’s disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by Corning in the reports that it files or submits under the Exchange Act is accumulated and communicated to Corning’s management, including Corning’s principal executive and principal financial officers, or other persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

 

Internal Control Over Financial Reporting

 

An evaluation of internal controls over financial reporting was performed to determine whether any changes have occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, the internal control over financial reporting. The chief executive officer and chief financial officer concluded that there was no change in Corning’s internal control over financial reporting that materially affected, or is reasonably likely to materially affect, internal control over financial reporting.  

 

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PART II

 

Item 1. Legal Proceedings

 

Corning is a defendant in various lawsuits and is subject to various claims that arise in the normal course of business, the most significant of which are summarized in Note 11 (Commitments and Contingencies) in the accompanying notes to the consolidated financial statements. In the opinion of management, the likelihood that the ultimate disposition of these matters will have a material adverse effect on the Company’s consolidated financial position, liquidity, or results of operations, is remote.

 

Item 1A. Risk Factors

 

In addition to other information set forth in this report, you should carefully consider the factors discussed in Part I, Item 1A. Risk Factors in Corning’s 2023 Form 10-K, which could materially impact the Company’s business, financial condition or future results. Risks disclosed in the 2023 Form 10-K are not the only risks facing the Company. Additional risks and uncertainties not currently known to us or that we currently deem immaterial may materially adversely impact Corning’s business, financial condition or operating results.

 

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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

 

This table provides information about purchases of common stock during the second quarter of 2024:

 

Issuer Purchases of Equity Securities

 

                           

Approximate

  
                   

Number of

    

dollar value of

  
                   

shares

    

shares that may

  
                   

purchased

    

be purchased

  
                   

as part of

    

under the

  
   

Total number

    

Average

    

publicly

    

publicly

  
   

of shares

    

price paid

    

announced

    

announced

  

Period

  

purchased (1)

    

per share (2)

    

programs

    

programs

  

April 1-30, 2024

     580,940     $ 31.42                  

May 1-31, 2024

     2,836       37.11                  

Shares repurchased (3)

     3,000,000       35.14       3,000,000          

June 1-30, 2024

     198,480       37.49                  

Total

     3,782,256     $ 34.69       3,000,000     $ 3,195,661,103  

 

(1)

 This column reflects: (i) 410,588 shares of common stock related to the vesting of employee restricted stock units; (ii) 303,055 shares of common stock related to the vesting of employee performance stock units; (iii) 68,478 shares of common stock related to the vesting of employee restricted stock; (iv) 135 shares of common stock related to the exercise of employee stock options and payment of the exercise price; and (v) the purchase of 3 million shares of common stock under the 2019 Repurchase Program.
(2) Represents the stock price at the time of surrender.
(3) Pursuant to the Share Repurchase Agreement dated April 5, 2021, 3 million shares were repurchased at $35.1401 per share. Refer to Note 13 (Shareholders’ Equity) to the consolidated financial statements for additional information.

 

 

Item 5. Other Information

 

During the three months ended June 30, 2024, none of our Section 16 reporting persons adopted, modified or terminated any contract, instruction or written plan for the purchase or sale of our securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any non-Rule 10b5-1 trading arrangement.

 

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Item 6. Exhibits

 

(a)

Exhibits

    
       
 

Exhibit Number

  

Exhibit Name
       
 

31.1

  

Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) under the Exchange Act
       
 

31.2

  

Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) under the Exchange Act
       
 

32

  

Certification Pursuant to 18 U.S.C. Section 1350
       
 

101.INS

  

Inline XBRL Instance Document
       
 

101.SCH

  

Inline XBRL Taxonomy Extension Schema Document
       
 

101.CAL

  

Inline XBRL Taxonomy Calculation Linkbase Document
       
 

101.LAB

  

Inline XBRL Taxonomy Label Linkbase Document
       
 

101.PRE

  

Inline XBRL Taxonomy Presentation Linkbase Document
       
 

101.DEF

  

Inline XBRL Taxonomy Definition Document
       
  104   Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

 

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Table of Contents

 

Signatures

 

Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

     

Corning Incorporated

  
     

(Registrant)

  
         
         
         
 

August 2, 2024

  

/s/ Stefan Becker

  
 

Date

  

Stefan Becker

  
     

Senior Vice President and Corporate Controller

  

 

44

Exhibit 31.1

 

CHIEF EXECUTIVE OFFICER CERTIFICATION

 

I, Wendell P. Weeks, certify that:

 

1.

I have reviewed this Quarterly Report on Form 10-Q of Corning Incorporated;

 

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4.

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

 

a)

designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

 

b)

designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

 

c)

evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

 

d)

disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

 

a)

all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

 

b)

any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

August 2, 2024

 

 

/s/ Wendell P. Weeks

  

Wendell P. Weeks

  

Chairman and Chief Executive Officer

  

(Principal Executive Officer)

  

 

 

Exhibit 31.2

 

CHIEF FINANCIAL OFFICER CERTIFICATION

 

I, Edward A. Schlesinger, certify that:

 

1.

I have reviewed this Quarterly Report on Form 10-Q of Corning Incorporated;

 

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4.

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

 

a)

designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

 

b)

designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

 

c)

evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

 

d)

disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

 

a)

all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

 

b)

any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

August 2, 2024

 

 

/s/ Edward A. Schlesinger

  

Edward A. Schlesinger

  

Executive Vice President and Chief Financial Officer

  

(Principal Financial Officer)

  

 

 

Exhibit 32

 

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

 

In connection with the Quarterly Report of Corning Incorporated (the Company) on Form 10-Q for the period ended June 30, 2024, as filed with the Securities and Exchange Commission on the date hereof (the Report), we, Wendell P. Weeks, Chairman and Chief Executive Officer and Edward A. Schlesinger, Executive Vice President and Chief Financial Officer, of the Company, certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that:

 

(1)

The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

 

(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

 

Dated:  August 2, 2024

 

 

 

 

/s/ Wendell P. Weeks

  

Wendell P. Weeks

  

Chairman and Chief Executive Officer

  

 

 

 

/s/ Edward A. Schlesinger

  

Edward A. Schlesinger

  

Executive Vice President and Chief Financial Officer

  

 

 

 
v3.24.2.u1
Document And Entity Information - shares
 6 Months Ended
Jun. 30, 2024
Jul. 25, 2024
Document Information [Line Items]    
Entity Central Index Key 0000024741  
Entity Registrant Name CORNING INC /NY  
Amendment Flag false  
Current Fiscal Year End Date --12-31  
Document Fiscal Period Focus Q2  
Document Fiscal Year Focus 2024  
Document Type 10-Q  
Document Quarterly Report true  
Document Period End Date Jun. 30, 2024  
Document Transition Report false  
Entity File Number 1-3247  
Entity Incorporation, State or Country Code NY  
Entity Tax Identification Number 16-0393470  
Entity Address, Address Line One One Riverfront Plaza  
Entity Address, City or Town Corning  
Entity Address, State or Province NY  
Entity Address, Postal Zip Code 14831  
City Area Code 607  
Local Phone Number 974-9000  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Large Accelerated Filer  
Entity Small Business false  
Entity Emerging Growth Company false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   855,700,821
The 4.125% Notes Due 2031 [Member]    
Document Information [Line Items]    
Title of 12(b) Security 4.125% Notes due 2031  
Trading Symbol GLW31  
Security Exchange Name NYSE  
The 3.875% Notes Due 2026 [Member]    
Document Information [Line Items]    
Title of 12(b) Security 3.875% Notes due 2026  
Trading Symbol GLW26  
Security Exchange Name NYSE  
Common Stock [Member]    
Document Information [Line Items]    
Title of 12(b) Security Common Stock, $0.50 par value per share  
Trading Symbol GLW  
Security Exchange Name NYSE  
v3.24.2.u1
Consolidated Statements of Income (Unaudited) - USD ($)
$ in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Net sales $ 3,251 $ 3,243 $ 6,226 $ 6,421
Cost of sales 2,302 2,230 4,284 4,405
Gross margin 949 1,013 1,942 2,016
Operating expenses:        
Selling, general and administrative expenses 471 440 922 861
Research, development and engineering expenses 262 263 520 517
Amortization of purchased intangibles 30 31 60 62
Operating income 186 279 440 576
Interest income 10 8 22 15
Interest expense (84) (81) (167) (157)
Translated earnings contract gain, net (Note 12) 27 116 66 108
Other income, net 33 87 107 95
Income before income taxes 172 409 468 637
Provision for income taxes (Note 4) (50) (106) (121) (143)
Net income 122 303 347 494
Net income attributable to non-controlling interest (18) (22) (34) (37)
Net income attributable to Corning Incorporated $ 104 $ 281 $ 313 $ 457
Earnings per common share available to common shareholders:        
Basic (Note 5) (in dollars per share) $ 0.12 $ 0.33 $ 0.37 $ 0.54
Diluted (Note 5) (in dollars per share) $ 0.12 $ 0.33 $ 0.36 $ 0.53
v3.24.2.u1
Consolidated Statements of Comprehensive (Loss) Income (Unaudited) - USD ($)
$ in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Net income $ 122 $ 303 $ 347 $ 494
Foreign currency translation adjustments and other (222) (318) (552) (402)
Unamortized gain (losses) and prior service costs for postretirement benefit plans 37 (4) 39 (8)
Realized and unrealized (losses) gains on derivatives (32) 20 (31) 41
Other comprehensive loss, net of tax (217) (302) (544) (369)
Comprehensive (loss) income (95) 1 (197) 125
Comprehensive income attributable to non-controlling interest (18) (22) (34) (37)
Comprehensive (loss) income attributable to Corning Incorporated $ (113) $ (21) $ (231) $ 88
v3.24.2.u1
Consolidated Balance Sheets (Unaudited) - USD ($)
$ in Millions
Jun. 30, 2024
Dec. 31, 2023
Current assets:    
Cash and cash equivalents $ 1,419 $ 1,779
Trade accounts receivable, net of doubtful accounts - $31 and $30 1,721 1,572
Inventories (Note 6) 2,682 2,666
Other current assets 1,299 1,195
Total current assets 7,121 7,212
Property, plant and equipment, net of accumulated depreciation - $14,562 and $14,553 13,742 14,630
Goodwill 2,365 2,380
Other intangible assets, net 836 905
Deferred income taxes (Note 4) 1,134 1,153
Other assets 1,981 2,220
Total Assets 27,179 28,500
Current liabilities:    
Current portion of long-term debt and short-term borrowings 376 320
Accounts payable 1,466 1,466
Other accrued liabilities (Notes 7 and 11) 2,684 2,533
Total current liabilities 4,526 4,319
Long-term debt (Note 8) 6,908 7,206
Postretirement benefits other than pensions (Note 9) 360 398
Other liabilities (Notes 7 and 11) 4,458 4,709
Total liabilities 16,252 16,632
Commitments and contingencies (Note 11)
Shareholders’ equity (Note 13):    
Common stock – Par value $0.50 per share; Shares authorized 3.8 billion; Shares issued: 1.8 billion and 1.8 billion 919 916
Additional paid-in capital – common stock 17,081 16,929
Retained earnings 15,976 16,391
Treasury stock, at cost; Shares held: 985 million and 980 million (20,799) (20,637)
Accumulated other comprehensive loss (2,592) (2,048)
Total Corning Incorporated shareholders’ equity 10,585 11,551
Non-controlling interest 342 317
Total equity 10,927 11,868
Total Liabilities and Equity $ 27,179 $ 28,500
v3.24.2.u1
Consolidated Balance Sheets (Unaudited) (Parentheticals) - USD ($)
shares in Millions, $ in Millions
Jun. 30, 2024
Dec. 31, 2023
Doubtful accounts and allowances $ 31 $ 30
Accumulated depreciation $ 14,562 $ 14,553
Common stock, par value (in dollars per share) $ 0.5 $ 0.5
Common stock, shares authorized (in shares) 3,800 3,800
Common stock, shares issued (in shares) 1,800 1,800
Treasury stock Shares (in shares) 985 980
v3.24.2.u1
Consolidated Statements of Cash Flows (Unaudited) - USD ($)
$ in Millions
 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Cash Flows from Operating Activities:    
Net income $ 347 $ 494
Adjustments to reconcile net income to net cash provided by operating activities:    
Depreciation 614 622
Amortization of purchased intangibles 60 62
Loss on disposal of assets, net 126 23
Share-based compensation expense 126 111
Translation gain on Japanese yen-denominated debt (135) (127)
Deferred tax provision (benefit) 1 (10)
Translated earnings contract gain, net (66) (108)
Tax deposit refund 99
Changes in assets and liabilities:    
Trade accounts receivable (284) (64)
Inventories (89) 58
Other current assets (16) (49)
Accounts payable and other current liabilities (52) (416)
Customer deposits and government incentives (18) (6)
Deferred income (70) (24)
Other, net 73 (95)
Net cash provided by operating activities 617 570
Cash Flows from Investing Activities:    
Capital expenditures (494) (770)
Proceeds from sale of equipment to related party 67
Realized gains on translated earnings contracts and other 168 177
Other, net (12) 11
Net cash used in investing activities (338) (515)
Cash Flows from Financing Activities:    
Repayments of debt (42) (73)
Proceeds from issuance of debt 20
Proceeds from issuance of euro bonds 918
Proceeds from other financing arrangements 54
Payment for redemption of preferred stock (507)
Payments of employee withholding tax on stock awards (58) (99)
Proceeds from exercise of stock options 34 35
Purchases of common stock for treasury (105)
Dividends paid (495) (495)
Other, net (14) (17)
Net cash used in financing activities (612) (164)
Effect of exchange rates on cash (27) (24)
Net decrease in cash and cash equivalents (360) (133)
Cash and cash equivalents at beginning of period 1,779 1,671
Cash and cash equivalents at end of period 1,419 1,538
Currency Swap [Member]    
Cash Flows from Financing Activities:    
Proceeds from cross currency swap $ 68
v3.24.2.u1
Consolidated Statements of Changes In Shareholders' Equity (Unaudited) - USD ($)
$ in Millions
Common Stock [Member]
Additional Paid-in Capital [Member]
Retained Earnings [Member]
Treasury Stock, Common [Member]
AOCI Attributable to Parent [Member]
Parent [Member]
Noncontrolling Interest [Member]
Total
Balance at Dec. 31, 2022 $ 910 $ 16,682 $ 16,778 $ (20,532) $ (1,830) $ 12,008 $ 267 $ 12,275
Net income (loss)     176     176 15 191
Other comprehensive loss         (67) (67)   (67)
Shares issued to benefit plans and for option exercises 1 64       65   65
Common dividends     (241)     (241)   (241)
Other, net (1) [1]       (16)   (16)   (16)
Balance at Mar. 31, 2023 911 16,746 16,713 (20,548) (1,897) 11,925 282 12,207
Balance at Dec. 31, 2022 910 16,682 16,778 (20,532) (1,830) 12,008 267 12,275
Net income (loss)               494
Balance at Jun. 30, 2023 915 16,817 16,509 (20,630) (2,199) 11,412 298 11,710
Balance at Mar. 31, 2023 911 16,746 16,713 (20,548) (1,897) 11,925 282 12,207
Net income (loss) 281 281 22 303
Other comprehensive loss (302) (302) (1) (303)
Shares issued to benefit plans and for option exercises 4 71 75 75
Common dividends (485) (485) (485)
Other, net (1) [1] (82) (82) (5) (87)
Balance at Jun. 30, 2023 915 16,817 16,509 (20,630) (2,199) 11,412 298 11,710
Balance at Dec. 31, 2023 916 16,929 16,391 (20,637) (2,048) 11,551 317 11,868
Net income (loss)     209     209 16 225
Other comprehensive loss         (327) (327) (1) (328)
Shares issued to benefit plans and for option exercises 1 69       70   70
Common dividends     (242)     (242)   (242)
Other, net (1) [1]       (35)   (35) 1 (34)
Balance at Mar. 31, 2024 917 16,998 16,358 (20,672) (2,375) 11,226 333 11,559
Balance at Dec. 31, 2023 916 16,929 16,391 (20,637) (2,048) 11,551 317 11,868
Net income (loss)               347
Balance at Jun. 30, 2024 919 17,081 15,976 (20,799) (2,592) 10,585 342 10,927
Balance at Mar. 31, 2024 917 16,998 16,358 (20,672) (2,375) 11,226 333 11,559
Net income (loss)     104     104 18 122
Other comprehensive loss         (217) (217)   (217)
Shares issued to benefit plans and for option exercises 2 83       85   85
Common dividends     (486)     (486)   (486)
Other, net (1) [1]       (24)   (24) (9) (33)
Purchase of common stock for treasury       (103)   (103)   (103)
Balance at Jun. 30, 2024 $ 919 $ 17,081 $ 15,976 $ (20,799) $ (2,592) $ 10,585 $ 342 $ 10,927
[1] Treasury stock includes the deemed surrender to the Company of common stock to satisfy employee tax withholding obligations.
v3.24.2.u1
Consolidated Statements of Changes In Shareholders' Equity (Unaudited) (Parentheticals) - $ / shares
 3 Months Ended
Jun. 30, 2024
Mar. 31, 2024
Jun. 30, 2023
Mar. 31, 2023
Common Dividends (in dollars per share) $ 0.56 $ 0.28 $ 0.56 $ 0.28
v3.24.2.u1
Note 1 - Summary of Significant Accounting Policies
 6 Months Ended
Jun. 30, 2024
Notes to Financial Statements  
Significant Accounting Policies [Text Block]

1. Summary of Significant Accounting Policies

 

Basis of Presentation and Principles of Consolidation

 

In these notes, the terms “Corning,” “Company,” “we,” “us,” or “our” mean Corning Incorporated and its subsidiary companies.

 

The consolidated financial statements include the consolidated accounts of Corning Incorporated and its subsidiaries consolidated in conformity with accounting principles generally accepted in the United States of America (“GAAP”). In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments, which include normal recurring adjustments, necessary to state fairly the financial position, results of operations and cash flows for the periods presented. All intercompany accounts, transactions and profits have been eliminated. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been omitted pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”). These consolidated financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 (“2023 Form 10-K”). The results of operations for the interim periods are not necessarily indicative of results which may be expected for any other interim period or for the full year.

 

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses and the disclosure of contingent assets and liabilities in the consolidated financial statements and related notes. Significant estimates and assumptions in these consolidated financial statements require the exercise of judgment. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may be different from these estimates. 

 

The non-controlling interest as recorded in the consolidated financial statements represents amounts attributable to the minority shareholders of Hemlock Semiconductor Group (“HSG”) and other less-than-wholly-owned consolidated subsidiaries.

 

Certain prior year amounts have been reclassified to conform to the current year presentation. These reclassifications had no material impact on the results of operations, financial position or changes in shareholders’ equity.

 
v3.24.2.u1
Note 2 - Restructuring, Impairment and Other Charges and Credits
 6 Months Ended
Jun. 30, 2024
Notes to Financial Statements  
Restructuring and Related Activities Disclosure [Text Block]

2. Restructuring, Impairment and Other Charges and Credits

 

During the three and six months ended June 30, 2024, we recorded $138 million and $129 million, respectively, in restructuring, impairment and other charges and credits, of which $141 million and $121 million, respectively, were reflected in cost of sales in the consolidated statements of income, primarily relating to asset write-offs in Q2 associated with the closure of a display manufacturing plant. Should the entity be substantially liquidated, the Company expects to recognize approximately $72 million of non-cash foreign currency translation losses.

 

There were no material restructuring, impairment and other charges and credits for the three and six months ended June 30, 2023.

 
v3.24.2.u1
Note 3 - Revenue
 6 Months Ended
Jun. 30, 2024
Notes to Financial Statements  
Revenue from Contract with Customer [Text Block]

3. Revenue

 

Disaggregated Revenue

 

The following table presents revenues by product category (in millions):

 

  

Three months ended

  

Six months ended

 
  

June 30,

  

June 30,

 
  

2024

  

2023

  

2024

  

2023

 

Telecommunication products

 $1,113  $1,066  $2,043  $2,191 

Display products

  704   725   1,336   1,334 

Specialty glass products

  497   420   947   824 

Environmental substrate and filter products

  404   433   831   840 

Life science products

  237   222   462   469 

Polycrystalline silicon products

  199   258   415   535 

All other products

  97   119   192   228 

Total revenue

 $3,251  $3,243  $6,226  $6,421 

 

Customer Deposits

 

As of June 30, 2024 and December 31, 2023, Corning had customer deposits of approximately $1.2 billion. Most of these customer deposits were non-refundable and allowed customers to secure rights to products produced by Corning under long-term supply agreements, generally over a period of up to ten years. As products are delivered to customers, Corning will recognize revenue and reduce the amount of the customer deposit liability.

 

For the three months ended  June 30, 2024 and 2023, customer deposits recognized were $11 million and $12 million, respectively. For the six months ended  June 30, 2024 and 2023, customer deposits recognized were $91 million and $82 million, respectively.

 

Refer to Note 7 (Other Liabilities) for additional information. 

 

Deferred Revenue

 

As of June 30, 2024 and December 31, 2023, Corning had deferred revenue of approximately $790 million and $860 million, respectively. Deferred revenue was primarily related to the performance obligations of non-refundable consideration previously received by HSG from its customers under long-term supply agreements.  

 

Deferred revenue is tracked on a per-customer contract-unit basis. As customers take delivery of the committed volumes under the terms of the contract, a per-unit amount of deferred revenue is recognized when control of the promised goods is transferred to the customer based upon the units delivered compared to the remaining contractual units. For the three and six months ended  June 30, 2024 and 2023, the amount of deferred revenue recognized in the consolidated statements of income was not material.

 

Refer to Note 7 (Other Liabilities) for additional information.  

 
v3.24.2.u1
Note 4 - Income Taxes
 6 Months Ended
Jun. 30, 2024
Notes to Financial Statements  
Income Tax Disclosure [Text Block]

4. Income Taxes

 

The following table presents the provision for income taxes and the related effective tax rate (in millions, except percentages):

 

  

Three months ended

  

Six months ended

 
  

June 30,

  

June 30,

 
  

2024

  

2023

  

2024

  

2023

 

Provision for income taxes

 $(50) $(106) $(121) $(143)

Effective tax rate

  29.1%  25.9%  25.9%  22.4%

 

For the three and six months ended  June 30, 2024, the effective tax rate differed from the United States (“U.S.”) statutory rate of 21%, primarily due to certain pre-tax losses with no corresponding expected tax benefit. These losses were mostly driven by asset write-offs associated with the closure of a display manufacturing plant. Refer to Note 2 (Restructuring, Impairment and Other Charges and Credits) for additional information. 

 

For the three and six months ended  June 30, 2023, the effective tax rate differed from the U.S. statutory rate of 21%, primarily due to changes in valuation allowance assessments, partially offset by differences arising from foreign earnings, adjustments to share-based compensation, and a net benefit due to foreign derived intangible income.

 

Corning Precision Materials, a South Korean subsidiary, is currently appealing certain tax assessments and tax refund claims for tax years 2010 through 2019. The Company was required to deposit the disputed tax amounts with the South Korean government as a condition of its appeal of any tax assessment. During the second quarter of 2023, $99 million was no longer under dispute and was refunded to the Company. The non-current receivable balance was $256 million and $261 million as of  June 30, 2024 and  December 31, 2023, respectively, for the amount on deposit with the South Korean government. Corning believes that it is more likely than not the Company will prevail in the appeals process relating to these matters.
v3.24.2.u1
Note 5 - Earnings Per Common Share
 6 Months Ended
Jun. 30, 2024
Notes to Financial Statements  
Earnings Per Share [Text Block]

5. Earnings Per Common Share

 

The following table presents the reconciliation of the amounts used to compute basic and diluted earnings per common share (in millions, except per share amounts):

 

  

Three months ended

  

Six months ended

 
  

June 30,

  

June 30,

 
  

2024

  

2023

  

2024

  

2023

 

Net income attributable to Corning Incorporated

 $104  $281  $313  $457 
                 

Weighted-average common shares outstanding – basic

  853   848   853   846 

Effect of dilutive securities:

                

Stock options and other awards

  11   11   12   13 

Weighted-average common shares outstanding – diluted

  864   859   865   859 

Basic earnings per common share

 $0.12  $0.33  $0.37  $0.54 

Diluted earnings per common share

 $0.12  $0.33  $0.36  $0.53 
                 

Anti-dilutive potential shares excluded from diluted earnings per common share:

                

Stock options and other awards

  3   3   4   3 

 
v3.24.2.u1
Note 6 - Inventories
 6 Months Ended
Jun. 30, 2024
Notes to Financial Statements  
Inventory Disclosure [Text Block]

6. Inventories

 

Inventories consisted of the following (in millions):

 

  

June 30,

  

December 31,

 
  

2024

  

2023

 

Finished goods

 $1,303  $1,242 

Work in process

  546   551 

Raw materials and accessories

  426   445 

Supplies and packing materials

  407   428 

Inventories

 $2,682  $2,666 

 
v3.24.2.u1
Note 7 - Other Liabilities
 6 Months Ended
Jun. 30, 2024
Notes to Financial Statements  
Other Liabilities Disclosure [Text Block]

7. Other Liabilities

 

Other liabilities consisted of the following (in millions):

 

  

June 30,

  

December 31,

 
  

2024

  

2023

 

Current liabilities:

        

Wages and employee benefits

 $569  $609 

Income taxes

  67   69 

Derivative instruments (Note 12)

  179   66 

Dividend payable (Note 13)

  261   21 

Deferred revenue (Note 3)

  193   181 

Customer deposits (Note 3)

  178   148 

Short-term operating leases

  92   112 

Other current liabilities

  1,145   1,327 

Other accrued liabilities

 $2,684  $2,533 
         

Non-current liabilities:

        

Defined benefit pension plan liabilities

 $724  $721 

Derivative instruments (Note 12)

  156   31 

Deferred revenue (Note 3)

  597   679 

Customer deposits (Note 3)

  986   1,083 

Deferred tax liabilities

  167   218 

Long-term operating leases

  821   846 

Other non-current liabilities

  1,007   1,131 

Other liabilities

 $4,458  $4,709 

 
v3.24.2.u1
Note 8 - Debt
 6 Months Ended
Jun. 30, 2024
Notes to Financial Statements  
Debt Disclosure [Text Block]

8. Debt

 

Based on borrowing rates currently available to us for loans with similar terms and maturities, the fair value of long-term debt was $6.5 billion and $7.0 billion as of  June 30, 2024 and December 31, 2023, respectively, compared to the carrying value of $6.9 billion and $7.2 billion as of  June 30, 2024 and December 31, 2023, respectively. The Company measures the fair value of its long-term debt using Level 2 inputs based primarily on current market yields for its existing debt traded in the secondary market.

 

In Q2 2024, the Company entered into a ¥23 billion, or $215 million, fixed rate, three-year cross currency swap contract to economically lock in unrealized foreign exchange gains relating to a portion of the Company’s Japanese yen-denominated debt due in 2027. Refer to Note 12 (Financial Instruments) for additional information.

 

On May 15, 2023, the Company issued €300 million 3.875% Notes due 2026 (“2026 Notes”) and €550 million 4.125% Notes due 2031 (“2031 Notes”). The proceeds from the 2026 Notes and 2031 Notes were received in euros and converted to U.S. dollars on the date of issuance. The net proceeds received were approximately $918 million and will be used for general corporate purposes. As of June 30, 2024, the U.S. dollar equivalent carrying value of the euro-denominated long-term debt was $903 million. The full amounts of the 2026 Notes and 2031 Notes have been designated as net investment hedges against our investments in certain European subsidiaries with euro functional currencies. Refer to Note 12 (Financial Instruments) for additional information.

 
v3.24.2.u1
Note 9 - Employee Retirement Plans
 6 Months Ended
Jun. 30, 2024
Notes to Financial Statements  
Retirement Benefits [Text Block]

9. Employee Retirement Plans

 

The following table presents the components of net periodic pension and postretirement benefit expense (income) for employee retirement plans, which other than the service cost component is recorded in other income, net in the consolidated statements of income (in millions):

 

  

Pension benefits

  

Postretirement benefits

 
  

Three months ended

  

Six months ended

  

Three months ended

  

Six months ended

 
  

June 30,

  

June 30,

  

June 30,

  

June 30,

 
  

2024

  

2023

  

2024

  

2023

  

2024

  

2023

  

2024

  

2023

 

Service cost

 $25  $27  $48  $50  $1  $2  $2  $3 

Interest cost

  46   43   92   88   5   5   10   11 

Expected return on plan assets

  (48)  (46)  (96)  (92)                

Amortization of actuarial net gain

                  (7)  (6)  (12)  (11)

Amortization of prior service cost (credit)

  2   1   3   3   (2)  (1)  (4)  (2)

Special termination benefit charge

  3   5   3   5                 

Total pension and postretirement benefit expense (income)

 $28  $30  $50  $54  $(3) $—  $(4) $1 

 
v3.24.2.u1
Note 10 - Leases
 6 Months Ended
Jun. 30, 2024
Notes to Financial Statements  
Lessee, Operating And Finance Leases [Text Block]

10. Leases

 

On March 12, 2024, Corning entered into a synthetic lease (“Facility Lease”) for a solar manufacturing facility in Hemlock, Michigan (the “Facility”), for which the Company is the construction agent on behalf of the lessor, with an estimated construction cost of approximately $835 million.

 

The Facility Lease will commence upon completion of construction of the Facility, which is expected to be in the later part of 2025, and has a lease term of five years with options to renew the lease or purchase the facility. The Facility Lease is expected to be classified as a finance lease and the amount of right-of-use asset and lease liability will be determined and recorded upon lease commencement. The estimated undiscounted lease payments, inclusive of a residual value guarantee, are approximately $1.1 billion, of which $35 million, $103 million, $99 million and $96 million is to be paid in 2025, 2026, 2027 and 2028, respectively, and $780 million is to be paid thereafter. 

 

In conjunction with the Facility Lease, Corning entered into an equipment lease (“Equipment Lease”) on June 17, 2024, with an estimated purchase and installation cost of $365 million, for the equipment to be installed and operated within the Facility. The Company is the procurement and installation agent on behalf of the lessor.

 

The Equipment Lease will commence upon completion of the equipment installation, which is expected to be in the later part of 2025, and has a lease term of five years with obligations to purchase the equipment at lease maturity. The Equipment Lease is expected to be classified as a finance lease and the amount of right-of-use asset and lease liability will be determined and recorded upon lease commencement. The estimated undiscounted lease payments are approximately $446 million, of which $25 million, $100 million, $95 million and $89 million is to be paid in 2025, 2026, 2027 and 2028, respectively, and $137 million is to be paid thereafter.

 

The transaction agreements for both the Facility Lease and Equipment Lease contain covenants that are consistent with our Revolving Credit Agreement as disclosed in the 2023 Form 10-K.

 
v3.24.2.u1
Note 11 - Commitments and Contingencies
 6 Months Ended
Jun. 30, 2024
Notes to Financial Statements  
Commitments and Contingencies Disclosure [Text Block]

11. Commitments and Contingencies

 

Corning is a defendant in various lawsuits and is subject to various claims that arise in the normal course of business, the most significant of which are summarized below. In the opinion of management, the likelihood that the ultimate disposition of these matters will have a material adverse effect on Corning’s consolidated financial position, liquidity or results of operations, is remote.

 

Dow Corning Chapter 11 Related Matters

 

Until June 1, 2016, Corning and The Dow Chemical Company (“Dow”) each owned 50% of the common stock of Dow Corning Corporation (“Dow Corning”). On May 31, 2016, Corning and Dow realigned their ownership interest in Dow Corning. Following the realignment, Corning no longer owned any interest in Dow Corning. With the realignment, Corning agreed to indemnify Dow for 50% of Dow Corning’s non-ordinary course, pre-closing liabilities to the extent such liabilities exceed the amounts reserved for them by Dow Corning as of May 31, 2016, subject to certain conditions and limits. In January 2024, we entered into an agreement to settle the Dow Corning Chapter 11 Related Matters and the settlement amount was not material.

 

Dow Corning Environmental Claims

 

Beginning in September 2019, Dow formally notified Corning of certain environmental matters for which Dow asserts that it has or will experience losses arising from remediation and response at a number of sites. Subject to certain conditions and limits, Corning may be required to indemnify Dow for up to 50% of such losses. As of June 30, 2024, Corning has determined a potential liability for these environmental matters is probable and the amount reserved was not material.

 

Environmental Litigation

 

Corning has been designated by federal or state governments under environmental laws, including Superfund, as a potentially responsible party that may be liable for cleanup costs associated with 19 hazardous waste sites. It is Corning’s policy to accrue for its estimated liability related to such hazardous waste sites and other environmental liabilities related to property owned by Corning based on expert analysis and continual monitoring by both internal and external consultants. As of  June 30, 2024 and December 31, 2023, Corning had accrued approximately $83 million and $88 million, respectively, for the estimated undiscounted liability for environmental cleanup and related litigation. Based upon the information developed to date, management believes that the accrued reserve is a reasonable estimate of the Company’s liability.

 
v3.24.2.u1
Note 12 - Financial Instruments
 6 Months Ended
Jun. 30, 2024
Notes to Financial Statements  
Derivative Instruments and Hedging Activities Disclosure [Text Block]

12. Financial Instruments

 

The following table summarizes the notional amounts and respective fair values of Corning’s derivative financial instruments on a gross basis (in millions):

 

  

June 30, 2024

  

December 31, 2023

 
  

Notional amount

  

Fair value asset (1)

  

Fair value liability (1)

  

Notional amount

  

Fair value asset (1)

  

Fair value liability (1)

 

Derivatives designated as hedging
  instruments (2):

                        

Foreign exchange and precious
  metals lease contracts (3)

 $721  $179  $(19) $241  $287     
                         

Derivatives not designated as hedging
    instruments:

                        

Foreign exchange contracts

  1,964   22   (34)  1,988   20  $(17)

Translated earnings contracts

  5,437   406   (207)  5,042   324   (80)

Cross currency swap contracts

  215       (75)            

Total derivatives

 $8,337  $607  $(335) $7,271  $631  $(97)
                         

Current

     $520  $(179)     $501  $(66)

Non-current

      87   (156)      130   (31)

Total derivatives

     $607  $(335)     $631  $(97)

 

(1)All of the Company’s derivative contracts are measured at fair value and are classified as Level 2 within the fair value hierarchy. Derivative assets are presented in Other current assets or Other assets. Derivative liabilities are presented in Other current liabilities or Other liabilities.
(2)The amounts above do not include €850 million of euro-denominated debt ($903 million carrying value as of June 30, 2024), which is a non-derivative financial instrument designated as a net investment hedge.
(3)As of  June 30, 2024 and December 31, 2023, derivatives designated as hedging instruments include foreign exchange cash flow hedges with total notional amounts of $721 million and $241 million, respectively, and fair value hedges of leased precious metals with total notional amounts of 13,762 troy ounces and 20,160 troy ounces, respectively. Fair value assets include designated derivatives pertaining to precious metals lease contracts in the amounts of $146 million and $229 million as of  June 30, 2024 and December 31, 2023, respectively.

 

The following table summarizes the total gross notional values for translated earnings contracts (in millions):

 

  

June 30,

  

December 31,

 
  

2024

  

2023

 

Average rate forward contracts:

        

Chinese yuan-denominated

 $748  $684 

Japanese yen-denominated

  358   463 

South Korean won-denominated

  1,301   1,609 

New Taiwan dollar-denominated

  423   198 

Other foreign currencies (1)

  336    

Option contracts:

        

Japanese yen-denominated (2)

  2,271   2,088 

Total notional amount for translated earnings contracts

 $5,437  $5,042 

 

(1)Denominational currencies for other average rate forward contracts include the Mexican Peso and euro.
(2)Japanese yen-denominated option contracts include purchased put options and zero-cost collars. With respect to the zero-cost collars, the gross notional amount includes the value of the put and call options. However, due to the nature of the zero-cost collars, only the put or the call option can be exercised at maturity.

 

The following tables summarize the effect in the consolidated statements of income relating to Corning’s derivative financial instruments (in millions).  The accumulated derivative gain included in accumulated other comprehensive loss on the consolidated balance sheets as of June 30, 2024 and December 31, 2023 is $43 million and $54 million, respectively.

 

  

Three months ended June 30,

 
         

Location of gain (loss)

        
  

(Loss) gain recognized

 

reclassified from

 

Gain (loss) reclassified

 
  

in other comprehensive

 

accumulated

 

from accumulated

 
  

income (OCI)

 

OCI into income

 

OCI into income

 
  

2024

  

2023

 

effective (ineffective)

 

2024

  

2023

 

Derivative hedging relationships for cash flow and
fair value hedges:

                 

  Foreign exchange contracts and other

 $(24) $42 

Cost of sales

 $15  $11 
         

Other income, net

  (1)  (1)

Total cash flow and fair value hedges

 $(24) $42   $14  $10 

 

  

Six months ended June 30,

 
         

Location of gain (loss)

        
  

Gain recognized

 

reclassified from

 

Gain (loss) reclassified

 
  

in other comprehensive

 

accumulated

 

from accumulated

 
  

income (OCI)

 

OCI into income

 

OCI into income

 
  

2024

  

2023

 

effective (ineffective)

 

2024

  

2023

 

Derivative hedging relationships for cash flow and
fair value hedges:

                 

  Foreign exchange contracts and other

 $9  $74 

Cost of sales

 $21  $18 
         

Other income, net

  (1)  (2)

Total cash flow and fair value hedges

 $9  $74   $20  $16 

 

  

(Loss) gain recognized in income

  
  

Three months ended

  

Six months ended

  
  

June 30,

  

June 30,

  

Undesignated derivatives

 

2024

  

2023

  

2024

  

2023

 

Location of (loss) gain recognized in income

Foreign exchange contracts

 $(13) $15  $(35) $28 

Other income, net

Translated earnings contracts

  27   116   66   108 

Translated earnings contract gain, net

Cross currency swap contracts

  (7)     (7)   

Other income, net

Total undesignated

 $7  $131  $24  $136  

 

Cross Currency Swap Contracts

 

Since inception of the Company’s Japanese yen-denominated debt, the Japanese yen has weakened and the US dollar value of these liabilities has decreased, generating unrealized foreign exchange gains that have been recognized over time in the consolidated statements of income. During Q2 2024, to economically lock in unrealized foreign exchange gains, the Company entered into a ¥23 billion, or $215 million, fixed rate, three-year cross currency swap contract relating to a portion of the Company’s Japanese yen-denominated debt due in 2027. At inception of this instrument, Corning received a net $68 million from the counterparty, representing an exchange of the notional amounts at a fixed foreign exchange rate of Japanese yen to US dollar and was initially recorded as a derivative liability. As of June 30, 2024, the fair value of this derivative liability is $75 million.

 

Net Investment Hedges

 

In May 2023, the Company designated the full amount of its 2026 Notes and 2031 Notes with a total notional amount of €850 million, which are non-derivative financial instruments, as net investment hedges against our investments in certain European subsidiaries with euro functional currencies. As of June 30, 2024, the net investment hedges are deemed to be effective. During the three and six months ended June 30, 2024 foreign currency gain of $8 million and $30 million, respectively, associated with these net investment hedges were recognized in other comprehensive loss. During the three and six months ended June 30, 2023, the loss recognized in other comprehensive loss was not material.

 

Leased Precious Metals Contracts

 

The carrying amount of the leased precious metals pool, which is included within property, plant and equipment, net of accumulated depreciation in the consolidated balance sheets, is $65 million and $90 million as of  June 30, 2024 and December 31, 2023, respectively. The carrying amount of the leased precious metals pool includes cumulative fair value loss of $153 million and $239 million as of  June 30, 2024 and December 31, 2023, respectively. These losses are offset by changes in the fair value of hedges.

 
v3.24.2.u1
Note 13 - Shareholders' Equity
 6 Months Ended
Jun. 30, 2024
Notes to Financial Statements  
Equity [Text Block]

13. Shareholders’ Equity

 

Common Stock Dividends

 

On June 26, 2024, Corning’s Board of Directors declared a quarterly dividend of $0.28 per share of common stock. The dividend will be payable on September 27, 2024.

 

Fixed Rate Cumulative Convertible Preferred Stock, Series A

 

The Company had 2,300 outstanding shares of Fixed Rate Cumulative Convertible Preferred Stock, Series A (the “Preferred Stock”) as of December 31, 2020. On January 16, 2021, the Preferred Stock became convertible into 115 million common shares. On April 5, 2021 Corning executed the Share Repurchase Agreement (“SRA”) with Samsung Display Co., Ltd. (“SDC”) and the Preferred Stock was fully converted as of April 8, 2021. Immediately following the conversion, we repurchased and retired 35 million of the common shares held by SDC for an aggregate purchase price of approximately $1.5 billion, of which approximately $507 million was paid in  April in each of 2023, 2022 and 2021.

 

Pursuant to the SRA, with respect to the remaining 80 million common shares outstanding held by SDC:

 

●

58 million of the common shares SDC holds are subject to a seven-year lock-up period expiring in 2027.

●

SDC has the option to offer to sell 22 million common shares to Corning in specified tranches from time to time in calendar years 2024 through 2027. Corning may, at its sole discretion, elect to repurchase such common shares. If Corning elects not to repurchase the common shares and SDC sells the common shares on the open market, Corning will be required to pay SDC a make-whole payment, subject to a 5% cap of the repurchase proceeds that otherwise would have been paid by Corning. As of June 30, 2024 and December 31, 2023, the fair value of the liability associated with this option was not material.

 

Share Repurchase Program

 

In 2019, the Board authorized the repurchase of up to $5.0 billion of common stock (“2019 Authorization”). As of June 30, 2024, approximately $3.2 billion remains available under the Company’s 2019 Authorization.

 

During the three and six months ended June 30, 2024, the Company repurchased 3 million common shares for $105.4 million, pursuant to the terms of the SRA, as discussed above. No shares were repurchased under our 2019 Authorization during the three and six months ended June 30, 2023.

 

Accumulated Other Comprehensive Loss

 

For the three and six months ended June 30, 2024 and 2023, the change in accumulated other comprehensive loss was primarily related to the foreign currency translation adjustments.

 

The following table presents the changes in the foreign currency translation adjustment component of accumulated other comprehensive loss, including the proportionate share of equity method affiliates’ accumulated other comprehensive loss (in millions):

 

  

Three months ended

  

Six months ended

 
  

June 30,

  

June 30,

 
  

2024

  

2023

  

2024

  

2023

 

Beginning balance

 $(2,272) $(1,796) $(1,942) $(1,712)

Loss on foreign currency translation, net of tax benefit - $6, $3, $29, $27

  (212)  (310)  (543)  (393)

Equity method affiliates

  (10)  (8)  (9)  (9)

Net current-period other comprehensive loss, net of tax

  (222)  (318)  (552)  (402)

Ending balance

 $(2,494) $(2,114) $(2,494) $(2,114)

 
v3.24.2.u1
Note 14 - Share-based Compensation
 6 Months Ended
Jun. 30, 2024
Notes to Financial Statements  
Share-Based Payment Arrangement [Text Block]

14. Share-Based Compensation

 

Total share-based compensation expense was $66 million and $126 million for the three and six months ended June 30, 2024 respectively, and $59 million and $111 million for the three and six months ended June 30, 2023, respectively.  

 

Incentive Stock Plans

 

Time-Based Restricted Stock and Restricted Stock Units

 

The following table summarizes the changes in non-vested time-based restricted stock and restricted stock units for the six months ended June 30, 2024:

 

      

Weighted

 
  

Number

  

average

 
  

of shares

  

grant-date

 
  

(in thousands)

  

fair value

 

Non-vested shares and share units as of December 31, 2023

  13,321  $33.89 

Granted

  1,364   32.84 

Vested

  (4,047)  36.11 

Forfeited

  (316)  34.56 

Non-vested shares and share units as of June 30, 2024

  10,322  $32.86 


Performance-Based Restricted Stock Units

 

The following table summarizes the changes in non-vested performance-based restricted stock units for the six months ended June 30, 2024:

 

      

Weighted

 
  

Number

  

average

 
  

of shares

  

grant-date

 
  

(in thousands)

  

fair value

 

Non-vested share units as of December 31, 2023

  2,026  $38.89 

Granted

  1,647   32.70 

Vested

  (1,122)  41.70 

Performance adjustments

  916   32.84 

Forfeited

  (56)  33.10 

Non-vested share units as of June 30, 2024

  3,411  $33.61 

 

Stock Options

 

The following table summarizes information concerning stock options as of  June 30, 2024 and the related activity for the six months ended June 30, 2024:

 

          

Weighted-

     
          

average

     
      

Weighted-

  

remaining

  

Aggregate

 
  

Number

  

average

  

contractual

  

intrinsic

 
  

of shares

  

exercise

  

term

  

value

 
  

(in thousands)

  

price

  

(in years)

  

(in thousands)

 

Options outstanding as of December 31, 2023

  7,499  $23.82         

Exercised

  (1,537)  22.05         

Expired

  (5)  20.19         

Options outstanding as of June 30, 2024

  5,957   24.28   4.64  $86,768 

Options vested and exercisable as of June 30, 2024

  5,957   24.28   4.64   86,768 

 
v3.24.2.u1
Note 15 - Reportable Segments
 6 Months Ended
Jun. 30, 2024
Notes to Financial Statements  
Segment Reporting Disclosure [Text Block]

15. Reportable Segments

 

The Company has determined that it has five reportable segments for financial reporting purposes, as follows:

 

●Optical Communications – manufactures carrier network and enterprise network components for the telecommunications industry; the carrier network group consists primarily of products and solutions for optical-based communications infrastructure for services such as video, data and voice communications, and the enterprise network group consists primarily of optical-based communication networks sold to businesses, governments and individuals for their own use.
●Display Technologies – manufactures high quality glass substrates for flat panel displays, including liquid crystal displays and organic light-emitting diodes that are used primarily in televisions, notebook computers, desktop monitors, tablets and handheld devices.
●Specialty Materials – manufactures products that provide material formulations for glass, glass ceramics and fluoride crystals to meet demand for unique customer needs across a wide variety of commercial and industrial markets, including materials optimized for mobile consumer electronics, semiconductor equipment optics and consumables, aerospace and defense optics, radiation shielding products, sunglasses and telecommunications components.
●Environmental Technologies – manufactures ceramic substrates and filter products for emissions control systems in mobile applications.
●Life Sciences – develops, manufactures, and supplies laboratory products, including labware, equipment, media, serum and reagents, enabling workflow solutions for drug discovery and bioproduction.


All other businesses that do not meet the quantitative threshold for separate reporting have been grouped as Hemlock and Emerging Growth Businesses. Net sales for this group are mainly attributable to HSG, an operating segment that produces solar and semiconductor products. The emerging growth businesses primarily consist of Pharmaceutical Technologies, Auto Glass Solutions and the Emerging Innovations Group.  

  

Financial results for the reportable segments and Hemlock and Emerging Growth Businesses are prepared on a basis consistent with the internal disaggregation of financial information to assist the chief operating decision maker (“CODM”) in making internal operating decisions. As a significant portion of segment revenues and expenses are denominated in currencies other than the U.S. dollar, management believes it is important to understand the impact on segment net sales and segment net income (loss) of translating these currencies into U.S. dollars. Therefore, the Company utilizes constant-currency reporting for the Display Technologies, Specialty Materials, Environmental Technologies and Life Sciences segments to exclude the impact on segment sales and segment net income from the Japanese yen, South Korean won, Chinese yuan, New Taiwan dollar and euro, as applicable to the segment. In addition, effective January 1, 2024, the Company began utilizing constant-currency reporting for the Optical Communications segment to exclude the impact from the Mexican peso on segment results. Prior periods were not recast as the impact was not material. The most significant constant-currency adjustment relates to the Japanese yen exposure within the Display Technologies segment. 

 

The constant-currency rates established for our core performance measures are internally derived long-term management estimates, which are closely aligned with our hedging instrument rates. These hedging instruments may include, but are not limited to, foreign exchange forward or option contracts and foreign-denominated debt. The Company believes that the use of constant-currency reporting allows management to understand segment results without the volatility of currency fluctuation, analyze underlying trends in the businesses and establish operational goals and forecasts.

 

Constant-currency rates used are as follows and are applied to all periods presented and to all foreign exchange exposures during the period, even though we may be less than 100% hedged:

 

 

Currency

 

Japanese yen

 

Korean won

 

Chinese yuan

 

New Taiwan dollar

 

Euro

 Mexican peso
 

Rate

 

¥107

 

₩1,175

 

¥6.7

 

NT$31

 

€0.81

 MX$20

 

In addition, certain income and expenses are excluded from segment net income (loss) and included in the unallocated amounts in the reconciliation of reportable segment net income (loss) to net income attributable to Corning Incorporated. These items are not used by the CODM in allocating resources or evaluating the results of the segments and include the following: the impact of translating the Japanese yen-denominated debt; the impact of the translated earnings contracts; acquisition-related costs; certain discrete tax items and other tax-related adjustments; restructuring, impairment and other charges and credits; certain litigation, regulatory and other legal matters; pension mark-to-market adjustments; and other non-recurring non-operational items. Although these amounts are excluded from segment results, they are included in reported consolidated results.

 

Corning’s administrative and staff functions are performed on a centralized basis and such costs and expenses are allocated among the segments differently than they would be for stand-alone financial reporting purposes. These include certain costs and expenses of shared services, such as information technology, human resources, legal, finance and supply chain management. Expenses that are not allocated to the segments are included in the reconciliation of reportable segment net income (loss) to net income attributable to Corning Incorporated. Segment net income (loss) may not be consistent with measures used by other companies.

 

The following provides selected segment information as described above:

 

Segment information (in millions):

 

                 Hemlock    
                 and    
                 

Emerging

    
  

Optical

  

Display

  

Specialty

  

Environmental

  

Life

  

Growth

     
  

Communications

  

Technologies

  

Materials

  

Technologies

  

Sciences

  

Businesses

  

Total

 

Three months ended June 30, 2024

                            

Segment net sales

 $1,113  $1,014  $501  $431  $249  $296  $3,604 

Depreciation (1)

 $66  $110  $40  $32  $17  $40  $305 

Research, development and engineering expenses (2)

 $66  $28  $57  $26  $6  $39  $222 

Income tax (provision) benefit (3)

 $(41) $(68) $(17) $(26) $(4) $4  $(152)

Segment net income (loss)

 $143  $258  $63  $97  $17  $(23) $555 

 

                      

Hemlock

     
                      

and

     
                      

Emerging

     
  

Optical

  

Display

  

Specialty

  

Environmental

  

Life

  

Growth

     
  

Communications

  

Technologies

  

Materials

  

Technologies

  

Sciences

  

Businesses

  

Total

 

Three months ended June 30, 2023

                            

Segment net sales

 $1,066  $928  $423  $457  $231  $377  $3,482 

Depreciation (1)

 $64  $120  $39  $32  $17  $35  $307 

Research, development and engineering expenses (2)

 $56  $24  $57  $23  $8  $41  $209 

Income tax provision (3)

 $(38) $(55) $(9) $(28) $(3) $(11) $(144)

Segment net income

 $140  $208  $33  $107  $11  $26  $525 

 

                      

Hemlock

     
                      

and

     
                      

Emerging

     
  

Optical

  

Display

  

Specialty

  

Environmental

  

Life

  

Growth

     
  

Communications

  

Technologies

  

Materials

  

Technologies

  

Sciences

  

Businesses

  

Total

 

Six months ended June 30, 2024

                            

Segment net sales

 $2,043  $1,886  $955  $886  $485  $607  $6,862 

Depreciation (1)

 $132  $226  $76  $64  $34  $78  $610 

Research, development and engineering expenses (2)

 $131  $54  $117  $49  $12  $75  $438 

Income tax (provision) benefit (3)

 $(69) $(121) $(28) $(54) $(8) $3  $(277)

Segment net income (loss)

 $243  $459  $107  $202  $30  $(33) $1,008 

 

                      

Hemlock

     
                      

and

     
                      

Emerging

     
  

Optical

  

Display

  

Specialty

  

Environmental

  

Life

  

Growth

     
  

Communications

  

Technologies

  

Materials

  

Technologies

  

Sciences

  

Businesses

  

Total

 

Six months ended June 30, 2023

                            

Segment net sales

 $2,191  $1,691  $829  $888  $487  $763  $6,849 

Depreciation (1)

 $130  $243  $74  $65  $34  $68  $614 

Research, development and engineering expenses (2)

 $116  $47  $110  $47  $18  $80  $418 

Income tax provision (3)

 $(81) $(97) $(19) $(50) $(5) $(20) $(272)

Segment net income

 $299  $368  $72  $189  $20  $42  $990 

 

(1)Depreciation expense for Corning’s reportable segments and Hemlock and Emerging Growth Businesses includes an allocation of depreciation of corporate property not specifically identifiable to a segment.
(2)Research, development and engineering expenses include direct project spending that is identifiable to a segment.
(3)Income tax (provision) benefit reflects a tax rate of 21%.

 

The following table presents a reconciliation of net sales of reportable segments to consolidated net sales (in millions):

 

  

Three months ended

  

Six months ended

 
  

June 30,

  

June 30,

 
  

2024

  

2023

  

2024

  

2023

 

Net sales of reportable segments

 $3,308  $3,105  $6,255  $6,086 

Net sales of Hemlock and Emerging Growth Businesses

  296   377   607   763 

Impact of constant-currency reporting (1)

  (353)  (239)  (636)  (428)

Consolidated net sales

 $3,251  $3,243  $6,226  $6,421 

 

(1)This amount primarily represents the impact of foreign currency adjustments in the Display Technologies segment.

 

The following table presents a reconciliation of net income of reportable segments to net income attributable to Corning Incorporated (in millions):

 

  

Three months ended

  

Six months ended

 
  

June 30,

  

June 30,

 
  

2024

  

2023

  

2024

  

2023

 

Net income of reportable segments

 $578  $499  $1,041  $948 

Net (loss) income of Hemlock and Emerging Growth Businesses

  (23)  26   (33)  42 

Unallocated amounts:

                

Impact of constant-currency reporting

  (267)  (174)  (493)  (323)

Translated earnings contract gain, net

  27   116   66   108 

Translation gain on Japanese yen-denominated debt

  54   109   135   127 

Research, development, and engineering expenses (1)

  (40)  (42)  (82)  (87)

Amortization of intangibles

  (30)  (31)  (60)  (62)

Interest expense, net

  (65)  (61)  (126)  (117)

Income tax benefit

  102   38   156   129 

Severance charges

  (3)  (73)  (3)  (78)

Capacity optimization and other charges and credits (2)

  (135)  (64)  (126)  (125)

Other corporate items

  (94)  (62)  (162)  (105)

Net income attributable to Corning Incorporated

 $104  $281  $313  $457 

 

(1)Amount does not include research, development and engineering expense related to severance charges. 
(2)Amount includes charges associated with impairment losses, asset write-offs, accelerated depreciation, disposal costs and inventory write-downs. Refer to Note 2 (Restructuring, Impairment and Other Charges and Credits) for additional information.

 
v3.24.2.u1
Insider Trading Arrangements
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2024
Insider Trading Arr Line Items    
Material Terms of Trading Arrangement [Text Block]  

Item 5. Other Information

 

During the three months ended June 30, 2024, none of our Section 16 reporting persons adopted, modified or terminated any contract, instruction or written plan for the purchase or sale of our securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any non-Rule 10b5-1 trading arrangement.
Rule 10b5-1 Arrangement Adopted [Flag] false  
Rule 10b5-1 Arrangement Terminated [Flag] false  
Non-Rule 10b5-1 Arrangement Adopted [Flag] false  
Non-Rule 10b5-1 Arrangement Terminated [Flag] false  
v3.24.2.u1
Note 3 - Revenue (Tables)
 6 Months Ended
Jun. 30, 2024
Notes Tables  
Disaggregation of Revenue [Table Text Block]
  

Three months ended

  

Six months ended

 
  

June 30,

  

June 30,

 
  

2024

  

2023

  

2024

  

2023

 

Telecommunication products

 $1,113  $1,066  $2,043  $2,191 

Display products

  704   725   1,336   1,334 

Specialty glass products

  497   420   947   824 

Environmental substrate and filter products

  404   433   831   840 

Life science products

  237   222   462   469 

Polycrystalline silicon products

  199   258   415   535 

All other products

  97   119   192   228 

Total revenue

 $3,251  $3,243  $6,226  $6,421 
v3.24.2.u1
Note 4 - Income Taxes (Tables)
 6 Months Ended
Jun. 30, 2024
Notes Tables  
Schedule of Income Tax Provisions and Rates [Table Text Block]
  

Three months ended

  

Six months ended

 
  

June 30,

  

June 30,

 
  

2024

  

2023

  

2024

  

2023

 

Provision for income taxes

 $(50) $(106) $(121) $(143)

Effective tax rate

  29.1%  25.9%  25.9%  22.4%
v3.24.2.u1
Note 5 - Earnings Per Common Share (Tables)
 6 Months Ended
Jun. 30, 2024
Notes Tables  
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]
  

Three months ended

  

Six months ended

 
  

June 30,

  

June 30,

 
  

2024

  

2023

  

2024

  

2023

 

Net income attributable to Corning Incorporated

 $104  $281  $313  $457 
                 

Weighted-average common shares outstanding – basic

  853   848   853   846 

Effect of dilutive securities:

                

Stock options and other awards

  11   11   12   13 

Weighted-average common shares outstanding – diluted

  864   859   865   859 

Basic earnings per common share

 $0.12  $0.33  $0.37  $0.54 

Diluted earnings per common share

 $0.12  $0.33  $0.36  $0.53 
                 

Anti-dilutive potential shares excluded from diluted earnings per common share:

                

Stock options and other awards

  3   3   4   3 
v3.24.2.u1
Note 6 - Inventories (Tables)
 6 Months Ended
Jun. 30, 2024
Notes Tables  
Schedule of Inventory, Current [Table Text Block]
  

June 30,

  

December 31,

 
  

2024

  

2023

 

Finished goods

 $1,303  $1,242 

Work in process

  546   551 

Raw materials and accessories

  426   445 

Supplies and packing materials

  407   428 

Inventories

 $2,682  $2,666 
v3.24.2.u1
Note 7 - Other Liabilities (Tables)
 6 Months Ended
Jun. 30, 2024
Notes Tables  
Other Liabilities [Table Text Block]
  

June 30,

  

December 31,

 
  

2024

  

2023

 

Current liabilities:

        

Wages and employee benefits

 $569  $609 

Income taxes

  67   69 

Derivative instruments (Note 12)

  179   66 

Dividend payable (Note 13)

  261   21 

Deferred revenue (Note 3)

  193   181 

Customer deposits (Note 3)

  178   148 

Short-term operating leases

  92   112 

Other current liabilities

  1,145   1,327 

Other accrued liabilities

 $2,684  $2,533 
         

Non-current liabilities:

        

Defined benefit pension plan liabilities

 $724  $721 

Derivative instruments (Note 12)

  156   31 

Deferred revenue (Note 3)

  597   679 

Customer deposits (Note 3)

  986   1,083 

Deferred tax liabilities

  167   218 

Long-term operating leases

  821   846 

Other non-current liabilities

  1,007   1,131 

Other liabilities

 $4,458  $4,709 
v3.24.2.u1
Note 9 - Employee Retirement Plans (Tables)
 6 Months Ended
Jun. 30, 2024
Notes Tables  
Schedule of Net Benefit Costs [Table Text Block]
  

Pension benefits

  

Postretirement benefits

 
  

Three months ended

  

Six months ended

  

Three months ended

  

Six months ended

 
  

June 30,

  

June 30,

  

June 30,

  

June 30,

 
  

2024

  

2023

  

2024

  

2023

  

2024

  

2023

  

2024

  

2023

 

Service cost

 $25  $27  $48  $50  $1  $2  $2  $3 

Interest cost

  46   43   92   88   5   5   10   11 

Expected return on plan assets

  (48)  (46)  (96)  (92)                

Amortization of actuarial net gain

                  (7)  (6)  (12)  (11)

Amortization of prior service cost (credit)

  2   1   3   3   (2)  (1)  (4)  (2)

Special termination benefit charge

  3   5   3   5                 

Total pension and postretirement benefit expense (income)

 $28  $30  $50  $54  $(3) $—  $(4) $1 
v3.24.2.u1
Note 12 - Financial Instruments (Tables)
 6 Months Ended
Jun. 30, 2024
Notes Tables  
Schedule of Notional Amounts of Outstanding Derivative Positions [Table Text Block]
  

June 30, 2024

  

December 31, 2023

 
  

Notional amount

  

Fair value asset (1)

  

Fair value liability (1)

  

Notional amount

  

Fair value asset (1)

  

Fair value liability (1)

 

Derivatives designated as hedging
  instruments (2):

                        

Foreign exchange and precious
  metals lease contracts (3)

 $721  $179  $(19) $241  $287     
                         

Derivatives not designated as hedging
    instruments:

                        

Foreign exchange contracts

  1,964   22   (34)  1,988   20  $(17)

Translated earnings contracts

  5,437   406   (207)  5,042   324   (80)

Cross currency swap contracts

  215       (75)            

Total derivatives

 $8,337  $607  $(335) $7,271  $631  $(97)
                         

Current

     $520  $(179)     $501  $(66)

Non-current

      87   (156)      130   (31)

Total derivatives

     $607  $(335)     $631  $(97)
Derivatives Not Designated as Hedging Instruments [Table Text Block]
  

June 30,

  

December 31,

 
  

2024

  

2023

 

Average rate forward contracts:

        

Chinese yuan-denominated

 $748  $684 

Japanese yen-denominated

  358   463 

South Korean won-denominated

  1,301   1,609 

New Taiwan dollar-denominated

  423   198 

Other foreign currencies (1)

  336    

Option contracts:

        

Japanese yen-denominated (2)

  2,271   2,088 

Total notional amount for translated earnings contracts

 $5,437  $5,042 
Not Designated as Hedging Instrument [Member]  
Notes Tables  
Schedule of Derivative Instruments, Effect on Other Comprehensive Income (Loss) [Table Text Block]
  

(Loss) gain recognized in income

  
  

Three months ended

  

Six months ended

  
  

June 30,

  

June 30,

  

Undesignated derivatives

 

2024

  

2023

  

2024

  

2023

 

Location of (loss) gain recognized in income

Foreign exchange contracts

 $(13) $15  $(35) $28 

Other income, net

Translated earnings contracts

  27   116   66   108 

Translated earnings contract gain, net

Cross currency swap contracts

  (7)     (7)   

Other income, net

Total undesignated

 $7  $131  $24  $136  
Designated as Hedging Instrument [Member]  
Notes Tables  
Schedule of Derivative Instruments, Effect on Other Comprehensive Income (Loss) [Table Text Block]
  

Three months ended June 30,

 
         

Location of gain (loss)

        
  

(Loss) gain recognized

 

reclassified from

 

Gain (loss) reclassified

 
  

in other comprehensive

 

accumulated

 

from accumulated

 
  

income (OCI)

 

OCI into income

 

OCI into income

 
  

2024

  

2023

 

effective (ineffective)

 

2024

  

2023

 

Derivative hedging relationships for cash flow and
fair value hedges:

                 

  Foreign exchange contracts and other

 $(24) $42 

Cost of sales

 $15  $11 
         

Other income, net

  (1)  (1)

Total cash flow and fair value hedges

 $(24) $42   $14  $10 
  

Six months ended June 30,

 
         

Location of gain (loss)

        
  

Gain recognized

 

reclassified from

 

Gain (loss) reclassified

 
  

in other comprehensive

 

accumulated

 

from accumulated

 
  

income (OCI)

 

OCI into income

 

OCI into income

 
  

2024

  

2023

 

effective (ineffective)

 

2024

  

2023

 

Derivative hedging relationships for cash flow and
fair value hedges:

                 

  Foreign exchange contracts and other

 $9  $74 

Cost of sales

 $21  $18 
         

Other income, net

  (1)  (2)

Total cash flow and fair value hedges

 $9  $74   $20  $16 
v3.24.2.u1
Note 13 - Shareholders' Equity (Tables)
 6 Months Ended
Jun. 30, 2024
Accumulated Foreign Currency Adjustment Attributable to Parent [Member]  
Notes Tables  
Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block]
  

Three months ended

  

Six months ended

 
  

June 30,

  

June 30,

 
  

2024

  

2023

  

2024

  

2023

 

Beginning balance

 $(2,272) $(1,796) $(1,942) $(1,712)

Loss on foreign currency translation, net of tax benefit - $6, $3, $29, $27

  (212)  (310)  (543)  (393)

Equity method affiliates

  (10)  (8)  (9)  (9)

Net current-period other comprehensive loss, net of tax

  (222)  (318)  (552)  (402)

Ending balance

 $(2,494) $(2,114) $(2,494) $(2,114)
v3.24.2.u1
Note 14 - Share-based Compensation (Tables)
 6 Months Ended
Jun. 30, 2024
Notes Tables  
Share-Based Payment Arrangement, Restricted Stock and Restricted Stock Unit, Activity [Table Text Block]
      

Weighted

 
  

Number

  

average

 
  

of shares

  

grant-date

 
  

(in thousands)

  

fair value

 

Non-vested shares and share units as of December 31, 2023

  13,321  $33.89 

Granted

  1,364   32.84 

Vested

  (4,047)  36.11 

Forfeited

  (316)  34.56 

Non-vested shares and share units as of June 30, 2024

  10,322  $32.86 
Share-Based Payment Arrangement, Performance Shares, Activity [Table Text Block]
      

Weighted

 
  

Number

  

average

 
  

of shares

  

grant-date

 
  

(in thousands)

  

fair value

 

Non-vested share units as of December 31, 2023

  2,026  $38.89 

Granted

  1,647   32.70 

Vested

  (1,122)  41.70 

Performance adjustments

  916   32.84 

Forfeited

  (56)  33.10 

Non-vested share units as of June 30, 2024

  3,411  $33.61 
Share-Based Payment Arrangement, Option, Activity [Table Text Block]
          

Weighted-

     
          

average

     
      

Weighted-

  

remaining

  

Aggregate

 
  

Number

  

average

  

contractual

  

intrinsic

 
  

of shares

  

exercise

  

term

  

value

 
  

(in thousands)

  

price

  

(in years)

  

(in thousands)

 

Options outstanding as of December 31, 2023

  7,499  $23.82         

Exercised

  (1,537)  22.05         

Expired

  (5)  20.19         

Options outstanding as of June 30, 2024

  5,957   24.28   4.64  $86,768 

Options vested and exercisable as of June 30, 2024

  5,957   24.28   4.64   86,768 
v3.24.2.u1
Note 15 - Reportable Segments (Tables)
 6 Months Ended
Jun. 30, 2024
Notes Tables  
Schedule of Segment Reporting Information, by Segment [Table Text Block]
                 Hemlock    
                 and    
                 

Emerging

    
  

Optical

  

Display

  

Specialty

  

Environmental

  

Life

  

Growth

     
  

Communications

  

Technologies

  

Materials

  

Technologies

  

Sciences

  

Businesses

  

Total

 

Three months ended June 30, 2024

                            

Segment net sales

 $1,113  $1,014  $501  $431  $249  $296  $3,604 

Depreciation (1)

 $66  $110  $40  $32  $17  $40  $305 

Research, development and engineering expenses (2)

 $66  $28  $57  $26  $6  $39  $222 

Income tax (provision) benefit (3)

 $(41) $(68) $(17) $(26) $(4) $4  $(152)

Segment net income (loss)

 $143  $258  $63  $97  $17  $(23) $555 
                      

Hemlock

     
                      

and

     
                      

Emerging

     
  

Optical

  

Display

  

Specialty

  

Environmental

  

Life

  

Growth

     
  

Communications

  

Technologies

  

Materials

  

Technologies

  

Sciences

  

Businesses

  

Total

 

Three months ended June 30, 2023

                            

Segment net sales

 $1,066  $928  $423  $457  $231  $377  $3,482 

Depreciation (1)

 $64  $120  $39  $32  $17  $35  $307 

Research, development and engineering expenses (2)

 $56  $24  $57  $23  $8  $41  $209 

Income tax provision (3)

 $(38) $(55) $(9) $(28) $(3) $(11) $(144)

Segment net income

 $140  $208  $33  $107  $11  $26  $525 
                      

Hemlock

     
                      

and

     
                      

Emerging

     
  

Optical

  

Display

  

Specialty

  

Environmental

  

Life

  

Growth

     
  

Communications

  

Technologies

  

Materials

  

Technologies

  

Sciences

  

Businesses

  

Total

 

Six months ended June 30, 2024

                            

Segment net sales

 $2,043  $1,886  $955  $886  $485  $607  $6,862 

Depreciation (1)

 $132  $226  $76  $64  $34  $78  $610 

Research, development and engineering expenses (2)

 $131  $54  $117  $49  $12  $75  $438 

Income tax (provision) benefit (3)

 $(69) $(121) $(28) $(54) $(8) $3  $(277)

Segment net income (loss)

 $243  $459  $107  $202  $30  $(33) $1,008 
                      

Hemlock

     
                      

and

     
                      

Emerging

     
  

Optical

  

Display

  

Specialty

  

Environmental

  

Life

  

Growth

     
  

Communications

  

Technologies

  

Materials

  

Technologies

  

Sciences

  

Businesses

  

Total

 

Six months ended June 30, 2023

                            

Segment net sales

 $2,191  $1,691  $829  $888  $487  $763  $6,849 

Depreciation (1)

 $130  $243  $74  $65  $34  $68  $614 

Research, development and engineering expenses (2)

 $116  $47  $110  $47  $18  $80  $418 

Income tax provision (3)

 $(81) $(97) $(19) $(50) $(5) $(20) $(272)

Segment net income

 $299  $368  $72  $189  $20  $42  $990 
Reconciliation of Revenue from Segments to Consolidated [Table Text Block]
  

Three months ended

  

Six months ended

 
  

June 30,

  

June 30,

 
  

2024

  

2023

  

2024

  

2023

 

Net sales of reportable segments

 $3,308  $3,105  $6,255  $6,086 

Net sales of Hemlock and Emerging Growth Businesses

  296   377   607   763 

Impact of constant-currency reporting (1)

  (353)  (239)  (636)  (428)

Consolidated net sales

 $3,251  $3,243  $6,226  $6,421 
Reconciliation of Net Income (Loss) from Segments to Consolidated [Table Text Block]
  

Three months ended

  

Six months ended

 
  

June 30,

  

June 30,

 
  

2024

  

2023

  

2024

  

2023

 

Net income of reportable segments

 $578  $499  $1,041  $948 

Net (loss) income of Hemlock and Emerging Growth Businesses

  (23)  26   (33)  42 

Unallocated amounts:

                

Impact of constant-currency reporting

  (267)  (174)  (493)  (323)

Translated earnings contract gain, net

  27   116   66   108 

Translation gain on Japanese yen-denominated debt

  54   109   135   127 

Research, development, and engineering expenses (1)

  (40)  (42)  (82)  (87)

Amortization of intangibles

  (30)  (31)  (60)  (62)

Interest expense, net

  (65)  (61)  (126)  (117)

Income tax benefit

  102   38   156   129 

Severance charges

  (3)  (73)  (3)  (78)

Capacity optimization and other charges and credits (2)

  (135)  (64)  (126)  (125)

Other corporate items

  (94)  (62)  (162)  (105)

Net income attributable to Corning Incorporated

 $104  $281  $313  $457 
v3.24.2.u1
Note 2 - Restructuring, Impairment and Other Charges and Credits (Details Textual) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Restructuring Costs and Asset Impairment Charges $ 138,000 $ 0 $ 129,000 $ 0
Closure of Display Manufacturing Plant [Member]        
Foreign Currency Transaction Loss, before Tax 72,000      
Cost of Sales [Member]        
Restructuring Costs and Asset Impairment Charges $ 141,000   $ 121,000  
v3.24.2.u1
Note 3 - Revenue (Details Textual) - USD ($)
$ in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Dec. 31, 2023
Contract with Customer, Liability $ 1,200   $ 1,200    
Increase (Decrease) in Contract with Customer, Liability 11 $ 12 91 $ 82  
HSG [Member]          
Contract with Customer, Liability $ 790   $ 790   $ 860
Maximum [Member]          
Long Term Supply, Commitment Period (Year) 10 years        
v3.24.2.u1
Note 3 - Revenue - Disaggregation of Revenue (Details) - USD ($)
$ in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Net sales $ 3,251 $ 3,243 $ 6,226 $ 6,421
Telecommunication Products [Member]        
Net sales 1,113 1,066 2,043 2,191
Display Products [Member]        
Net sales 704 725 1,336 1,334
Specialty Glass Products [Member]        
Net sales 497 420 947 824
Environmental Substrate and Filter Products [Member]        
Net sales 404 433 831 840
Life Science Products [Member]        
Net sales 237 222 462 469
Polycrystalline Silicon [Member]        
Net sales 199 258 415 535
Product and Service, Other [Member]        
Net sales $ 97 $ 119 $ 192 $ 228
v3.24.2.u1
Note 4 - Income Taxes (Details Textual) - USD ($)
$ in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Dec. 31, 2023
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent 21.00% 21.00% 21.00% 21.00%  
Income Tax Examination, Liability (Refund) Adjustment from Settlement with Taxing Authority   $ (99)   $ (99)  
National Tax Service of Korea [Member]          
Income Taxes Receivable, Noncurrent $ 256   $ 256   $ 261
v3.24.2.u1
Note 4 - Income Taxes - Provision for Income Taxes (Details) - USD ($)
$ in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Provision for income taxes (Note 4) $ (50) $ (106) $ (121) $ (143)
Effective tax rate 29.10% 25.90% 25.90% 22.40%
v3.24.2.u1
Note 5 - Earnings Per Common Share - Reconciliation of Earnings Per Common Share (Details) - USD ($)
$ / shares in Units, shares in Millions, $ in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Net income attributable to Corning Incorporated $ 104 $ 281 $ 313 $ 457
Weighted-average common shares outstanding – basic (in shares) 853 848 853 846
Effect of dilutive securities:        
Stock options and other awards (in shares) 11 11 12 13
Weighted-average common shares outstanding – diluted (in shares) 864 859 865 859
Basic (Note 5) (in dollars per share) $ 0.12 $ 0.33 $ 0.37 $ 0.54
Diluted (Note 5) (in dollars per share) $ 0.12 $ 0.33 $ 0.36 $ 0.53
Stock Options And Other Awards [Member]        
Effect of dilutive securities:        
Stock options and other awards (in shares) 3 3 4 3
v3.24.2.u1
Note 6 - Inventories - Schedule of Inventories (Details) - USD ($)
$ in Millions
Jun. 30, 2024
Dec. 31, 2023
Finished goods $ 1,303 $ 1,242
Work in process 546 551
Raw materials and accessories 426 445
Supplies and packing materials 407 428
Inventories $ 2,682 $ 2,666
v3.24.2.u1
Note 7 - Other Liabilities - Schedule of Other Liabilities (Details) - USD ($)
$ in Millions
Jun. 30, 2024
Dec. 31, 2023
Wages and employee benefits $ 569 $ 609
Income taxes 67 69
Derivative instruments (Note 12) [1] 179 66
Dividend payable (Note 13) 261 21
Deferred revenue (Note 3) 193 181
Customer deposits (Note 3) 178 148
Short-term operating leases 92 112
Other current liabilities 1,145 1,327
Other accrued liabilities 2,684 2,533
Defined benefit pension plan liabilities 724 721
Derivative instruments (Note 12) [1] 156 31
Deferred revenue (Note 3) 597 679
Customer deposits (Note 3) 986 1,083
Deferred tax liabilities 167 218
Long-term operating leases 821 846
Other non-current liabilities 1,007 1,131
Other liabilities $ 4,458 $ 4,709
[1] All of the Company’s derivative contracts are measured at fair value and are classified as Level 2 within the fair value hierarchy. Derivative assets are presented in Other current assets or Other assets. Derivative liabilities are presented in Other current liabilities or Other liabilities.
v3.24.2.u1
Note 8 - Debt (Details Textual)
€ in Millions, $ in Millions, ¥ in Billions
 3 Months Ended 6 Months Ended
May 15, 2023
USD ($)
Jun. 30, 2024
USD ($)
Jun. 30, 2024
USD ($)
Jun. 30, 2023
USD ($)
Jun. 30, 2024
JPY (¥)
Dec. 31, 2023
USD ($)
May 15, 2023
EUR (€)
Long-Term Debt and Lease Obligation   $ 6,908 $ 6,908     $ 7,206  
Derivative, Notional Amount [1]   8,337 8,337     7,271  
Proceeds from Issuance of Long-Term Debt     $ 918      
The 2026 Notes [Member]              
Debt Instrument, Face Amount | €             € 300
Debt Instrument, Interest Rate, Stated Percentage             3.875%
The 2031 Notes [Member]              
Debt Instrument, Face Amount | €             € 550
Debt Instrument, Interest Rate, Stated Percentage             4.125%
Notes 2026 and Notes 2031 [Member]              
Proceeds from Issuance of Long-Term Debt $ 918            
Long-Term Debt   903 903        
Not Designated as Hedging Instrument [Member]              
Derivative, Notional Amount   5,437 5,437     5,042  
Currency Swap [Member] | Not Designated as Hedging Instrument [Member]              
Derivative, Notional Amount   $ 215 215   ¥ 23    
Derivative, Term of Contract (Year)   3 years          
Fair Value, Inputs, Level 2 [Member]              
Long-Term Debt, Fair Value   $ 6,500 $ 6,500     $ 7,000  
[1] The amounts above do not include €850 million of euro-denominated debt ($903 million equivalent as of June 30, 2024), which is a non-derivative financial instrument designated as a net investment hedge.
v3.24.2.u1
Note 9 - Employee Retirement Plans - Net Periodic Benefit Expense (Details) - USD ($)
$ in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Pension Plan [Member]        
Service cost $ 25 $ 27 $ 48 $ 50
Interest cost 46 43 92 88
Expected return on plan assets (48) (46) (96) (92)
Amortization of prior service cost (credit) 2 1 3 3
Special termination benefit charge 3 5 3 5
Total pension and postretirement benefit expense (income) 28 30 50 54
Other Postretirement Benefits Plan [Member]        
Service cost 1 2 2 3
Interest cost 5 5 10 11
Amortization of actuarial net gain (7) (6) (12) (11)
Amortization of prior service cost (credit) (2) (1) (4) (2)
Total pension and postretirement benefit expense (income) $ (3) $ 0 $ (4) $ 1
v3.24.2.u1
Note 10 - Leases (Details Textual) - USD ($)
$ in Millions
Jun. 17, 2024
Mar. 12, 2024
Jun. 30, 2024
Facility Lease [Member]      
Estimated Construction Costs   $ 835  
Lessee, Finance Lease, Term of Contract (Year)     5 years
Finance Lease, Liability, to be Paid     $ 1,100
Finance Lease, Liability, to be Paid, Year One     35
Finance Lease, Liability, to be Paid, Year Two     103
Finance Lease, Liability, to be Paid, Year Three     99
Finance Lease, Liability, to be Paid, Year Four     96
Finance Lease, Liability, to be Paid, after Year Four     $ 780
Equipment Lease [Member]      
Lessee, Finance Lease, Term of Contract (Year)     5 years
Finance Lease, Liability, to be Paid     $ 446
Finance Lease, Liability, to be Paid, Year One     25
Finance Lease, Liability, to be Paid, Year Two     100
Finance Lease, Liability, to be Paid, Year Three     95
Finance Lease, Liability, to be Paid, Year Four     89
Finance Lease, Liability, to be Paid, after Year Four     $ 137
Estimated Purchase and Installation Costs $ 365    
v3.24.2.u1
Note 11 - Commitments and Contingencies (Details Textual)
$ in Millions
 3 Months Ended
May 31, 2016
Jun. 30, 2024
USD ($)
Dec. 31, 2023
USD ($)
Jun. 01, 2016
Environmental Litigation [Member]        
Number of Hazardous Waste Sites   19    
Accrual for Environmental Loss Contingencies   $ 83 $ 88  
Dow Corning Corporation [Member] | Dow Corning Chapter 11 Related Matters [Member]        
Equity Method Investment, Ownership Percentage       50.00%
Indemnification of Excess Liability 50.00%      
Dow Corning Corporation [Member] | Dow Corning Environmental Claims [Member]        
Indemnification of Excess Liability   50.00%    
v3.24.2.u1
Note 12 - Financial Instruments (Details Textual)
€ in Millions, $ in Millions, ¥ in Billions
 3 Months Ended 6 Months Ended 12 Months Ended
May 15, 2023
EUR (€)
Jun. 30, 2024
USD ($)
ozt
Jun. 30, 2024
USD ($)
Dec. 31, 2023
USD ($)
ozt
Jun. 30, 2024
JPY (¥)
Jun. 30, 2024
EUR (€)
Derivative, Notional Amount [1]   $ 8,337 $ 8,337 $ 7,271    
AOCI, Cash Flow Hedge, Cumulative Gain (Loss), after Tax   43 43 54    
Not Designated as Hedging Instrument [Member]            
Derivative, Notional Amount   5,437 5,437 5,042    
Currency Swap [Member] | Not Designated as Hedging Instrument [Member]            
Derivative, Notional Amount   $ 215 215   ¥ 23  
Derivative, Term of Contract (Year)   3 years        
Derivative Liability, Notional Amount   $ 68 68      
Derivative, Fair Value, Net   75 75      
Leased Precious Metal Pools [Member]            
Hedged Asset, Fair Value Hedge, Cumulative Increase (Decrease)   (153) (153) (239)    
Leased Precious Metal Pools [Member] | Property and Equipment, Net [Member]            
Derivative Instruments in Hedges, Assets, at Fair Value   65 65 90    
Net Investment Hedging [Member]            
Non-derivative, Subject to Master Netting Arrangement, before Offset   903 903     € 850
Notional Amount of Nonderivative Instruments | € € 850          
Foreign Currency Transaction Gain, before Tax   8 30      
Cash Flow Hedging [Member] | Foreign Exchange Forward [Member] | Designated as Hedging Instrument [Member]            
Derivative, Notional Amount   $ 721 721 $ 241    
Derivative, Nonmonetary Notional Amount, Mass (Troy Ounce) | ozt   13,762   20,160    
Cash Flow Hedging [Member] | Lease Precious Metals [Member] | Designated as Hedging Instrument [Member]            
Derivative, Notional Amount   $ 146 $ 146 $ 229    
[1] The amounts above do not include €850 million of euro-denominated debt ($903 million equivalent as of June 30, 2024), which is a non-derivative financial instrument designated as a net investment hedge.
v3.24.2.u1
Note 12 - Financial Instruments - Summary of Notional Amounts and Respective Fair Values of Derivative Financial Instruments (Details)
$ in Millions, ¥ in Billions
Jun. 30, 2024
USD ($)
Jun. 30, 2024
JPY (¥)
Dec. 31, 2023
USD ($)
Notional amount [1] $ 8,337   $ 7,271
Asset derivatives, fair value [1],[2] 607   631
Liability derivatives, fair value [1],[2] (335)   (97)
Current, Asset derivatives, fair value [2] 520   501
Current, Liability derivatives, fair value [2] (179)   (66)
Non-current, Asset derivatives, fair value [2] 87   130
Non-current, Liability derivatives, fair value [2] (156)   (31)
Total asset derivatives [2] 607   631
Total liability derivatives [2] (335)   (97)
Not Designated as Hedging Instrument [Member]      
Notional amount 5,437   5,042
Foreign Exchange Contract [Member] | Designated as Hedging Instrument [Member]      
Notional amount [3] 721   241
Foreign Exchange Contract [Member] | Designated as Hedging Instrument [Member] | Other Current Assets [Member]      
Asset derivatives, fair value [2],[3] 179   287
Foreign Exchange Contract [Member] | Designated as Hedging Instrument [Member] | Other Accrued Liabilities [Member]      
Liability derivatives, fair value [2],[3] (19)    
Foreign Exchange Contract [Member] | Not Designated as Hedging Instrument [Member]      
Notional amount 1,964   1,988
Foreign Exchange Contract [Member] | Not Designated as Hedging Instrument [Member] | Other Current Assets [Member]      
Asset derivatives, fair value [2] 22   20
Foreign Exchange Contract [Member] | Not Designated as Hedging Instrument [Member] | Other Accrued Liabilities [Member]      
Liability derivatives, fair value [2] (34)   (17)
Translated Earnings Contracts [Member] | Not Designated as Hedging Instrument [Member]      
Notional amount 5,437   5,042
Translated Earnings Contracts [Member] | Not Designated as Hedging Instrument [Member] | Other Current Assets [Member]      
Asset derivatives, fair value [2] 406   324
Translated Earnings Contracts [Member] | Not Designated as Hedging Instrument [Member] | Other Accrued Liabilities [Member]      
Liability derivatives, fair value [2] (207)   $ (80)
Currency Swap [Member] | Not Designated as Hedging Instrument [Member]      
Notional amount 215 ¥ 23  
Currency Swap [Member] | Not Designated as Hedging Instrument [Member] | Other Accrued Liabilities [Member]      
Liability derivatives, fair value [2] $ (75)    
[1] The amounts above do not include €850 million of euro-denominated debt ($903 million equivalent as of June 30, 2024), which is a non-derivative financial instrument designated as a net investment hedge.
[2] All of the Company’s derivative contracts are measured at fair value and are classified as Level 2 within the fair value hierarchy. Derivative assets are presented in Other current assets or Other assets. Derivative liabilities are presented in Other current liabilities or Other liabilities.
[3] As of June 30, 2024 and December 31, 2023, derivatives designated as hedging instruments include foreign exchange cash flow hedges with total notional amounts of $236 million and $241 million, respectively, and fair value hedges of leased precious metals with total notional amounts of 13,762 troy ounces and 20,160 troy ounces, respectively. Fair value assets include designated derivatives pertaining to precious metals lease contracts in the amounts of $146 million and $229 million as of June 30, 2024 and December 31, 2023, respectively.
v3.24.2.u1
Note 12 - Financial Instruments - Undesignated Hedges (Details) - USD ($)
$ in Millions
Jun. 30, 2024
Dec. 31, 2023
Gross notional value for translated earning contracts [1] $ 8,337 $ 7,271
Not Designated as Hedging Instrument [Member]    
Gross notional value for translated earning contracts 5,437 5,042
Not Designated as Hedging Instrument [Member] | Average Rate Forward Contracts, Chinese Yuan-Denomination [Member]    
Gross notional value for translated earning contracts 748 684
Not Designated as Hedging Instrument [Member] | Average Rate Forward Contracts, Japanese Yen-denominated [Member]    
Gross notional value for translated earning contracts 358 463
Not Designated as Hedging Instrument [Member] | Average Rate Forward Contracts, South Korean Won-denominated [Member]    
Gross notional value for translated earning contracts 1,301 1,609
Not Designated as Hedging Instrument [Member] | Average Rate Forward Contracts, New Taiwan Dollar-denominated [Member]    
Gross notional value for translated earning contracts 423 198
Not Designated as Hedging Instrument [Member] | Average Rate Forward Contracts, Other Foreign Currencies [Member]    
Gross notional value for translated earning contracts [2] 336
Not Designated as Hedging Instrument [Member] | Options Contracts, Japanese Yen-denominated [Member]    
Gross notional value for translated earning contracts [3] $ 2,271 $ 2,088
[1] The amounts above do not include €850 million of euro-denominated debt ($903 million equivalent as of June 30, 2024), which is a non-derivative financial instrument designated as a net investment hedge.
[2] Denominational currencies for other average rate forward contracts include the Mexican Peso and euro.
[3] Japanese yen-denominated option contracts include purchased put options and zero-cost collars. With respect to the zero-cost collars, the gross notional amount includes the value of the put and call options. However, due to the nature of the zero-cost collars, only the put or the call option can be exercised at maturity.
v3.24.2.u1
Note 12 - Financial Instruments - Summary of Effect of Designated Derivative Financial Instruments on Consolidated Financial Statements (Details) - USD ($)
$ in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Cost of sales $ 2,302 $ 2,230 $ 4,284 $ 4,405
Other Nonoperating Income (Expense) 33 87 107 95
Gain (loss) recognized in other comprehensive income (24) 42 9 74
Net income of reportable segments 104 281 313 457
Reclassification out of Accumulated Other Comprehensive Income [Member]        
Cost of sales 15 11 21 18
Other Nonoperating Income (Expense) (1) (1) (1) (2)
Net income of reportable segments 14 10 20 16
Foreign Exchange Contract [Member]        
Cost of sales $ (24) $ 42 $ 9 $ 74
v3.24.2.u1
Note 12 - Financial Instruments - Summary of Effect of Undesignated Derivative Financial Instruments on Consolidated Financial Statements (Details) - Not Designated as Hedging Instrument [Member] - USD ($)
$ in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Gain (loss) recognized in income $ 7 $ 131 $ 24 $ 136
Foreign Exchange Contract [Member]        
Gain (loss) recognized in income (13) 15 (35) 28
Translated Earnings Contracts [Member]        
Gain (loss) recognized in income 27 116 66 108
Currency Swap [Member]        
Gain (loss) recognized in income $ (7) $ (7)
v3.24.2.u1
Note 13 - Shareholders' Equity (Details Textual) - USD ($)
$ / shares in Units, $ in Thousands
 3 Months Ended 6 Months Ended
Jun. 26, 2024
Apr. 08, 2023
Apr. 08, 2022
Apr. 08, 2021
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Jan. 16, 2021
Dec. 31, 2020
Dec. 31, 2019
Payments for Repurchase of Common Stock             $ 105,000      
Share Repurchase Agreement [Member] | Samsung [Member]                      
Stock Repurchased and Retired During Period, Shares (in shares)       35,000,000              
Payments for Repurchase of Common Stock       $ 1,500,000              
Number of Shares Held by Counter Party subject to Seven Year Lock-up Period (in shares)       58,000,000              
Share Repurchase Program, Remaining Authorized, Number of Shares (in shares)       22,000,000              
Share Repurchase Agreement, Make-whole payment, Cap, Percentage       5.00%              
Liabilities for Freestanding Written Put Option         $ 0   0        
The 2018 and 2019 Repurchase Programs [Member] | Samsung [Member]                      
Payments for Repurchase of Common Stock   $ 507,000 $ 507,000 $ 507,000              
The 2019 Repurchase Program [Member]                      
Payments for Repurchase of Common Stock         105,400   105,400        
Stock Repurchase Program, Authorized Amount                     $ 5,000,000
Share Repurchase Program, Remaining Authorized, Amount         $ 3,200,000   $ 3,200,000        
Stock Repurchased During Period, Shares (in shares)         3,000,000 0 3,000,000 0      
Series A Convertible Preferred Stock [Member]                      
Preferred Stock, Shares Outstanding (in shares)                   2,300  
Preferred Stock, Convertible, Shares Issuable (in shares)                 115,000,000    
Converted from Preferred Stock [Member]                      
Common Stock, Shares, Outstanding (in shares)       80,000,000              
O2024Q3Dividends [Member]                      
Dividends Payable, Amount Per Share (in dollars per share) $ 0.28                    
Dividends Payable, Date Declared Jun. 26, 2024                    
Dividends Payable, Date to be Paid Sep. 27, 2024                    
v3.24.2.u1
Note 13 - Shareholders' Equity- Summary of Changes in Foreign Currency Translation Adjustment Component of Accumulated Other Comprehensive Loss (Details) - USD ($)
$ in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Balance $ 11,559 $ 12,207 $ 11,868 $ 12,275
Loss on foreign currency translation, net of tax benefit - $6, $3, $29, $27 (222) (318) (552) (402)
Net current-period other comprehensive loss, net of tax (217) (302) (544) (369)
Balance 10,927 11,710 10,927 11,710
Accumulated Foreign Currency Adjustment Attributable to Parent [Member]        
Balance (2,272) (1,796) (1,942) (1,712)
Loss on foreign currency translation, net of tax benefit - $6, $3, $29, $27 (212) (310) (543) (393)
Equity method affiliates (10) (8) (9) (9)
Net current-period other comprehensive loss, net of tax (222) (318) (552) (402)
Balance $ (2,494) $ (2,114) $ (2,494) $ (2,114)
v3.24.2.u1
Note 13 - Shareholders' Equity- Summary of Changes in Foreign Currency Translation Adjustment Component of Accumulated Other Comprehensive Loss (Details) (Parentheticals) - USD ($)
$ in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Accumulated Foreign Currency Adjustment Attributable to Parent [Member]        
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Tax $ 6 $ 3 $ 29 $ 27
v3.24.2.u1
Note 14 - Share-based Compensation (Details Textual) - USD ($)
$ in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Share-Based Payment Arrangement, Expense $ 66 $ 59 $ 126 $ 111
v3.24.2.u1
Note 14 - Share-based Compensation - Summary of Restricted Stock and Restricted Stock Units (Details) - Restricted Stock and Restricted Stock Units [Member]
shares in Thousands
 6 Months Ended
Jun. 30, 2024
$ / shares
shares
Beginning Non-vested shares and share units, number of shares (in shares) | shares 13,321
Beginning Non-vested shares and share units, weighted average grant-date fair value (in dollars per share) | $ / shares $ 33.89
Granted, number of shares (in shares) | shares 1,364
Granted, weighted average grant-date fair value (in dollars per share) | $ / shares $ 32.84
Vested, number of shares (in shares) | shares (4,047)
Vested, weighted average grant-date fair value (in dollars per share) | $ / shares $ 36.11
Forfeited, number of shares (in shares) | shares (316)
Forfeited, weighted average grant-date fair value (in dollars per share) | $ / shares $ 34.56
Ending Non-vested shares and share units, number of shares (in shares) | shares 10,322
Ending Non-vested shares and share units, weighted average grant-date fair value (in dollars per share) | $ / shares $ 32.86
v3.24.2.u1
Note 14 - Share-based Compensation - Summary of Performance-based Restricted Stock Units (Details) - Performance Shares [Member]
shares in Thousands
 6 Months Ended
Jun. 30, 2024
$ / shares
shares
Beginning Non-vested shares and share units, number of shares (in shares) | shares 2,026
Beginning Non-vested shares and share units, weighted average grant-date fair value (in dollars per share) | $ / shares $ 38.89
Granted, number of shares (in shares) | shares 1,647
Granted, weighted average grant-date fair value (in dollars per share) | $ / shares $ 32.7
Vested, number of shares (in shares) | shares (1,122)
Vested, weighted average grant-date fair value (in dollars per share) | $ / shares $ 41.7
Performance adjustments (in shares) | shares 916
Performance adjustments (in dollars per share) | $ / shares $ 32.84
Forfeited, number of shares (in shares) | shares (56)
Forfeited, weighted average grant-date fair value (in dollars per share) | $ / shares $ 33.1
Ending Non-vested shares and share units, number of shares (in shares) | shares 3,411
Ending Non-vested shares and share units, weighted average grant-date fair value (in dollars per share) | $ / shares $ 33.61
v3.24.2.u1
Note 14 - Share-based Compensation - Summary of Stock Options Outstanding (Details)
$ / shares in Units, shares in Thousands, $ in Thousands
 6 Months Ended
Jun. 30, 2024
USD ($)
$ / shares
shares
Beginning Options Outstanding, number of shares (in shares) | shares 7,499
Beginning Options Outstanding, weighted average exercise price (in dollars per share) | $ / shares $ 23.82
Exercised, number of shares (in shares) | shares (1,537)
Exercised, weighted average exercise price (in dollars per share) | $ / shares $ 22.05
Expired, number of shares (in shares) | shares (5)
Expired, weighted average exercise price (in dollars per share) | $ / shares $ 20.19
Ending Options Outstanding, number of shares (in shares) | shares 5,957
Ending Options Outstanding, weighted average exercise price (in dollars per share) | $ / shares $ 24.28
Options Outstanding, weighted average remaining contractual term (Year) 4 years 7 months 20 days
Options Outstanding, aggregate intrinsic value | $ $ 86,768
Options vested and exercisable, number of shares (in shares) | shares 5,957
Options vested and exercisable, weighted average exercise price (in dollars per share) | $ / shares $ 24.28
Options vested and exercisable, weighted average remaining contractual term (Year) 4 years 7 months 20 days
Options vested and exercisable, aggregate intrinsic value | $ $ 86,768
v3.24.2.u1
Note 15 - Reportable Segments (Details Textual)
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Number of Reportable Segments     5  
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent 21.00% 21.00% 21.00% 21.00%
Japan, Yen        
Foreign Currency Exchange Rate, Translation 107 107 107 107
Korea (South), Won        
Foreign Currency Exchange Rate, Translation 1,175 1,175 1,175 1,175
China, Yuan Renminbi        
Foreign Currency Exchange Rate, Translation 6.7 6.7 6.7 6.7
Taiwan, New Dollars        
Foreign Currency Exchange Rate, Translation 31 31 31 31
Euro Member Countries, Euro        
Foreign Currency Exchange Rate, Translation 0.81 0.81 0.81 0.81
Mexico, Pesos        
Foreign Currency Exchange Rate, Translation 20 20 20 20
v3.24.2.u1
Note 15 - Reportable Segments - Schedule of Reportable Segments (Details) - USD ($)
$ in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Depreciation (1)     $ 614 $ 622
Research, development and engineering expenses (2) $ 262 $ 263 520 517
Income tax (provision) benefit (3) 50 106 121 143
Net income attributable to Corning Incorporated 104 281 313 457
Operating Segments [Member]        
Net sales of reportable segments 3,604 3,482 6,862 6,849
Depreciation (1) [1] 305 307 610 614
Research, development and engineering expenses (2) [2] 222 209 438 418
Income tax (provision) benefit (3) [3] (152) (144) (277) (272)
Net income attributable to Corning Incorporated 555 525 1,008 990
Optical Communications [Member] | Operating Segments [Member]        
Net sales of reportable segments 1,113 1,066 2,043 2,191
Depreciation (1) [1] 66 64 132 130
Research, development and engineering expenses (2) [2] 66 56 131 116
Income tax (provision) benefit (3) [3] (41) (38) (69) (81)
Net income attributable to Corning Incorporated 143 140 243 299
Display Technologies [Member] | Operating Segments [Member]        
Net sales of reportable segments 1,014 928 1,886 1,691
Depreciation (1) [1] 110 120 226 243
Research, development and engineering expenses (2) [2] 28 24 54 47
Income tax (provision) benefit (3) [3] (68) (55) (121) (97)
Net income attributable to Corning Incorporated 258 208 459 368
Specialty Materials [Member] | Operating Segments [Member]        
Net sales of reportable segments 501 423 955 829
Depreciation (1) [1] 40 39 76 74
Research, development and engineering expenses (2) [2] 57 57 117 110
Income tax (provision) benefit (3) [3] (17) (9) (28) (19)
Net income attributable to Corning Incorporated 63 33 107 72
Environmental Technologies [Member] | Operating Segments [Member]        
Net sales of reportable segments 431 457 886 888
Depreciation (1) [1] 32 32 64 65
Research, development and engineering expenses (2) [2] 26 23 49 47
Income tax (provision) benefit (3) [3] (26) (28) (54) (50)
Net income attributable to Corning Incorporated 97 107 202 189
Life Science Products [Member] | Operating Segments [Member]        
Net sales of reportable segments 249 231 485 487
Depreciation (1) [1] 17 17 34 34
Research, development and engineering expenses (2) [2] 6 8 12 18
Income tax (provision) benefit (3) [3] (4) (3) (8) (5)
Net income attributable to Corning Incorporated 17 11 30 20
Hemlock and Emerging Growth Businesses [Member] | Operating Segments [Member]        
Net sales of reportable segments 296 377 607 763
Depreciation (1) [1] 40 35 78 68
Research, development and engineering expenses (2) [2] 39 41 75 80
Income tax (provision) benefit (3) [3] 4 (11) 3 (20)
Net income attributable to Corning Incorporated $ (23) $ 26 $ (33) $ 42
[1] Depreciation expense for Corning’s reportable segments and Hemlock and Emerging Growth Businesses includes an allocation of depreciation of corporate property not specifically identifiable to a segment.
[2] Research, development and engineering expenses include direct project spending that is identifiable to a segment.
[3] Income tax (provision) benefit reflects a tax rate of 21%.
v3.24.2.u1
Note 15 - Reportable Segments - Reconciliation of Reportable Segments and All Other Net Sales to Consolidated Net Sales (Details) - USD ($)
$ in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Consolidated net sales $ 3,251 $ 3,243 $ 6,226 $ 6,421
Operating Segments [Member]        
Net sales of reportable segments 3,604 3,482 6,862 6,849
Impact of constant-currency reporting (1) [1] (353) (239) (636) (428)
Operating Segments [Member] | Reportable Segments [Member]        
Net sales of reportable segments 3,308 3,105 6,255 6,086
Operating Segments [Member] | Hemlock and Emerging Growth Businesses [Member]        
Net sales of reportable segments $ 296 $ 377 $ 607 $ 763
[1] This amount primarily represents the impact of foreign currency adjustments in the Display Technologies segment.
v3.24.2.u1
Note 15 - Reportable Segments - Reconciliation of Reportable Segment Net Income (Loss) to Consolidated Net Income (Details) - USD ($)
$ in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Net income of reportable segments $ 104 $ 281 $ 313 $ 457
Translated earnings contract gain, net (Note 12) 27 116 66 108
Research, development, and engineering expenses (1) (262) (263) (520) (517)
Amortization of intangibles (30) (31) (60) (62)
Interest expense, net (84) (81) (167) (157)
Provision for income taxes (Note 4) (50) (106) (121) (143)
Other corporate items (33) (87) (107) (95)
Operating Segments [Member]        
Net income of reportable segments 555 525 1,008 990
Impact of constant-currency reporting (1) [1] (353) (239) (636) (428)
Research, development, and engineering expenses (1) [2] (222) (209) (438) (418)
Provision for income taxes (Note 4) [3] 152 144 277 272
Operating Segments [Member] | Reportable Segments [Member]        
Net income of reportable segments 578 499 1,041 948
Operating Segments [Member] | Nonreportable Segments [Member]        
Net income of reportable segments (23) 26 (33) 42
Segment Reporting, Reconciling Item, Excluding Corporate Nonsegment [Member]        
Net income of reportable segments 104 281 313 457
Impact of constant-currency reporting (1) (267) (174) (493) (323)
Translated earnings contract gain, net (Note 12) 27 116 66 108
Translation gain on Japanese yen-denominated debt 54 109 135 127
Research, development, and engineering expenses (1) [4] (40) (42) (82) (87)
Amortization of intangibles (30) (31) (60) (62)
Interest expense, net (65) (61) (126) (117)
Provision for income taxes (Note 4) 102 38 156 129
Severance charges (3) (73) (3) (78)
Capacity optimization and other charges and credits (2) [5] (135) (64) (126) (125)
Other corporate items $ (94) $ (62) $ (162) $ (105)
[1] This amount primarily represents the impact of foreign currency adjustments in the Display Technologies segment.
[2] Research, development and engineering expenses include direct project spending that is identifiable to a segment.
[3] Income tax (provision) benefit reflects a tax rate of 21%.
[4] Amount does not include research, development and engineering expense related to severance charges.
[5] Amount includes charges associated with impairment losses, asset write-offs, accelerated depreciation, disposal costs and inventory write-downs. Refer to Note 2 (Restructuring, Impairment and Other Charges and Credits) for additional information.
Corning (NYSE:GLW)
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Corning (NYSE:GLW)
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から 11 2023 まで 11 2024 Corningのチャートをもっと見るにはこちらをクリック