0000024741 CORNING INC /NY false --12-31 Q3 2023 30 40 14,257 14,147 0.50 0.50 3.8 3.8 1.8 1.8 980 977 0.28 0.56 0.27 0.54 21 21 300 550 0 850 850 507 0 0 5 5 5 21 21 Japanese yen-denominated option contracts include zero-cost collars, purchased put and call options. 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 call option can be exercised at maturity. Depreciation expense for Corning’s reportable segments includes an allocation of depreciation of corporate property not specifically identifiable to a segment. Tax effects are not significant. For the three and nine months ended September 30, 2023, the amount recorded in cost of sales in the consolidated statements of income was $10 million and $51 million, respectively. For the three and nine months ended September 30, 2022, the amount recorded in cost of sales in the consolidated statements was not material. Derivative assets and liabilities mainly consist of foreign exchange contracts which were measured using observable inputs for similar assets and liabilities. For the three and nine months ended September 30, 2023, the amount recorded in cost of sales in the consolidated statements of income was $53 million and $145 million, respectively. The activity primarily related to asset write-offs during the period. For the three and nine months ended September 30, 2022, the amount recorded in cost of sales in the consolidated statements of income was $124 million and $192 million, respectively. The activity primarily related to capacity optimization of an emerging growth business. Treasury stock includes the deemed surrender to the Company of common stock to satisfy employee tax withholding obligations. As of September 30, 2023 and December 31, 2022, derivatives designated as hedging instruments include foreign exchange cash flow hedges with total notional amounts of $301 million and $419 million, respectively, and fair value hedges of leased precious metals with total notional amounts of 21,652 troy ounces and 23,152 troy ounces, respectively. Income tax provision reflects a tax rate of 21%. This amount primarily represents the impact of foreign currency adjustments in the Display Technologies segment. All amounts are after tax. Amounts in parentheses indicate debits to accumulated other comprehensive (loss) income. Denominational currencies for other average rate forward contracts include the Chinese yuan, New Taiwan dollar, and British pound. Research, development and engineering expenses include direct project spending that is identifiable to a segment. For the three and nine months ended September 30, 2023, amounts are net of tax benefit of $14 million and $33 million, respectively. For the three and nine months ended September 30, 2022, amounts are net of tax benefit of $49 million and $87 million, respectively. Amount does not include research, development, and engineering expense related to restructuring, impairment and other charges and credits. 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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 September 30, 2023

 

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.        ☐

 

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 October 26, 2023

 
 

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

 

853,174,879 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

39
   

Item 4. Controls and Procedures

39
   

PART II – OTHER INFORMATION

  
   

Item 1. Legal Proceedings

40
   

Item 1A. Risk Factors

40
   

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

41
   
Item 5. Other Information 41
   

Item 6. Exhibits

42
   

Signatures

43

 

2
Table of Contents

 

 

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

 

    Three months ended     Nine months ended  
   

September 30,

    

September 30,

  
   

2023

    

2022

    

2023

    

2022

  

Net sales

   $ 3,173     $ 3,488     $ 9,594     $ 10,783  

Cost of sales

     2,169       2,426       6,574       7,192  
                                 

Gross margin

     1,004       1,062       3,020       3,591  
                                 

Operating expenses:

                                

Selling, general and administrative expenses

     468       461       1,329       1,381  

Research, development and engineering expenses

     270       278       787       766  

Amortization of purchased intangibles

     30       31       92       92  
                                 

Operating income

     236       292       812       1,352  
                                 

Interest income

     10       3       25       9  

Interest expense

     (82 )     (73 )     (239 )     (216 )

Translated earnings contract gain (loss), net (Note 10)

     20       (68 )     128       257  

Other income, net

     33       106       128       391  
                                 

Income before income taxes

     217       260       854       1,793  

Provision for income taxes (Note 3)

     (35 )     (34 )     (178 )     (380 )
                                 

Net income

     182       226       676       1,413  
                                 

Net income attributable to non-controlling interest

     (18 )     (18 )     (55 )     (61 )
                                 

Net income attributable to Corning Incorporated

   $ 164     $ 208     $ 621     $ 1,352  
                                 

Earnings per common share available to common shareholders:

                                

Basic (Note 4)

   $ 0.19     $ 0.25     $ 0.73     $ 1.60  

Diluted (Note 4)

   $ 0.19     $ 0.24     $ 0.72     $ 1.58  

 

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

    

Nine months ended

  
   

September 30,

    

September 30,

  
   

2023

    

2022

    

2023

    

2022

  

Net income

   $ 182     $ 226     $ 676     $ 1,413  
                                 

Foreign currency translation adjustments and other

     (191 )     (685 )     (593 )     (1,535 )

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

     (1 )     3       (9 )     (49 )

Realized and unrealized (losses) gains on derivatives

     (11 )     (15 )     30       (32 )

Other comprehensive loss, net of tax

     (203 )     (697 )     (572 )     (1,616 )
                                 

Comprehensive (loss) income

     (21 )     (471 )     104       (203 )
                                 

Comprehensive income attributable to non-controlling interest

     (18 )     (18 )     (55 )     (61 )
                                 

Comprehensive (loss) income attributable to Corning Incorporated

   $ (39 )   $ (489 )   $ 49     $ (264 )

 

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)  

 

  

September 30,

  

December 31,

 
  2023  2022 

Assets

        
         

Current assets:

        

Cash and cash equivalents

 $1,639  $1,671 

Trade accounts receivable, net of doubtful accounts - $30 and $40

  1,725   1,721 

Inventories (Note 5)

  2,655   2,904 

Other current assets

  1,279   1,157 

Total current assets

  7,298   7,453 
         

Property, plant and equipment, net of accumulated depreciation - $14,257 and $14,147

  14,407   15,371 

Goodwill, net

  2,372   2,394 

Other intangible assets, net

  938   1,029 

Deferred income taxes (Note 3)

  1,037   1,073 

Other assets

  2,226   2,179 
         

Total Assets

 $28,278  $29,499 
         

Liabilities and Equity

        
         

Current liabilities:

        

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

 $297  $224 

Accounts payable

  1,459   1,804 

Other accrued liabilities (Notes 6 and 9)

  2,529   3,147 

Total current liabilities

  4,285   5,175 
         

Long-term debt (Note 7)

  7,210   6,687 

Postretirement benefits other than pensions (Note 8)

  406   407 

Other liabilities (Notes 6 and 9)

  4,633   4,955 

Total liabilities

  16,534   17,224 
         

Commitments and contingencies (Note 9)

          

Shareholders’ equity (Note 12):

        

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

  915   910 

Additional paid-in capital – common stock

  16,877   16,682 

Retained earnings

  16,673   16,778 

Treasury stock, at cost; Shares held: 980 million and 977 million

  (20,633)  (20,532)

Accumulated other comprehensive loss

  (2,402)  (1,830)

Total Corning Incorporated shareholders’ equity

  11,430   12,008 

Non-controlling interest

  314   267 

Total equity

  11,744   12,275 
         

Total Liabilities and Equity

 $28,278  $29,499 

 

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)  

 

  

Nine months ended

 
  

September 30,

 
  

2023

  

2022

 

Cash Flows from Operating Activities:

        

Net income

 $676  $1,413 

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

        

Depreciation

  932   1,014 

Amortization of purchased intangibles

  92   92 

Loss on disposal of assets, net

  72   110 

Severance charges

  86   8 

Severance payments

  (82)  (5)

Gain on sale of business

     (53)

Share-based compensation expense

  168   145 

Translation gain on Japanese yen-denominated debt

  (162)  (321)

Deferred tax provision

  37   58 

Translated earnings contract gain, net

  (128)  (257)

Unrealized translation loss on transactions

  58   140 

Tax deposit refund

  99    

Changes in assets and liabilities:

        

Trade accounts receivable

  (137)  161 

Inventories

  131   (637)

Other current assets

  (58)  (5)

Accounts payable and other current liabilities

  (263)  25 

Customer deposits and government incentives

  (17)  144 

Deferred income

  (11)  (15)

Other, net

  (201)  (19)

Net cash provided by operating activities

  1,292   1,998 
         

Cash Flows from Investing Activities:

        

Capital expenditures

  (1,111)  (1,201)

Proceeds from sale of equipment to related party

  67    

Proceeds from sale of business

     77 

Realized gains on translated earnings contracts and other

  270   209 

Other, net

  4   (54)

Net cash used in investing activities

  (770)  (969)
         

Cash Flows from Financing Activities:

        

Repayments of short-term borrowings and other long-term debt

  (180)  (87)

Proceeds from issuance of short-term borrowings

  30   70 

Proceeds from issuance of euro bonds and other long-term debt

  968   37 

Proceeds from other financing arrangements

  54    

Repayment of other financing arrangements

  (54)   

Payment for redemption of preferred stock

  (507)  (507)

Payments of employee withholding tax on stock awards

  (103)  (44)

Proceeds from exercise of stock options

  39   35 

Purchases of common stock for treasury

     (221)

Dividends paid

  (741)  (696)

Other, net

  (26)  (17)

Net cash used in financing activities

  (520)  (1,430)

Effect of exchange rates on cash

  (34)  (117)

Net decrease in cash and cash equivalents

  (32)  (518)

Cash and cash equivalents at beginning of period

  1,671   2,148 

Cash and cash equivalents at end of period

 $1,639  $1,630 

 

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, 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 

Net income

        164         164   18   182 

Other comprehensive loss

              (203)  (203)  (1)  (204)

Shares issued to benefit plans and for option exercises

     60            60      60 

Other, net (1)

           (3)     (3)  (1)  (4)

Balance, September 30, 2023

 $915  $16,877  $16,673  $(20,633) $(2,402) $11,430  $314  $11,744 

 

  

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, 2021

 $907  $16,475  $16,389  $(20,263) $(1,175) $12,333  $212  $12,545 

Net income

          581           581   22   603 

Other comprehensive loss

                  (187)  (187)      (187)

Purchase of common stock for treasury

              (151)      (151)      (151)

Shares issued to benefit plans and for option exercises

  1   56               57       57 

Common dividends ($0.27 per share)

          (233)          (233)      (233)

Other, net (1)

              (5)      (5)      (5)

Balance as of March 31, 2022

 $908  $16,531  $16,737  $(20,419) $(1,362) $12,395  $234  $12,629 

Net income

        563         563   21   584 

Other comprehensive loss

              (732)  (732)  (2)  (734)

Purchase of common stock for treasury

           (53)     (53)     (53)

Shares issued to benefit plans and for option exercises

  2   59            61      61 

Common dividends ($0.54 per share)

        (463)        (463)     (463)

Other, net (1)

           (37)     (37)  (5)  (42)

Balance as of June 30, 2022

 $910  $16,590  $16,837  $(20,509) $(2,094) $11,734  $248  $11,982 

Net income

        208         208   18   226 

Other comprehensive loss

              (697)  (697)  (2)  (699)

Purchase of common stock for treasury

           (17)     (17)     (17)

Shares issued to benefit plans and for option exercises

     59            59      59 

Other, net (1)

        (1)  (2)     (3)     (3)

Balance, September 30, 2022

 $910  $16,649  $17,044  $(20,528) $(2,791) $11,284  $264  $11,548 

 

(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. 

 

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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, 2022 (“2022 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 (“Hemlock”) 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. Revenue

 

Disaggregated Revenue

 

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

 

   

Three months ended

    

Nine months ended

  
   

September 30,

    

September 30,

  
   

2023

    

2022

    

2023

    

2022

  

Telecommunication products

   $ 918     $ 1,317     $ 3,109     $ 3,828  

Display products

     727       558       2,061       2,223  

Specialty glass products

     560       516       1,384       1,494  

Environmental substrate and filter products

     420       393       1,260       1,130  

Life science products

     221       297       690       908  

Polycrystalline silicon products

     230       288       765       877  

All other products

     97       119       325       323  

Total revenue

   $ 3,173     $ 3,488     $ 9,594     $ 10,783  

 

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Customer Deposits

 

As of September 30, 2023 and December 31, 2022, Corning had customer deposits of approximately $1.2 billion and $1.3 billion, respectively.  Most of these customer deposits were non-refundable and allowed customers to secure rights to products produced by Corning under long-term supply agreements.  The duration of these long-term supply agreements ranges up to 10 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  September 30, 2023 and 2022, customer deposits recognized were $6 million and $24 million, respectively.  For the nine months ended September 30, 2023 and 2022, customer deposits recognized were $88 million and $155 million, respectively.

 

Refer to Note 6 (Other Liabilities) for additional information. 

 

Deferred Revenue

 

As of September 30, 2023 and December 31, 2022, Corning had deferred revenue of approximately $854 million and $869 million, respectively.  Deferred revenue was primarily related to the performance obligations of non-refundable consideration previously received by Hemlock 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 nine months ended  September 30, 2023 and 2022, the amount of deferred revenue recognized in the consolidated statements of income was not material.

 

Refer to Note 6 (Other Liabilities) for additional information.  

  
 

3. Income Taxes

 

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

 

   

Three months ended

    

Nine months ended

  
   

September 30,

    

September 30,

  
   

2023

    

2022

    

2023

    

2022

  

Provision for income taxes

   $ (35 )   $ (34 )   $ (178 )   $ (380 )

Effective tax rate

     16.1 %     13.1 %     20.8 %     21.2 %

 

For the three months ended  September 30, 2023, the effective tax rate differed from the United States (“U.S.”) statutory rate of 21%, primarily due to differences arising from foreign earnings partially offset by changes in estimates based on the final 2022 U.S. Federal Income Tax Return.  For the nine months ended September 30, 2023, the effective tax rate differed from the U.S. statutory rate of 21%, primarily due to differences arising from foreign earnings, changes in estimates based on the final 2022 U.S. Federal Income Tax Return and adjustments related to share-based compensation, partially offset by changes in valuation allowance assessments.

 

For the three months ended September 30, 2022, the effective tax rate differed from the U.S. statutory rate of 21%, primarily due to the net impact of changes in tax legislation and changes in estimates based on the final 2021 U.S. Federal Income Tax Return, partially offset by changes in tax reserves.  For the nine months ended September 30, 2022, the effective tax rate differed from the U.S. statutory rate of 21%, primarily due to differences arising from foreign earnings and changes in tax reserves, partially offset by the net impact of changes in tax legislation, changes in estimates based on the final 2021 U.S. Federal Income Tax Return and adjustments related to share-based compensation.

 

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 $255 million and $349 million as of September 30, 2023 and December 31, 2022, 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.

 

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4. 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

  

Nine months ended

 
  

September 30,

  

September 30,

 
  

2023

  

2022

  

2023

  

2022

 

Net income attributable to Corning Incorporated

 $164  $208  $621  $1,352 
                 

Weighted-average common shares outstanding – basic

  850   843   848   843 

Effect of dilutive securities:

                

Stock options and other awards

  9   12   10   14 

Weighted-average common shares outstanding – diluted

  859   855   858   857 

Basic earnings per common share

 $0.19  $0.25  $0.73  $1.60 

Diluted earnings per common share

 $0.19  $0.24  $0.72  $1.58 
                 

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

                

Stock options and other awards

  3   3   3   2 

 
 

5. Inventories

 

Inventories consisted of the following (in millions):

 

   

September 30,

    

December 31,

  
   

2023

    

2022

  

Finished goods

   $ 1,226     $ 1,315  

Work in process

     513       571  

Raw materials and accessories

     479       537  

Supplies and packing materials

     437       481  

Inventories

   $ 2,655     $ 2,904  

 

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6. Other Liabilities

 

Other liabilities consisted of the following (in millions):

 

   

September 30,

    

December 31,

  
   

2023

    

2022

  

Current liabilities:

                

Wages and employee benefits

   $ 505     $ 727  

Income taxes

     125       127  

Derivative instruments (Note 10)

     150       174  

Deferred revenue (Note 2)

     185       144  

Customer deposits (Note 2)

     162       132  

Share repurchase liability (Note 12)

           506  

Short-term operating leases

     108       111  

Other current liabilities

     1,294       1,226  

Other accrued liabilities

   $ 2,529     $ 3,147  
                 

Non-current liabilities:

                

Defined benefit pension plan liabilities

   $ 685     $ 668  

Derivative instruments (Note 10)

     65       17  

Deferred revenue (Note 2)

     669       725  

Customer deposits (Note 2)

     1,044       1,137  

Deferred tax liabilities

     201       243  

Long-term operating leases

     842       795  

Other non-current liabilities

     1,127       1,370  

Other liabilities

   $ 4,633     $ 4,955  

 
 

7. 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 $6.1 billion as of  September 30, 2023 and December 31, 2022, respectively, compared to the carrying value of $7.2 billion and $6.7 billion as of  September 30, 2023 and December 31, 2022, 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.

 

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 September 30, 2023, the U.S. dollar equivalent carrying value of the euro-denominated long-term debt was $892 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 10 (Hedging Activities) for additional information.

 

Corning had no outstanding commercial paper as of September 30, 2023 or December 31, 2022.

 

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8. Employee Retirement Plans

 

Corning has defined benefit pension plans covering certain domestic and international employees. The Company may contribute, as necessary, an amount exceeding the minimum requirements to achieve the Company’s long-term funding targets. During 2023, the Company made cash contributions of $25 million to its international pension plans.  The Company does not expect to make additional contributions in the fourth quarter of 2023.

 

The following table presents the components of net periodic 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

    

Nine months ended

    

Three months ended

    

Nine months ended

  
   

September 30,

    

September 30,

    

September 30,

    

September 30,

  
   

2023

    

2022

    

2023

    

2022

    

2023

    

2022

    

2023

    

2022

  

Service cost

   $ 25     $ 32     $ 75     $ 96     $ 1     $ 3     $ 4     $ 7  

Interest cost

     45       28       133       82       6       3       17       11  

Expected return on plan assets

     (46 )     (55 )     (138 )     (164 )                        

Amortization of actuarial net gain

                             (6 )           (17 )      

Amortization of prior service cost (credit)

     2       1       5       4       (2 )     (2 )     (4 )     (4 )

Recognition of actuarial loss (gain)

     12             (16 )     22             (2 )           (3 )

Special termination benefit charge

                 5                                

Total pension and postretirement benefit expense (income)

   $ 38     $ 6     $ 64     $ 40     $ (1 )   $ 2     $ —     $ 11  

 
 

9. 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. Corning does not believe that its indemnity obligation will be material.

 

Dow Corning Environmental Claims

 

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.  In the event Dow is liable for these claims, Corning may be required to indemnify Dow for up to 50% of that liability, subject to certain conditions and limits.  As of September 30, 2023, 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  September 30, 2023 and December 31, 2022, Corning had accrued approximately $90 million and $109 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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10. Hedging Activities

 

Designated Hedges

 

Corning uses over-the-counter (“OTC”) foreign exchange forward contracts designated as cash flow hedges to reduce the risk that movements in exchange rates will adversely affect the net cash flows resulting from the sale of products to customers and purchases from suppliers. The total notional amounts for foreign currency cash flow hedges are $301 million and $419 million as of  September 30, 2023 and December 31, 2022, respectively, with maturities through 2024. Corning defers gains and losses related to cash flow hedges into accumulated other comprehensive loss on the consolidated balance sheets until the hedged item impacts earnings. As of  September 30, 2023, the amount expected to be reclassified into earnings within the next 12 months is a pre-tax gain of $43 million.

 

Corning has entered into leases of precious metals, with maturities through 2025. To offset the risk of changes in the fair value of the Company’s separate accounting pool of leased precious metals due to adverse changes in the respective market prices, Corning designated the bifurcated embedded derivatives included in these leases as fair value hedges. The gain or loss on the derivatives, as well as the offsetting loss or gain on the hedged item attributable to the hedged risk, are recognized in current earnings. The amounts representing the time value component of the derivatives are excluded from the assessment of effectiveness and amortized in earnings. The impact of the excluded component on Corning’s other comprehensive loss and earnings is not material. 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 $89 million and $278 million, respectively, as of  September 30, 2023 and December 31, 2022. The carrying amount of the leased precious metals pool includes cumulative fair value losses of $261 million and $95 million as of  September 30, 2023 and December 31, 2022, respectively. These losses are offset by changes in the fair value of the derivatives.

 

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. Changes in the value of these hedging instruments due to foreign currency gains or losses are deferred in other comprehensive loss on the consolidated statements of comprehensive (loss) income, within the foreign currency translation adjustments and other line, and will remain in accumulated other comprehensive loss until the hedged investment is sold or substantially liquidated. We evaluate the effectiveness of the net investment hedges each quarter using the critical terms match method.  As of  September 30, 2023, the net investment hedges are deemed to be effective.  During the three and nine months ended September 30, 2023, foreign currency gains of $29 million and $36 million, respectively, associated with these net investment hedges were recognized in other comprehensive loss.

 

Refer to Note 7 (Debt) for additional information.

 

Undesignated Hedges

 

Corning uses OTC foreign exchange forward and option contracts to offset economic currency risks. These contracts are not designated as hedging instruments for accounting purposes. The undesignated hedges limit exposure to foreign currency fluctuations related to certain subsidiaries’ monetary assets, monetary liabilities and net earnings in foreign currencies.

 

A significant portion of the Company’s non-U.S. revenue and expenses are denominated in Japanese yen, South Korean won, new Taiwan dollar, Chinese yuan and euro. When this revenue and expenses are translated to U.S. dollars, the Company is exposed to foreign exchange rate movements. To protect translated earnings against movements in these currencies, the Company has entered into a series of average rate forwards and option contracts. Most of these contracts hedge a significant portion of the Company’s exposure to the Japanese yen and South Korean won. The Company has contracts through 2024 for the Japanese yen and 2026 for the South Korean won.

 

The fair values of these derivative contracts are recorded as either assets (gain position) or liabilities (loss position) on the consolidated balance sheets. Changes in the fair value of the derivative contracts are recorded in earnings within translated earnings contract gain (loss), net in the consolidated statements of income.

 

13
Table of Contents
 

The following table summarizes the notional amounts and respective fair values of Corning’s derivative financial instruments on a gross basis as of  September 30, 2023 and December 31, 2022 (in millions):

 

                 

Asset derivatives

  

Liability derivatives

  
   

Notional amount

  

Balance

  

Fair value

  

Balance

  

Fair value

  
   

September

    

December

  

sheet

  

September

    

December

  

sheet

  

September

    

December

  
    30, 2023     31, 2022  

location

   30, 2023     31, 2022  

location

   30, 2023     31, 2022  

Derivatives designated as hedging instruments (1)

                                                    

Foreign exchange and precious metals lease contracts (2)

   $ 301     $ 419  

Other current assets

   $ 165     $ 26  

Other accrued liabilities

         $ (1 )
                 

Other assets

     139       78                    
                                                     

Derivatives not designated as hedging instruments

                                                    

Foreign exchange contracts

     1,486       2,231  

Other current assets

     18       44  

Other accrued liabilities

   $ (23 )     (49 )

Translated earnings contracts

     5,128       7,543  

Other current assets

     380       384  

Other accrued liabilities

     (127 )     (124 )
                 

Other assets

     71       146  

Other liabilities

     (65 )     (17 )

Total derivatives

   $ 6,915     $ 10,193       $ 773     $ 678       $ (215 )   $ (191 )

 

(1) The amounts above do not include €850 million of euro-denominated debt ($892 million equivalent as of September 30, 2023), which is a non-derivative financial instrument designated as a net investment hedge.
(2)

As of  September 30, 2023 and December 31, 2022, derivatives designated as hedging instruments include foreign exchange cash flow hedges with total notional amounts of $301 million and $419 million, respectively, and fair value hedges of leased precious metals with total notional amounts of 21,652 troy ounces and 23,152 troy ounces, respectively. 

 

The following table summarizes the total notional amounts for translated earnings contracts as of  September 30, 2023 and December 31, 2022 (in billions):

 

   

September 30,

    

December 31,

  
   

2023

    

2022

  

Average rate forward contracts:

                

Japanese yen-denominated

   $ 0.2     $ 0.1  

South Korean won-denominated

     1.7       2.1  

Other foreign currencies (1)

     1.1       0.7  

Option contracts:

                

Japanese yen-denominated (2)

     2.1       4.6  

Total notional amount for translated earning contracts

   $ 5.1     $ 7.5  

 

(1) Denominational currencies for other average rate forward contracts include the Chinese yuan, New Taiwan dollar, euro and British pound.
(2) Japanese yen-denominated option contracts include purchased put and call options, knock-out options and zero-cost collars. With respect to the zero-cost collars, the total 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 call option can be exercised at maturity.

 

14
Table of Contents
 

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 September 30, 2023 and December 31, 2022 is $91 million and $19 million, respectively.

 

   

Three months ended September 30,

  
                 

Location of gain (loss)

                
   

Gain recognized

  

reclassified from

  

Gain (loss) reclassified

  

Derivative hedging

  

in other comprehensive

  

accumulated

  

from accumulated

  

relationships for cash

  

loss (OCL)

  

OCL into income

  

OCL into income

  

flow and fair value hedges

  

2023

    

2022

  

effective (ineffective)

  

2023

    

2022

  
                                   
                 

Net sales

           $ 15  
                 

Cost of sales

   $ 14       6  

Foreign exchange contracts and other

   $ 28     $ 4  

Other income, net

     (1 )     (1 )

Total cash flow and fair value hedges

   $ 28     $ 4       $ 13     $ 20  

 

   

Nine months ended September 30,

  
                 

Location of gain (loss)

                
   

Gain recognized

  

reclassified from

  

Gain (loss) reclassified

  

Derivative hedging

  

in other comprehensive

  

accumulated

  

from accumulated

  

relationships for cash

  

loss (OCL)

  

OCL into income

  

OCL into income

  

flow and fair value hedges

  

2023

    

2022

  

effective (ineffective)

  

2023

    

2022

  
                                   
                 

Net sales

           $ 38  
                 

Cost of sales

   $ 32       19  

Foreign exchange contracts and other

   $ 102     $ 24  

Other income, net

     (3 )     (3 )

Total cash flow and fair value hedges

   $ 102     $ 24       $ 29     $ 54  

 

     

Gain (loss) recognized in income

  
     

Three months ended

    

Nine months ended

  
 

Location of gain (loss)

  

September 30,

    

September 30,

  

Undesignated derivatives

recognized in income

  

2023

    

2022

    

2023

    

2022

  
                                   

Foreign exchange contracts

Other income, net

   $ (5 )   $ 11     $ 23     $ 70  

Translated earnings contracts

Translated earnings contract gain (loss), net

     20       (68 )     128       257  

Total undesignated

   $ 15     $ (57 )   $ 151     $ 327  

 

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11. Fair Value Measurements

 

The following table provides fair value measurement information for the Company’s major categories of financial assets and liabilities measured on a recurring basis (in millions):

 

   

September 30, 2023

    

December 31, 2022

  
   

Total

    

Level 1

    

Level 2

    

Level 3

    

Total

    

Level 1

    

Level 2

    

Level 3

  

Current assets:

                                                                

Other current assets (1)

   $ 617     $ 4     $ 563     $ 50     $ 505     $ 2     $ 454     $ 49  

Non-current assets:

                                                                

Other assets (1)

   $ 212     $ 2     $ 210             $ 225             $ 224     $ 1  

Current liabilities:

                                                                

Other accrued liabilities (1)

   $ 150             $ 150             $ 174             $ 174          

Non-current liabilities:

                                                                

Other liabilities (1)

   $ 82             $ 82             $ 34             $ 34          

 

(1) Derivative assets and liabilities include foreign exchange and precious metals lease contracts which were measured using observable inputs for similar assets and liabilities.

 

There were no significant financial assets and liabilities measured on a non-recurring basis as of September 30, 2023 and December 31, 2022.

 
 

12. Shareholders’ Equity

 

Fixed Rate Cumulative Convertible Preferred Stock, Series A

 

We 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, we executed a 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 2022 and 2021. The remaining payment of approximately $507 million was made in April 2023.

 

Share Repurchase Program

 

In 2019, the Board authorized the repurchase of up to $5.0 billion of common stock (“2019 Authorization”).

 

During the three and nine months ended  September 30, 2022, the Company repurchased 0.5 million shares and 6.0 million shares, respectively, of common stock on the open market for approximately $17 million and $221 million, respectively, as part of its 2019 Authorization. No shares were purchased on the open market during the three and nine months ended September 30, 2023.

 

As of September 30, 2023, approximately $3.3 billion remains available under the Company’s 2019 Authorization.

 

Common Stock Dividends

 

On October 4, 2023, Corning’s Board of Directors declared a dividend of $0.28 per share of common stock.  The dividend will be payable on December 15, 2023.

 

Accumulated Other Comprehensive Loss

 

For the three and nine months ended September 30, 2023 and 2022, the change in accumulated other comprehensive loss was primarily related to the foreign currency translation adjustments.

 

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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) (1):

 

  

Three months ended

  

Nine months ended

 
  

September 30,

  

September 30,

 
  

2023

  

2022

  

2023

  

2022

 

Beginning balance

 $(2,114) $(1,783) $(1,712) $(933)

Loss on foreign currency translation (2)

  (195)  (664)  (588)  (1,497)

Equity method affiliates (3)

  4   (21)  (5)  (38)

Net current-period other comprehensive loss

  (191)  (685)  (593)  (1,535)

Ending balance

 $(2,305) $(2,468) $(2,305) $(2,468)

 

(1)

All amounts are after tax. Amounts in parentheses indicate debits to accumulated other comprehensive loss.

(2)

For the three and nine months ended September 30, 2023, amounts are net of tax benefit of $14 million and $33 million, respectively.  For the three and nine months ended September 30, 2022, amounts are net of tax benefit of $49 million and $87 million, respectively.

(3)

Tax effects are not significant.

 
 

13. Share-Based Compensation

 

Total share-based compensation cost was $57 million and $168 million for the three and nine months ended September 30, 2023, respectively, and $52 million and $145 million for the three and nine months ended September 30, 2022, 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 nine months ended September 30, 2023:

 

      

Weighted

 
  

Number

  

average

 
  

of shares

  

grant-date

 
  

(in thousands)

  

fair value

 

Non-vested shares and share units as of December 31, 2022

  11,299  $29.19 

Granted

  7,221   35.06 

Vested

  (4,462)  23.71 

Forfeited

  (534)  33.97 

Non-vested shares and share units as of September 30, 2023

  13,524  $33.94 


Performance-Based Restricted Stock Units

 

The following table summarizes the changes in non-vested performance-based restricted stock units for the nine months ended September 30, 2023:

 

      

Weighted

 
  

Number

  

average

 
  

of shares

  

grant-date

 
  

(in thousands)

  

fair value

 

Non-vested share units as of December 31, 2022

  4,696  $35.41 

Granted

  1,674   35.08 

Vested

  (3,586)  33.37 

Performance adjustments

  (406)  36.40 

Forfeited

  (37)  36.08 

Non-vested share units as of September 30, 2023

  2,341  $38.62 

 

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Stock Options

 

The following table summarizes information concerning stock options as of  September 30, 2023 and the related activity for the nine months ended September 30, 2023:

 

          

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, 2022

  9,665  $22.92         

Exercised

  (1,981)  19.74         

Forfeited and expired

  (48)  19.65         

Options outstanding as of September 30, 2023

  7,636   23.76   5.20  $55,832 

Options vested and exercisable as of September 30, 2023

  7,636   23.76   5.20   55,832 

 

There were no stock options granted during the nine months ended September 30, 2023 or 2022. 

 
 

14. 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.  The net sales for this group are primarily attributable to Hemlock, which is 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.  

  

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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 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.  The most significant constant-currency adjustment relates to the Japanese yen exposure within the Display Technologies segment.  Management utilizes constant-currency reporting based on internally-derived rates, as detailed below, which are closely aligned with the currencies we have hedged. 

 

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.  Further, it reflects the underlying economics of the translated earnings contracts used to mitigate the impact of changes in currency exchange rates on our earnings and cash flows.

 

Constant-currency rates are as follows and are applied to all periods presented:

 

 

Currency

 

Japanese yen

 

Korean won

 

Chinese yuan

 

New Taiwan dollar

 

Euro

 

Rate

 

¥107

 

₩1,175

 

¥6.7

 

NT$31

 

€.81

 

In addition, certain income and expenses are excluded from segment net income and included in the unallocated amounts in the reconciliation of reportable segment net income to consolidated net income. 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 to consolidated net income. Segment net income (loss) may not be consistent with measures used by other companies.

 

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Segment Information (in millions):

 

                 Hemlock    
                 and    
                 

Emerging

    
  

Optical

  

Display

  

Specialty

  

Environmental

  

Life

  

Growth

     
  

Communications

  

Technologies

  

Materials

  

Technologies

  

Sciences

  

Businesses

  

Total

 

Three months ended September 30, 2023

                            

Segment net sales

 $918  $972  $563  $449  $230  $327  $3,459 

Depreciation (1)

 $65  $119  $37  $32  $18  $37  $308 

Research, development and engineering expenses (2)

 $60  $26  $62  $26  $7  $41  $222 

Income tax provision (3)

 $(24) $(64) $(19) $(27) $(4) $(2) $(140)

Segment net income (loss)

 $91  $242  $72  $99  $13  $(8) $509 

 

                      

Hemlock

     
                      

and

     
                      

Emerging

     
  

Optical

  

Display

  

Specialty

  

Environmental

  

Life

  

Growth

     
  

Communications

  

Technologies

  

Materials

  

Technologies

  

Sciences

  

Businesses

  

Total

 

Three months ended September 30, 2022

                            

Segment net sales

 $1,317  $686  $519  $425  $312  $407  $3,666 

Depreciation (1)

 $58  $124  $36  $31  $14  $38  $301 

Research, development and engineering expenses (2)

 $60  $31  $66  $25  $10  $43  $235 

Income tax provision (3)

 $(50) $(35) $(26) $(23) $(11) $(8) $(153)

Segment net income

 $183  $134  $96  $87  $43  $18  $561 

 

                      

Hemlock

     
                      

and

     
                      

Emerging

     
  

Optical

  

Display

  

Specialty

  

Environmental

  

Life

  

Growth

     
  

Communications

  

Technologies

  

Materials

  

Technologies

  

Sciences

  

Businesses

  

Total

 

Nine months ended September 30, 2023

                            

Segment net sales

 $3,109  $2,663  $1,392  $1,337  $717  $1,090  $10,308 

Depreciation (1)

 $195  $362  $111  $97  $52  $105  $922 

Research, development and engineering expenses (2)

 $176  $73  $172  $73  $25  $121  $640 

Income tax provision (3)

 $(105) $(161) $(38) $(77) $(9) $(22) $(412)

Segment net income

 $390  $610  $144  $288  $33  $34  $1,499 

 

                      

Hemlock

     
                      

and

     
                      

Emerging

     
  

Optical

  

Display

  

Specialty

  

Environmental

  

Life

  

Growth

     
  

Communications

  

Technologies

  

Materials

  

Technologies

  

Sciences

  

Businesses

  

Total

 

Nine months ended September 30, 2022

                            

Segment net sales

 $3,828  $2,523  $1,497  $1,190  $934  $1,200  $11,172 

Depreciation (1)

 $185  $426  $118  $98  $44  $111  $982 

Research, development and engineering expenses (2)

 $173  $92  $163  $74  $28  $121  $651 

Income tax provision (3)

 $(146) $(157) $(70) $(59) $(32) $(19) $(483)

Segment net income

 $531  $598  $262  $223  $122  $35  $1,771 

 

(1)Depreciation expense for Corning’s reportable segments 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 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

  

Nine months ended

 
  

September 30,

  

September 30,

 
  

2023

  

2022

  

2023

  

2022

 

Net sales of reportable segments

 $3,132  $3,259  $9,218  $9,972 

Net sales of Hemlock and Emerging Growth Businesses

  327   407   1,090   1,200 

Impact of constant currency reporting (1)

  (286)  (178)  (714)  (389)

Consolidated net sales

 $3,173  $3,488  $9,594  $10,783 

 

(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 consolidated net income (in millions):

 

  

Three months ended

  

Nine months ended

 
  

September 30,

  

September 30,

 
  

2023

  

2022

  

2023

  

2022

 

Net income of reportable segments

 $517  $543  $1,465  $1,736 

Net (loss) income of Hemlock and Emerging Growth Businesses

  (8)  18   34   35 

Unallocated amounts:

                

Impact of constant currency reporting

  (212)  (136)  (535)  (319)

Gain (loss) on foreign currency hedges related to translated earnings

  20   (68)  128   257 

Translation gain on Japanese yen-denominated debt

  35   84   162   321 

Litigation, regulatory and other legal matters

  (32)  (23)  (44)  (65)

Research, development, and engineering expenses (1)

  (40)  (43)  (127)  (115)

Amortization of intangibles

  (30)  (31)  (92)  (92)

Interest expense, net

  (62)  (59)  (179)  (180)

Income tax benefit

  105   119   234   103 

Severance charges (2)

  (13)  (8)  (86)  (8)

Disposal of assets and other charges and credits (3)

  (59)  (130)  (184)  (209)

Gain on sale of business

           53 

Other corporate items

  (57)  (58)  (155)  (165)

Net income attributable to Corning Incorporated

 $164  $208  $621  $1,352 

 

(1)Amount does not include research, development and engineering expense related to severance charges and disposal of assets and other charges and credits.
(2)For the three and nine months ended September 30, 2023, the amount recorded in cost of sales in the consolidated statements of income was $10 million and $51 million, respectively. For the three and nine months ended September 30, 2022, the amount recorded in cost of sales in the consolidated statements was not material.
(3)For the three and nine months ended September 30, 2023, the amount recorded in cost of sales in the consolidated statements of income was $53 million and $145 million, respectively.  The activity primarily related to asset write-offs during the period.  For the three and nine months ended September 30, 2022, the amount recorded in cost of sales in the consolidated statements of income was $124 million and $192 million, respectively.  The activity primarily related to capacity optimization of an emerging growth business. 

 

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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, 2022 (“2022 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 Incorporated is central to the advancement of the industries we serve and secular trends touching many facets of daily life. It all starts with our focused and cohesive portfolio. We maintain clear leadership in three core technologies and four proprietary manufacturing and engineering platforms. We apply new combinations of our assets and capabilities to solve a broad range of significant challenges and shape new industries in tandem with our customers. By reapplying and repurposing our insights and assets across multiple opportunities and markets, we increase our profitably. Importantly, as we partner closely with our customers to realize their visions and help solve their toughest technology challenges, we unlock new ways to integrate more of our content into their ecosystems. This “More Corning” approach provides a powerful value-creation lever. We’re not just relying on people buying more stuff; we’re driving more Corning content into the products they’re already buying.

 

Our accomplishments over the past several years illustrate the efficacy of our approach. Despite the challenging external environment, we have advanced fiber-to-the-home and data center solutions in Optical Communications, delivered on our gasoline particulate filter content opportunity in Environmental Technologies, introduced Ceramic Shield with Apple in Specialty Materials and ramped our Gen 10.5 plants to extend our leadership in Display Technologies. In addition, we made major progress on our emerging innovations; we gained significant traction in our Automotive Glass Solutions business; and our pharmaceutical packaging portfolio played a central role in combatting the global pandemic. These achievements have helped extend our leadership positions across our markets and pave the way for future growth.

 

At the same time, profitability and cash flow have lagged sales growth. Since 2020, the external environment has been characterized by the impact of the pandemic and its resulting effects including supply chain disruptions, large swings in consumer spending and inflation. Our core priorities throughout this period were protecting our people and delivering for our customers, and as a result, we operated with elevated staffing and higher-than-normal inventory levels during this period leading to reduced productivity. In addition, persistent inflation added to the cost of raw materials we purchased, the cost to produce and ship our products and the inventory we maintained.

 

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In response, we took a series of actions to improve profitability and cash generation throughout 2022 and 2023. These actions included raising prices across our businesses to more appropriately share inflationary costs with our customers; restoring our productivity to pre-pandemic levels without impacting our ability to supply and capture future growth; and normalizing inventory levels. As expected, these actions delivered improved profitability and cash flow as we progressed through 2023.

 

Overall, we will continue to focus on operating each of our businesses well and adjusting to meet the needs of the moment while simultaneously advancing growth initiatives and capabilities that will drive continued success as the global economy stabilizes. Our focused and cohesive portfolio provides strategic resilience that is evident in our results, even in the current environment. We remain confident in our relevance to long-term secular trends and our “More Corning” approach, and we are well positioned to capture durable, profitable growth as the global economy improves.

 

Fourth-Quarter 2023 Corporate Outlook

 

We expect core net sales of approximately $3.25 billion for the fourth quarter of 2023. 

 

 

RESULTS OF OPERATIONS

 

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

 

   

Three months ended

    

%

    

Nine months ended

    

%

  
   

September 30,

    

change

    

September 30,

    

change

  
   

2023

    

2022

    

23 vs. 22

    

2023

    

2022

    

23 vs. 22

  
                                                 

Net sales

   $ 3,173     $ 3,488       (9 %)   $ 9,594     $ 10,783       (11 %)
                                                 

Gross margin

   $ 1,004     $ 1,062       (5 %)   $ 3,020     $ 3,591       (16 %)

(gross margin %)

     32 %     30 %             31 %     33 %        
                                                 

Selling, general and administrative expenses

   $ 468     $ 461       2 %   $ 1,329     $ 1,381       (4 %)

(as a % of net sales)

     15 %     13 %             14 %     13 %        
                                                 

Research, development and engineering expenses

   $ 270     $ 278       (3 %)   $ 787     $ 766       3 %

(as a % of net sales)

     9 %     8 %             8 %     7 %        
                                                 

Translated earnings contract gain (loss), net

   $ 20     $ (68 )     (129 %)   $ 128     $ 257       (50 %)
                                                 

Income before income taxes

   $ 217     $ 260       (17 %)   $ 854     $ 1,793       (52 %)
                                                 

Provision for income taxes

   $ (35 )   $ (34 )     3 %   $ (178 )   $ (380 )     (53 %)

Effective tax rate

     16 %     13 %             21 %     21 %        
                                                 

Net income attributable to Corning Incorporated

   $ 164     $ 208       (21 %)   $ 621     $ 1,352       (54 %)
                                                 

Comprehensive (loss) income attributable to Corning Incorporated

   $ (39 )   $ (489 )     (92 %)   $ 49     $ (264 )     (119 %)

 

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Net Sales 

 

Net sales for the three months ended September 30, 2023 decreased $315 million, or 9%, when compared to the same period in 2022. The decrease was primarily driven by decreased segment sales of $399 million in Optical Communications, $82 million in Life Sciences and $80 million in Hemlock and Emerging Growth Businesses, partially offset by increased segment sales in Display Technologies of $286 million, Specialty Materials of $44 million and Environmental Technologies of $24 million. In addition, movements in foreign exchange rates adversely impacted Corning’s consolidated net sales by $92 million for the three months ended September 30, 2023, when compared to the same period in 2022.

 

Net sales for the nine months ended September 30, 2023 decreased $1,189 million, or 11%, when compared to the same period in 2022. The decrease was primarily driven by decreased segment sales of $719 million in Optical Communications, $217 million in Life Sciences, $110 million in Hemlock and Emerging Businesses and $105 million in Specialty Materials, partially offset by increased segment sales in Environmental Technologies of $147 million and Display Technologies of $140 million. In addition, movements in foreign exchange rates adversely impacted Corning’s consolidated net sales by $287 million for the nine months ended September 30, 2023, when compared to the same period in 2022.

 

Refer to the “Segment Analysis” section of our MD&A below for a discussion of net sales by segment.

 

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 September 30, 2023, gross margin decreased by $58 million, or 5%, and improved as a percentage of sales by 2 percentage points when compared to the same period in 2022. The increase in gross margin as a percentage of sales was primarily driven by the actions taken by management to improve profitability, including raising prices, restoring our productivity levels and normalizing inventory levels. These improvements were partially offset by movements in foreign exchange rates which adversely impacted Corning’s consolidated gross margin by $58 million for the three months ended September 30, 2023 when compared to the same period in 2022.

 

For the nine months ended September 30, 2023, gross margin decreased by $571 million, or 16%, and declined as a percentage of sales by 2 percentage points when compared to the same period in 2022. The decline in gross margin as a percentage of sales was primarily driven by higher inflationary and production costs, partially offset by the benefits from the actions taken by management to improve profitability. In addition, movements in foreign exchange rates adversely impacted Corning’s consolidated gross margin by $175 million for the nine months ended September 30, 2023 when compared to the same period in 2022.

 

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 and nine months ended September 30, 2023, selling, general and administrative expenses increased by $7 million and decreased $52 million, or 2% and 4%, respectively, and were fairly consistent as a percentage of sales when compared to the same periods in 2022.

 

Research, Development and Engineering Expenses

 

For the three and nine months ended September 30, 2023, research, development and engineering expenses decreased by $8 million and increased $21 million, or 3% and 3%, respectively, and were fairly consistent as a percentage of sales when compared to the same periods in 2022.

 

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Translated earnings contract gain (loss), net

 

Included in translated earnings contract gain (loss), 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 British pound and its impact on net income.

 

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

 

   

Three months ended

    

Three months ended

    

Change

  
   

September 30, 2023

    

September 30, 2022

    

2023 vs. 2022

  
   

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)

   $ 73     $ 59     $ 100     $ 76     $ (27 )   $ (17 )

Unrealized loss, net (3)

     (53 )     (43 )     (168 )     (128 )     115       85  

Total translated earnings contract gain (loss), net

   $ 20     $ 16     $ (68 )   $ (52 )   $ 88     $ 68  

 

   

Nine months ended

    

Nine months ended

    

Change

  
   

September 30, 2023

    

September 30, 2022

    

2023 vs. 2022

  
   

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)

   $ 211     $ 168     $ 218     $ 166     $ (7 )   $ 2  

Unrealized (loss) gain, net (4)

     (83 )     (65 )     39       31       (122 )     (96 )

Total translated earnings contract gain, net

   $ 128     $ 103     $ 257     $ 197     $ (129 )   $ (94 )

 

(1)

For the three and nine months ended September 30, 2023, amount includes pre-tax realized losses of $20 million and $48 million, respectively, related to the expiration of option contracts.  For the three and nine months ended September 30, 2022, amount includes pre-tax realized gains of $23 million and $9 million, 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 nine months ended September 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 September 30, 2023 was primarily driven by unrealized losses from our South Korean won and Japanese yen-denominated hedges. The impact to income for the three months ended September 30, 2022 was primarily driven by unrealized losses from our South Korean won-denominated hedges.             
(4) The impact to income for the nine months ended September 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.  The impact to income for the nine months ended September 30, 2022 was primarily driven by unrealized gains from our Japanese yen-denominated hedges partially offset by unrealized losses from our South Korean won-denominated hedges.

 

Income Before Income Taxes

 

The translation impact of fluctuations in foreign currency exchange rates offset by the impact of hedges realized in the current period, adversely impacted Corning’s consolidated income before income taxes by $87 million and $182 million for the three and nine months ended September 30, 2023, respectively, when compared to the same periods in 2022.

 

Provision for Income Taxes

 

For the three months ended September 30, 2023, the effective tax rate differed from the United States (“U.S.”) statutory rate of 21%, primarily due to differences arising from foreign earnings partially offset by changes in estimates based on the final 2022 U.S. Federal Income Tax Return.  For the nine months ended September 30, 2023, the effective tax rate differed from the U.S. statutory rate of 21%, primarily due to differences arising from foreign earnings, changes in estimates based on the final 2022 U.S. Federal Income Tax Return and adjustments related to share-based compensation, partially offset by changes in valuation allowance assessments.

 

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For the three months ended September 30, 2022, the effective tax rate differed from the U.S. statutory rate of 21%, primarily due to the net impact of changes in tax legislation and changes in estimates based on the final 2021 U.S. Federal Income Tax Return, partially offset by changes in tax reserves.  For the nine months ended September 30, 2022, the effective tax rate differed from the U.S. statutory rate of 21%, primarily due to differences arising from foreign earnings and changes in tax reserves, partially offset by the impact of changes in tax legislation, changes in estimates based on the final 2021 U.S. Federal Income Tax Return and adjustments related to share-based compensation.

 

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

    

Nine months ended

  
   

September 30,

    

September 30,

  
   

2023

    

2022

    

2023

    

2022

  

Net income attributable to Corning Incorporated

   $ 164     $ 208     $ 621     $ 1,352  

Basic earnings per common share

   $ 0.19     $ 0.25     $ 0.73     $ 1.60  

Diluted earnings per common share

   $ 0.19     $ 0.24     $ 0.72     $ 1.58  
                                 

Weighted-average common shares outstanding - basic

     850       843       848       843  

Weighted-average common shares outstanding - diluted

     859       855       858       857  

 

Comprehensive (Loss) Income attributable to Corning Incorporated

 

Comprehensive loss attributable to Corning Incorporated for the three months ended September 30, 2023 was $39 million compared to $489 million for the three months ended September 30, 2022. This movement is primarily due to the $44 million decrease in net income attributable to Corning Incorporated and a decrease in net losses on foreign currency translation adjustments of $494 million, primarily driven by the Japanese yen, South Korean won, Chinese yuan and euro.

 

Comprehensive income attributable to Corning Incorporated for the nine months ended September 30, 2023 was $49 million compared to comprehensive loss attributable to Corning Incorporated of $264 million for the nine months ended September 30, 2022. This movement is primarily due to the $731 million decrease in net income attributable to Corning Incorporated and a decrease in net losses on foreign currency translation adjustments of $942 million, primarily driven by the Japanese yen, South Korean won, Chinese yuan and euro.

 

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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 14 (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

    

$

    

%

    

Nine months ended

    

$

    

%

  
   

September 30,

    

change

    

change

    

September 30,

    

change

    

change

  
   

2023

    

2022

    

23 vs. 22

    

23 vs. 22

    

2023

    

2022

    

23 vs. 22

    

23 vs. 22

  

Optical Communications

   $ 918     $ 1,317     $ (399 )     (30 )%   $ 3,109     $ 3,828     $ (719 )     (19 )%

Display Technologies

     972       686       286       42 %     2,663       2,523       140       6 %

Specialty Materials

     563       519       44       8 %     1,392       1,497       (105 )     (7 )%

Environmental Technologies

     449       425       24       6 %     1,337       1,190       147       12 %

Life Sciences

     230       312       (82 )     (26 )%     717       934       (217 )     (23 )%

Net sales of reportable segments

     3,132       3,259       (127 )     (4 )%     9,218       9,972       (754 )     (8 )%

Hemlock and Emerging Growth Businesses

     327       407       (80 )     (20 )%     1,090       1,200       (110 )     (9 )%

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

   $ 3,459     $ 3,666     $ (207 )     (6 )%   $ 10,308     $ 11,172     $ (864 )     (8 )%

 

(1) Refer to Note 14 (Reportable Segments) in the accompanying notes to the consolidated financial statements for the reconciliation to consolidated net sales.

 

Optical Communications

The decrease in segment net sales for both the three and nine month periods was primarily driven by a decline in volume due to lower order rates from carriers as they continue to draw down inventory.

 

Display Technologies 

The increase in segment net sales during the three and nine month periods is due to higher volumes, primarily attributable to the recovery of panel maker utilization to normal ranges.

 

Specialty Materials 

The increase in segment net sales for the three month period was primarily driven by higher volumes due to customer product launches and continued demand for semiconductor materials. The decrease in segment net sales for the nine month period was primarily driven by lower demand in the smartphone, tablet and notebook markets, partially offset by continued demand for semiconductor materials.

 

Environmental Technologies 

The increase in segment net sales for both the three and nine month periods was primarily driven by increased demand of automotive products, including gasoline particulate filter adoption in China, partially offset by softness in heavy-duty markets in North America.

 

Life Sciences

The decrease in segment net sales for both the three and nine month periods was impacted by the lower demand for COVID-related products in China and the impact of customers drawing down inventory.

 

Hemlock and Emerging Growth Businesses

The decrease for both the three and nine month periods was primarily driven by a decrease in our Hemlock business due to declines in solar-grade polysilicon prices and lower sales in our Pharmaceutical Technologies business as the last of the volume commitments for COVID-related products were completed in the second quarter.

 

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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

    

$

    

%

    

Nine months ended

    

$

    

%

  
   

September 30,

    

change

    

change

    

September 30,

    

change

    

change

  
   

2023

    

2022

    

23 vs. 22

    

23 vs. 22

    

2023

    

2022

    

23 vs. 22

    

23 vs. 22

  

Optical Communications

   $ 91     $ 183     $ (92 )     (50 )%   $ 390     $ 531     $ (141 )     (27 )%

Display Technologies

     242       134       108       81 %     610       598       12       2 %

Specialty Materials

     72       96       (24 )     (25 )%     144       262       (118 )     (45 )%

Environmental Technologies

     99       87       12       14 %     288       223       65       29 %

Life Sciences

     13       43       (30 )     (70 )%     33       122       (89 )     (73 )%

Net income of reportable segments

     517       543       (26 )     (5 )%     1,465       1,736       (271 )     (16 )%

Hemlock and Emerging Growth Businesses

     (8 )     18       (26 )     *       34       35       (1 )     (3 )%

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

   $ 509     $ 561     $ (52 )     (9 )%   $ 1,499     $ 1,771     $ (272 )     (15 )%

 

* Not meaningful

 

(1) Refer to Note 14 (Reportable Segments) in the accompanying notes to the consolidated financial statements for the reconciliation to consolidated net income.

 

Optical Communications

The decrease in segment net income for both the three and nine month periods was primarily driven by a decline in sales volume, as outlined above, partially offset by improvements from pricing and productivity actions.

 

Display Technologies

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

 

Specialty Materials

The decrease in segment net income for the three month period was primarily driven by higher production costs, partially offset by the increase in sales volume, as outlined above. The decrease in segment net income for the nine month period was primarily driven by the decline in sales volume, as outlined above, and impacted by continued development costs for new product launches.

 

Environmental Technologies

The increase in segment net income for both the three and nine month periods was primarily driven by the increase in sales, as outlined above, and as a result of productivity-improvement actions.

 

Life Sciences

The decrease in segment net income for both the three and nine month periods was primarily driven by lower sales volume, as outlined above.

 

Hemlock and Emerging Growth Businesses

The decrease for the three month period was primarily driven by our Hemlock business 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 provided by 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. The most significant constant-currency adjustment relates to the Japanese yen exposure within the Display Technologies segment. We establish constant-currency rates based on internally derived management estimates, which are closely aligned with the currencies we have hedged. 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 fluctuation, analyze underlying trends in the businesses and establish operational goals and forecasts. Further, we believe it reflects the underlying economics of the translated earnings contracts used to mitigate the impact of changes in currency exchange rates on our earnings and cash flows.

 

Core performance measures are not prepared in accordance with GAAP, but management believes that reporting core performance measures provides investors with greater transparency to the information used by our management team to make financial and operational decisions.  We believe investors should consider these non-GAAP measures in evaluating results as they are more indicative of our core operating performance and how management evaluates operational results and trends. 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):

 

   

Three months ended

    

%

    

Nine months ended

    

%

  
   

September 30,

    

change

    

September 30,

    

change

  
   

2023

    

2022

    

23 vs. 22

    

2023

    

2022

    

23 vs. 22

  

Core net sales

   $ 3,459     $ 3,666       (6 )%   $ 10,308     $ 11,172       (8 )%

Core net income

   $ 386     $ 438       (12 )%   $ 1,124     $ 1,392       (19 )%

 

Core Net Sales 

 

Core net sales are consistent with net sales by reportable segment and Hemlock and Emerging Growth Businesses. Segment and Hemlock and Emerging Growth Businesses net sales and variances are discussed in detail in the “Segment Analysis” section of our MD&A.

 

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Core Net Income

 

For the three months ended September 30, 2023, we generated core net income of $386 million, or $0.45 per core diluted share, compared to core net income generated for the three months ended September 30, 2022 of $438 million, or $0.51 per core diluted share.  The decrease of $52 million, or $0.06 per core diluted share, was primarily due to lower segment net income for Optical Communications of $92 million, Life Sciences of $30 million and Specialty Materials of $24 million. This was partially offset by higher segment net income for Display Technologies of $108 million. Segment and Hemlock and Emerging Growth Businesses net income and variances are discussed in detail in the “Segment Analysis” section of our MD&A.

 

For the nine months ended September 30, 2023, we generated core net income of $1,124 million, or $1.31 per core diluted share, compared to core net income generated for the nine months ended September 30, 2022 of $1,392 million, or $1.62 per core diluted share.  The decrease of $268 million, or $0.31 per core diluted share, was primarily due to lower segment net income for Optical Communications of $141 million, Specialty Materials of $118 million and Life Sciences of $89 million. This was partially offset by higher segment net income for Environmental Technologies of $65 million. Segment and Hemlock and Emerging Growth Businesses net income and variances are discussed in detail in the “Segment Analysis” section of our MD&A.

 

Core Earnings per Common Share

 

Core earnings per share decreased for the three and nine months ended September 30, 2023 to $0.45 and $1.31 per share, respectively, primarily as a result of the changes in core net income, outlined above.

 

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

 

   

Three months ended

    

Nine months ended

  
   

September 30,

    

September 30,

  
   

2023

    

2022

    

2023

    

2022

  

Core net income

   $ 386     $ 438     $ 1,124     $ 1,392  
                                 

Weighted-average common shares outstanding - basic

     850       843       848       843  

Effect of dilutive securities:

                                

Stock options and other awards

     9       12       10       14  

Weighted-average common shares outstanding - diluted

     859       855       858       857  

Core basic earnings per common share

   $ 0.45     $ 0.52     $ 1.33     $ 1.65  

Core diluted earnings per common share

   $ 0.45     $ 0.51     $ 1.31     $ 1.62  

 

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Table of Contents

 

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 and core net income and the related per share numbers are non-GAAP financial measures utilized by 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.

 

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

 

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 September 30, 2023

  
                   

Net income

                  
                   

attributable

                  
   

Net

    

Income before

    

to Corning

    

Effective tax

    

Per

  
   

sales

    

income taxes

    

Incorporated

    

rate (a)(b)

    

share

  

As reported – GAAP

   $ 3,173     $ 217     $ 164       16.1 %   $ 0.19  

Constant-currency adjustment (1)

     286       212       164               0.19  

Translation gain on Japanese yen-denominated debt (2)

             (35 )     (29 )             (0.03 )

Translated earnings contract gain (3)

             (20 )     (16 )             (0.02 )

Acquisition-related costs (4)

             33       25               0.03  

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

                     (3 )             (0.00 )

Restructuring, impairment and other charges and credits (6)

             72       58               0.07  

Litigation, regulatory and other legal matters (7)

             32       25               0.03  

Pension mark-to-market adjustment (8)

             7       6               0.01  

Gain on investments (9)

             (8 )     (8 )             (0.01 )

Core performance measures

   $ 3,459     $ 510     $ 386       20.5 %   $ 0.45  

 

(a)  

Based upon statutory tax rates in the specific jurisdiction for each event.
(b) The calculation of the effective tax rate (“ETR”) excludes net income attributable to non-controlling interests (“NCI”).

 

   

Three months ended September 30, 2022

  
                   

Net income

                  
                   

attributable

                  
   

Net

    

Income before

    

to Corning

    

Effective tax

    

Per

  
   

sales

    

income taxes

    

Incorporated

    

rate (a)(b)

    

share

  

As reported - GAAP

   $ 3,488     $ 260     $ 208       13.1 %   $ 0.24  

Constant-currency adjustment (1)

     178       136       79               0.09  

Translation gain on Japanese yen-denominated debt (2)

             (84 )     (64 )             (0.07 )

Translated earnings contract loss (3)

             68       52               0.06  

Acquisition-related costs (4)

             33       25               0.03  

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

                     22               0.03  

Restructuring, impairment and other charges and credits (6)

             138       106               0.12  

Litigation, regulatory and other legal matters (7)

             23       17               0.02  

Pension mark-to-market adjustment (8)

             (9 )     (7 )             (0.01 )

Core performance measures

   $ 3,666     $ 565     $ 438       19.3 %   $ 0.51  

 

(a)

Based upon statutory tax rates in the specific jurisdiction for each event.
(b) The calculation of the ETR excludes net income attributable to NCI.

 

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

 

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Table of Contents

 

   

Nine months ended September 30, 2023

  
                   

Net income

                  
                   

attributable

                  
   

Net

    

Income before

    

to Corning

    

Effective tax

    

Per

  
   

sales

    

income taxes

    

Incorporated

    

rate (a)(b)

    

share

  

As reported – GAAP

   $ 9,594     $ 854     $ 621       20.8 %   $ 0.72  

Constant-currency adjustment (1)

     714       535       403               0.47  

Translation gain on Japanese yen-denominated debt (2)

             (162 )     (131 )             (0.15 )

Translated earnings contract gain (3)

             (128 )     (103 )             (0.12 )

Acquisition-related costs (4)

             99       70               0.08  

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

                     26               0.03  

Restructuring, impairment and other charges and credits (6)

             270       216               0.25  

Litigation, regulatory and other legal matters (7)

             44       35               0.04  

Pension mark-to-market adjustment (8)

             1       1               0.00  

Loss on investments (9)

             1       1               0.00  

Gain on sale of assets (10)

             (20 )     (15 )             (0.02 )

Core performance measures

   $ 10,308     $ 1,494     $ 1,124       20.5 %   $ 1.31  

 

(a)  

Based upon statutory tax rates in the specific jurisdiction for each event.
(b) The calculation of the ETR excludes net income attributable to NCI.

 

   

Nine months ended September 30, 2022

  
                   

Net income

                  
                   

attributable

                  
   

Net

    

Income before

    

to Corning

    

Effective tax

    

Per

  
   

sales

    

income taxes

    

Incorporated

    

rate (a)(b)

    

share

  

As reported - GAAP

   $ 10,783     $ 1,793     $ 1,352       21.2 %   $ 1.58  

Constant-currency adjustment (1)

     389       319       221               0.26  

Translation gain on Japanese yen-denominated debt (2)

             (321 )     (246 )             (0.29 )

Translated earnings contract gain (3)

             (257 )     (197 )             (0.23 )

Acquisition-related costs (4)

             107       84               0.10  

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

                     38               0.04  

Restructuring, impairment and other charges and credits (6)

             217       166               0.19  

Litigation, regulatory and other legal matters (7)

             65       49               0.06  

Pension mark-to-market adjustment (8)

             (19 )     (15 )             (0.02 )

Loss on investments (9)

             8       6               0.01  

Contingent consideration (11)

             (32 )     (25 )             (0.03 )

Gain on sale of business (12)

             (53 )     (41 )             (0.05 )

Core performance measures

   $ 11,172     $ 1,827     $ 1,392       20.5 %   $ 1.62  

 

(a)

Based upon statutory tax rates in the specific jurisdiction for each event.
(b) The calculation of the ETR excludes net income attributable to NCI.

 

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

 

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Items Excluded from GAAP Measures

 

Items which we exclude from GAAP measures to arrive at core performance measures were 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 the Display Technologies, Specialty Materials, Environmental Technologies and Life Sciences segments for the Japanese yen, South Korean won, Chinese yuan, New Taiwan dollar and euro, as applicable to the segment. We establish constant-currency rates based on internally derived management estimates, which are closely aligned with the currencies we have hedged.   

 

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. Further, we believe it reflects the underlying economics of the translated earnings contracts used to mitigate the impact of changes in currency exchange rates on our earnings and cash flows.

 

Constant currency rates used are as follows:
 

Currency

  

Japanese yen

  

Korean won

  

Chinese yuan

  

New Taiwan dollar

  

Euro
 

Rate

  

¥107

  

₩1,175

  

¥6.7

  

NT$31

  

€.81
   

(2)

Translation of Japanese yen-denominated debt: Amount reflects the gain or loss on the translation of our yen-denominated debt to U.S. dollars.

(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-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 accelerated depreciation, asset write-offs and facility repairs resulting from power outages, which are not related to ongoing operations. The activity during 2023 primarily relates to severance charges and asset write-offs. The activity during the third quarter of 2022 primarily relates to capacity optimization of an emerging growth business. 
(7) 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.
(8) 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.
(9) (Gain) loss on investments: Amount primarily reflects the gain or loss recognized on investment due to mark-to-mark adjustments for the change in fair value or the disposition of the investment.  
(10) Gain on sale of assets: Amount represents the gain recognized for the sale assets.  
(11) Contingent consideration:  Amount reflects the fair value mark-to-market cost adjustment of contingent consideration resulting from the Hemlock Semiconductor Group transaction on September 9, 2020.
(12) Gain on sale of business:  Amount represents the gain recognized for the sale of a business.

 

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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 source of funding for 2023 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 include requirements for acquisitions, capital expenditures, debt repayments, dividend payments and share repurchase programs. 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 short-term borrowings, including commercial paper, when necessary. In addition, 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):

 

   

September 30,

    

December 31,

  
   

2023

    

2022

  

Working capital

   $ 3,013     $ 2,278  

Current ratio

  

1.7:1

    

1.4:1

  

Trade accounts receivable, net of doubtful accounts

   $ 1,725     $ 1,721  

Days sales outstanding

     49       45  

Inventories

   $ 2,655     $ 2,904  

Inventory turns

     3.2       3.4  

Days payable outstanding (1)

     48       52  

Long-term debt

   $ 7,210     $ 6,687  

Total debt

   $ 7,507     $ 6,911  

Total debt to total capital

     39 %     36 %

 

(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 $435 million, $423 million, and $350 million of accounts receivable during the three months ended March 31, 2023, June 30, 2023 and September 30, 2023, 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):

 

   

Nine months ended

  
   

September 30,

  
   

2023

    

2022

  

Net cash provided by operating activities

   $ 1,292     $ 1,998  

Net cash used in investing activities

   $ (770 )   $ (969 )

Net cash used in financing activities

   $ (520 )   $ (1,430 )

 

Net cash provided by operating activities decreased by $706 million in the nine months ended September 30, 2023, when compared to the same period in the prior year primarily driven by a decrease in net income of $737 million.

 

Net cash used in investing activities for the nine months ended September 30, 2023 improved by $199 million when compared to the same period last year, primarily driven by lower capital expenditures of $90 million and higher realized gains on translated earnings contracts of $61 million.

 

Net cash used in financing activities for the nine months ended September 30, 2023 improved by $910 million when compared to the same period last year, primarily driven by the $918 million proceeds received from the issuance of euro-denominated notes in May 2023.

 

Sources of Liquidity

 

As of September 30, 2023, our cash and cash equivalents and available credit capacity included (in millions):

 

   

September 30,

  
   

2023

  

Cash and cash equivalents

   $ 1,639  
         

Available credit capacity:

        

U.S. dollar revolving credit facility

   $ 1,500  

Japanese yen liquidity facility

   $ 167  

Chinese yuan facilities

   $ 404  

 

Cash and Cash Equivalents

 

As of September 30, 2023, we had $1.6 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 September 30, 2023, approximately 54% of the consolidated cash and cash equivalents were held outside the U.S. 

 

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.

 

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 paper from time to time and will use the proceeds for general corporate purposes. As of September 30, 2023, 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. In addition, we have a 25 billion Japanese yen liquidity facility, equivalent to approximately $167 million. As of September 30, 2023, there were no amounts outstanding under these facilities.

 

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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 September 30, 2023, our leverage using this measure was approximately 39%. As of September 30, 2023, 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 September 30, 2023, we were in compliance with all such provisions.

 

We have access to certain unsecured variable rate loan facilities, with an aggregate capacity of 5,045 million Chinese yuan, equivalent to approximately $691 million, whose proceeds are used for capital investment and general corporate purposes.  As of September 30, 2023, borrowings totaled $287 million.

 

As a well-known seasoned issuer, we filed an automatic shelf registration for an undetermined amount of debt and equity securities with the SEC on December 4, 2020. Under this shelf registration we may offer, from time to time, debt securities, common stock, preferred stock, depositary shares and warrants. We plan to file a new shelf registration statement in the fourth quarter of 2023, prior to the expiration of the shelf registration statement currently in effect.

 

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 September 30, 2023, the U.S. dollar equivalent carrying value of the euro-denominated long-term debt was $892 million.

 

Uses of Cash

 

Fixed Rate Cumulative Convertible Preferred Stock, Series A

 

We 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, we executed a 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 2022 and 2021. The remaining payment of approximately $507 million was made in April 2023.

 

Stock Repurchases

 

In 2019, the Board authorized the repurchase of up to $5.0 billion of common stock (“2019 Authorization”). As of September 30, 2023, approximately $3.3 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.

 

Common Stock Dividends

 

On October 4, 2023, Corning’s Board of Directors declared a dividend of $0.28 per share of common stock.  The dividend will be payable on December 15, 2023.

 

Capital Expenditures

 

Capital expenditures were $1.1 billion for the nine months ended September 30, 2023.  We expect our 2023 full year capital expenditures to be slightly lower than 2022.

 

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Defined Benefit Pension Plans

 

Our global pension plans, including our unfunded and non-qualified plans, were 82% funded as of December 31, 2022. 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 93% funded as of December 31, 2022.

 

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 2023, the Company made cash contributions of $25 million to its international pension plans.  The Company does not expect to make additional contributions in the fourth quarter of 2023.

 

Commitments, Contingencies and Guarantees

 

There were no material changes outside the ordinary course of business in the obligations disclosed in the 2022 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 2022 Form 10-K under the caption “Off Balance Sheet Arrangements.”

 

ENVIRONMENT 

 

Refer to Item 1. Legal Proceedings or Note 9 (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, 2022. 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 the COVID-19 pandemic, inflation, interest rates, the value of securities and other financial assets, precious metals, oil, natural gas 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 the COVID-19 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;

-

unanticipated 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 2022 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 2022 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 September 30, 2023, 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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Table of Contents

 

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 9 (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 2022 Form 10-K, which could materially impact the Company’s business, financial condition or future results. Risks disclosed in the 2022 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 third quarter of 2023:

 

Issuer Purchases of Equity Securities

 

                           

Approximate

  
                   

Number of

    

dollar value of

  
                   

shares purchased

    

shares that may

  
   

Total number

    

Average

    

as part of publicly

    

yet be purchased

  
   

of shares

    

price paid

    

announced

    

under the

  

Period

  

purchased (1)

    

per share (2)

    

programs

    

programs

  

July 1 - 31, 2023

     90,395     $ 33.99                  

August 1 - 31, 2023

     6,308       32.81                  

September 1 - 30, 2023

     3,590       30.78                  

Total

     100,293     $ 33.80       —     $ 3,301,085,426  

 

(1)

 This column reflects: (i) 73,832 shares of common stock related to the vesting of employee restricted stock; (ii) 25,693 shares of common stock related to the vesting of employee restricted stock units; (iii) 747 shares of common stock related to the vesting of employee performance stock units; and (iv) 21 shares of common stock related to the exercise of employee stock options and payment of the exercise price.
(2) Represents the stock price at the time of surrender.

 

 

Item 5. Other Information

 

During the three months ended September 30, 2023, none of our officers or directors 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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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)

  
         
         
         
 

October 30, 2023

  

/s/ Stefan Becker

  
 

Date

  

Stefan Becker

  
     

Senior Vice President, Finance & Corporate Controller

  

 

43

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.

 

October 30, 2023

 

 

 

/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.

 

October 30, 2023

 

 

 

/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 September 30, 2023, 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:  October 30, 2023

 

 

 

 

/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

  

 

 

 

 

 
v3.23.3
Document And Entity Information - shares
 9 Months Ended
Sep. 30, 2023
Oct. 26, 2023
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 Q3  
Document Fiscal Year Focus 2023  
Document Type 10-Q  
Document Quarterly Report true  
Document Period End Date Sep. 30, 2023  
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   853,174,879
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, $0.50 par value per share  
Trading Symbol GLW  
Security Exchange Name NYSE  
v3.23.3
Consolidated Statements of Income (Unaudited) - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Net sales $ 3,173 $ 3,488 $ 9,594 $ 10,783
Cost of sales 2,169 2,426 6,574 7,192
Gross margin 1,004 1,062 3,020 3,591
Operating expenses:        
Selling, general and administrative expenses 468 461 1,329 1,381
Research, development and engineering expenses 270 278 787 766
Amortization of purchased intangibles 30 31 92 92
Operating income 236 292 812 1,352
Interest income 10 3 25 9
Interest expense (82) (73) (239) (216)
Translated earnings contract gain (loss), net (Note 10) 20 (68) 128 257
Other income, net 33 106 128 391
Income before income taxes 217 260 854 1,793
Provision for income taxes (Note 3) (35) (34) (178) (380)
Net income 182 226 676 1,413
Net income attributable to non-controlling interest (18) (18) (55) (61)
Net income attributable to Corning Incorporated $ 164 $ 208 $ 621 $ 1,352
Earnings per common share available to common shareholders:        
Basic (Note 4) (in dollars per share) $ 0.19 $ 0.25 $ 0.73 $ 1.60
Diluted (Note 4) (in dollars per share) $ 0.19 $ 0.24 $ 0.72 $ 1.58
v3.23.3
Consolidated Statements of Comprehensive (Loss) Income (Unaudited) - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Net income $ 182 $ 226 $ 676 $ 1,413
Foreign currency translation adjustments and other (191) (685) (593) (1,535)
Unamortized (losses) gains and prior service costs for postretirement benefit plans (1) 3 (9) (49)
Realized and unrealized (losses) gains on derivatives (11) (15) 30 (32)
Other comprehensive loss, net of tax (203) (697) (572) (1,616)
Comprehensive (loss) income (21) (471) 104 (203)
Comprehensive income attributable to non-controlling interest (18) (18) (55) (61)
Comprehensive (loss) income attributable to Corning Incorporated $ (39) $ (489) $ 49 $ (264)
v3.23.3
Consolidated Balance Sheets (Current Period Unaudited) - USD ($)
$ in Millions
Sep. 30, 2023
Dec. 31, 2022
Current assets:    
Cash and cash equivalents $ 1,639 $ 1,671
Trade accounts receivable, net of doubtful accounts - $30 and $40 1,725 1,721
Inventories (Note 5) 2,655 2,904
Other current assets 1,279 1,157
Total current assets 7,298 7,453
Property, plant and equipment, net of accumulated depreciation - $14,257 and $14,147 14,407 15,371
Goodwill, net 2,372 2,394
Other intangible assets, net 938 1,029
Deferred income taxes (Note 3) 1,037 1,073
Other assets 2,226 2,179
Total Assets 28,278 29,499
Current liabilities:    
Current portion of long-term debt and short-term borrowings 297 224
Accounts payable 1,459 1,804
Other accrued liabilities (Notes 6 and 9) 2,529 3,147
Total current liabilities 4,285 5,175
Long-term debt (Note 7) 7,210 6,687
Postretirement benefits other than pensions (Note 8) 406 407
Other liabilities (Notes 6 and 9) 4,633 4,955
Total liabilities 16,534 17,224
Commitments and contingencies (Note 9)
Shareholders’ equity (Note 12):    
Common stock – Par value $0.50 per share; Shares authorized 3.8 billion; Shares issued: 1.8 billion and 1.8 billion 915 910
Additional paid-in capital – common stock 16,877 16,682
Retained earnings 16,673 16,778
Treasury stock, at cost; Shares held: 980 million and 977 million (20,633) (20,532)
Accumulated other comprehensive loss (2,402) (1,830)
Total Corning Incorporated shareholders’ equity 11,430 12,008
Non-controlling interest 314 267
Total equity 11,744 12,275
Total Liabilities and Equity $ 28,278 $ 29,499
v3.23.3
Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($)
shares in Millions, $ in Millions
Sep. 30, 2023
Dec. 31, 2022
Doubtful accounts and allowances $ 30 $ 40
Accumulated depreciation $ 14,257 $ 14,147
Common stock, par value (in dollars per share) $ 0.50 $ 0.50
Common stock, shares authorized (in shares) 3,800 3,800
Common stock, shares issued (in shares) 1,800 1,800
Treasury shares (in shares) 980 977
v3.23.3
Consolidated Statements of Cash Flows (Unaudited) - USD ($)
$ in Millions
 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Cash Flows from Operating Activities:    
Net income $ 676 $ 1,413
Adjustments to reconcile net income to net cash provided by operating activities:    
Depreciation 932 1,014
Amortization of purchased intangibles 92 92
Loss on disposal of assets, net 72 110
Severance charges 86 8
Severance payments (82) (5)
Gain on sale of business (53)
Share-based compensation expense 168 145
Translation gain on Japanese yen-denominated debt (162) (321)
Deferred tax provision 37 58
Translated earnings contract gain, net (128) (257)
Unrealized translation loss on transactions 58 140
Tax deposit refund 99
Changes in assets and liabilities:    
Trade accounts receivable (137) 161
Inventories 131 (637)
Other current assets (58) (5)
Accounts payable and other current liabilities (263) 25
Customer deposits and government incentives (17) 144
Deferred income (11) (15)
Other, net (201) (19)
Net cash provided by operating activities 1,292 1,998
Cash Flows from Investing Activities:    
Capital expenditures (1,111) (1,201)
Proceeds from sale of business 77
Realized gains on translated earnings contracts and other 270 209
Other, net 4 (54)
Net cash used in investing activities (770) (969)
Cash Flows from Financing Activities:    
Repayments of short-term borrowings and other long-term debt (180) (87)
Proceeds from issuance of short-term borrowings 30 70
Proceeds from issuance of euro bonds and other long-term debt 968 37
Proceeds from other financing arrangements 54
Repayment of other financing arrangements (54)
Payment for redemption of preferred stock (507) (507)
Payments of employee withholding tax on stock awards (103) (44)
Proceeds from exercise of stock options 39 35
Purchases of common stock for treasury (221)
Dividends paid (741) (696)
Other, net (26) (17)
Net cash used in financing activities (520) (1,430)
Effect of exchange rates on cash (34) (117)
Net decrease in cash and cash equivalents (32) (518)
Cash and cash equivalents at beginning of period 1,671 2,148
Cash and cash equivalents at end of period 1,639 1,630
Related Party [Member]    
Cash Flows from Investing Activities:    
Proceeds from sale of equipment to related party $ 67
v3.23.3
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, 2021 $ 907 $ 16,475 $ 16,389 $ (20,263) $ (1,175) $ 12,333 $ 212 $ 12,545
Net income (loss)     581     581 22 603
Other comprehensive income (loss)         (187) (187)   (187)
Shares issued to benefit plans and for option exercises 1 56       57   57
Common dividends     (233)     (233)   (233)
Other, net [1]       (5)   (5)   (5)
Purchase of common stock for treasury       (151)   (151)   (151)
Balance at Mar. 31, 2022 908 16,531 16,737 (20,419) (1,362) 12,395 234 12,629
Balance at Dec. 31, 2021 907 16,475 16,389 (20,263) (1,175) 12,333 212 12,545
Net income (loss)               1,413
Balance at Sep. 30, 2022 910 16,649 17,044 (20,528) (2,791) 11,284 264 11,548
Balance at Mar. 31, 2022 908 16,531 16,737 (20,419) (1,362) 12,395 234 12,629
Net income (loss) 563 563 21 584
Other comprehensive income (loss) (732) (732) (2) (734)
Shares issued to benefit plans and for option exercises 2 59 61 61
Common dividends (463) (463) (463)
Other, net [1] (37) (37) (5) (42)
Purchase of common stock for treasury (53) (53) (53)
Balance at Jun. 30, 2022 910 16,590 16,837 (20,509) (2,094) 11,734 248 11,982
Net income (loss) 208 208 18 226
Other comprehensive income (loss) (697) (697) (2) (699)
Shares issued to benefit plans and for option exercises 59 59 59
Other, net [1] (1) (2) (3) (3)
Purchase of common stock for treasury (17) (17) (17)
Balance at Sep. 30, 2022 910 16,649 17,044 (20,528) (2,791) 11,284 264 11,548
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 income (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]       (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)               676
Balance at Sep. 30, 2023 915 16,877 16,673 (20,633) (2,402) 11,430 314 11,744
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 income (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] (82) (82) (5) (87)
Balance at Jun. 30, 2023 915 16,817 16,509 (20,630) (2,199) 11,412 298 11,710
Net income (loss) 164 164 18 182
Other comprehensive income (loss) (203) (203) (1) (204)
Shares issued to benefit plans and for option exercises 60 60 60
Other, net [1] (3) (3) (1) (4)
Balance at Sep. 30, 2023 $ 915 $ 16,877 $ 16,673 $ (20,633) $ (2,402) $ 11,430 $ 314 $ 11,744
[1] Treasury stock includes the deemed surrender to the Company of common stock to satisfy employee tax withholding obligations.
v3.23.3
Consolidated Statements of Changes In Shareholders' Equity (Unaudited) (Parentheticals) - $ / shares
 3 Months Ended
Jun. 30, 2023
Mar. 31, 2023
Jun. 30, 2022
Mar. 31, 2022
Common Dividends (in dollars per share) $ 0.56 $ 0.28 $ 0.54 $ 0.27
v3.23.3
Note 1 - Summary of Significant Accounting Policies
 9 Months Ended
Sep. 30, 2023
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, 2022 (“2022 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 (“Hemlock”) 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.

 
v3.23.3
Note 2 - Revenue
 9 Months Ended
Sep. 30, 2023
Notes to Financial Statements  
Revenue from Contract with Customer [Text Block]

2. Revenue

 

Disaggregated Revenue

 

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

 

   

Three months ended

    

Nine months ended

  
   

September 30,

    

September 30,

  
   

2023

    

2022

    

2023

    

2022

  

Telecommunication products

   $ 918     $ 1,317     $ 3,109     $ 3,828  

Display products

     727       558       2,061       2,223  

Specialty glass products

     560       516       1,384       1,494  

Environmental substrate and filter products

     420       393       1,260       1,130  

Life science products

     221       297       690       908  

Polycrystalline silicon products

     230       288       765       877  

All other products

     97       119       325       323  

Total revenue

   $ 3,173     $ 3,488     $ 9,594     $ 10,783  

 

Customer Deposits

 

As of September 30, 2023 and December 31, 2022, Corning had customer deposits of approximately $1.2 billion and $1.3 billion, respectively.  Most of these customer deposits were non-refundable and allowed customers to secure rights to products produced by Corning under long-term supply agreements.  The duration of these long-term supply agreements ranges up to 10 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  September 30, 2023 and 2022, customer deposits recognized were $6 million and $24 million, respectively.  For the nine months ended September 30, 2023 and 2022, customer deposits recognized were $88 million and $155 million, respectively.

 

Refer to Note 6 (Other Liabilities) for additional information. 

 

Deferred Revenue

 

As of September 30, 2023 and December 31, 2022, Corning had deferred revenue of approximately $854 million and $869 million, respectively.  Deferred revenue was primarily related to the performance obligations of non-refundable consideration previously received by Hemlock 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 nine months ended  September 30, 2023 and 2022, the amount of deferred revenue recognized in the consolidated statements of income was not material.

 

Refer to Note 6 (Other Liabilities) for additional information.  

  
v3.23.3
Note 3 - Income Taxes
 9 Months Ended
Sep. 30, 2023
Notes to Financial Statements  
Income Tax Disclosure [Text Block]

3. Income Taxes

 

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

 

   

Three months ended

    

Nine months ended

  
   

September 30,

    

September 30,

  
   

2023

    

2022

    

2023

    

2022

  

Provision for income taxes

   $ (35 )   $ (34 )   $ (178 )   $ (380 )

Effective tax rate

     16.1 %     13.1 %     20.8 %     21.2 %

 

For the three months ended  September 30, 2023, the effective tax rate differed from the United States (“U.S.”) statutory rate of 21%, primarily due to differences arising from foreign earnings partially offset by changes in estimates based on the final 2022 U.S. Federal Income Tax Return.  For the nine months ended September 30, 2023, the effective tax rate differed from the U.S. statutory rate of 21%, primarily due to differences arising from foreign earnings, changes in estimates based on the final 2022 U.S. Federal Income Tax Return and adjustments related to share-based compensation, partially offset by changes in valuation allowance assessments.

 

For the three months ended September 30, 2022, the effective tax rate differed from the U.S. statutory rate of 21%, primarily due to the net impact of changes in tax legislation and changes in estimates based on the final 2021 U.S. Federal Income Tax Return, partially offset by changes in tax reserves.  For the nine months ended September 30, 2022, the effective tax rate differed from the U.S. statutory rate of 21%, primarily due to differences arising from foreign earnings and changes in tax reserves, partially offset by the net impact of changes in tax legislation, changes in estimates based on the final 2021 U.S. Federal Income Tax Return and adjustments related to share-based compensation.

 

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 $255 million and $349 million as of September 30, 2023 and December 31, 2022, 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.

 
v3.23.3
Note 4 - Earnings per Common Share
 9 Months Ended
Sep. 30, 2023
Notes to Financial Statements  
Earnings Per Share [Text Block]

4. 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

  

Nine months ended

 
  

September 30,

  

September 30,

 
  

2023

  

2022

  

2023

  

2022

 

Net income attributable to Corning Incorporated

 $164  $208  $621  $1,352 
                 

Weighted-average common shares outstanding – basic

  850   843   848   843 

Effect of dilutive securities:

                

Stock options and other awards

  9   12   10   14 

Weighted-average common shares outstanding – diluted

  859   855   858   857 

Basic earnings per common share

 $0.19  $0.25  $0.73  $1.60 

Diluted earnings per common share

 $0.19  $0.24  $0.72  $1.58 
                 

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

                

Stock options and other awards

  3   3   3   2 

 
v3.23.3
Note 5 - Inventories
 9 Months Ended
Sep. 30, 2023
Notes to Financial Statements  
Inventory Disclosure [Text Block]

5. Inventories

 

Inventories consisted of the following (in millions):

 

   

September 30,

    

December 31,

  
   

2023

    

2022

  

Finished goods

   $ 1,226     $ 1,315  

Work in process

     513       571  

Raw materials and accessories

     479       537  

Supplies and packing materials

     437       481  

Inventories

   $ 2,655     $ 2,904  

 
v3.23.3
Note 6 - Other Liabilities
 9 Months Ended
Sep. 30, 2023
Notes to Financial Statements  
Other Liabilities Disclosure [Text Block]

6. Other Liabilities

 

Other liabilities consisted of the following (in millions):

 

   

September 30,

    

December 31,

  
   

2023

    

2022

  

Current liabilities:

                

Wages and employee benefits

   $ 505     $ 727  

Income taxes

     125       127  

Derivative instruments (Note 10)

     150       174  

Deferred revenue (Note 2)

     185       144  

Customer deposits (Note 2)

     162       132  

Share repurchase liability (Note 12)

           506  

Short-term operating leases

     108       111  

Other current liabilities

     1,294       1,226  

Other accrued liabilities

   $ 2,529     $ 3,147  
                 

Non-current liabilities:

                

Defined benefit pension plan liabilities

   $ 685     $ 668  

Derivative instruments (Note 10)

     65       17  

Deferred revenue (Note 2)

     669       725  

Customer deposits (Note 2)

     1,044       1,137  

Deferred tax liabilities

     201       243  

Long-term operating leases

     842       795  

Other non-current liabilities

     1,127       1,370  

Other liabilities

   $ 4,633     $ 4,955  

 
v3.23.3
Note 7 - Debt
 9 Months Ended
Sep. 30, 2023
Notes to Financial Statements  
Debt Disclosure [Text Block]

7. 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 $6.1 billion as of  September 30, 2023 and December 31, 2022, respectively, compared to the carrying value of $7.2 billion and $6.7 billion as of  September 30, 2023 and December 31, 2022, 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.

 

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 September 30, 2023, the U.S. dollar equivalent carrying value of the euro-denominated long-term debt was $892 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 10 (Hedging Activities) for additional information.

 

Corning had no outstanding commercial paper as of September 30, 2023 or December 31, 2022.

 
v3.23.3
Note 8 - Employee Retirement Plans
 9 Months Ended
Sep. 30, 2023
Notes to Financial Statements  
Retirement Benefits [Text Block]

8. Employee Retirement Plans

 

Corning has defined benefit pension plans covering certain domestic and international employees. The Company may contribute, as necessary, an amount exceeding the minimum requirements to achieve the Company’s long-term funding targets. During 2023, the Company made cash contributions of $25 million to its international pension plans.  The Company does not expect to make additional contributions in the fourth quarter of 2023.

 

The following table presents the components of net periodic 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

    

Nine months ended

    

Three months ended

    

Nine months ended

  
   

September 30,

    

September 30,

    

September 30,

    

September 30,

  
   

2023

    

2022

    

2023

    

2022

    

2023

    

2022

    

2023

    

2022

  

Service cost

   $ 25     $ 32     $ 75     $ 96     $ 1     $ 3     $ 4     $ 7  

Interest cost

     45       28       133       82       6       3       17       11  

Expected return on plan assets

     (46 )     (55 )     (138 )     (164 )                        

Amortization of actuarial net gain

                             (6 )           (17 )      

Amortization of prior service cost (credit)

     2       1       5       4       (2 )     (2 )     (4 )     (4 )

Recognition of actuarial loss (gain)

     12             (16 )     22             (2 )           (3 )

Special termination benefit charge

                 5                                

Total pension and postretirement benefit expense (income)

   $ 38     $ 6     $ 64     $ 40     $ (1 )   $ 2     $ —     $ 11  

 
v3.23.3
Note 9 - Commitments and Contingencies
 9 Months Ended
Sep. 30, 2023
Notes to Financial Statements  
Commitments and Contingencies Disclosure [Text Block]

9. 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. Corning does not believe that its indemnity obligation will be material.

 

Dow Corning Environmental Claims

 

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.  In the event Dow is liable for these claims, Corning may be required to indemnify Dow for up to 50% of that liability, subject to certain conditions and limits.  As of September 30, 2023, 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  September 30, 2023 and December 31, 2022, Corning had accrued approximately $90 million and $109 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.

 
v3.23.3
Note 10 - Hedging Activities
 9 Months Ended
Sep. 30, 2023
Notes to Financial Statements  
Derivative Instruments and Hedging Activities Disclosure [Text Block]

10. Hedging Activities

 

Designated Hedges

 

Corning uses over-the-counter (“OTC”) foreign exchange forward contracts designated as cash flow hedges to reduce the risk that movements in exchange rates will adversely affect the net cash flows resulting from the sale of products to customers and purchases from suppliers. The total notional amounts for foreign currency cash flow hedges are $301 million and $419 million as of  September 30, 2023 and December 31, 2022, respectively, with maturities through 2024. Corning defers gains and losses related to cash flow hedges into accumulated other comprehensive loss on the consolidated balance sheets until the hedged item impacts earnings. As of  September 30, 2023, the amount expected to be reclassified into earnings within the next 12 months is a pre-tax gain of $43 million.

 

Corning has entered into leases of precious metals, with maturities through 2025. To offset the risk of changes in the fair value of the Company’s separate accounting pool of leased precious metals due to adverse changes in the respective market prices, Corning designated the bifurcated embedded derivatives included in these leases as fair value hedges. The gain or loss on the derivatives, as well as the offsetting loss or gain on the hedged item attributable to the hedged risk, are recognized in current earnings. The amounts representing the time value component of the derivatives are excluded from the assessment of effectiveness and amortized in earnings. The impact of the excluded component on Corning’s other comprehensive loss and earnings is not material. 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 $89 million and $278 million, respectively, as of  September 30, 2023 and December 31, 2022. The carrying amount of the leased precious metals pool includes cumulative fair value losses of $261 million and $95 million as of  September 30, 2023 and December 31, 2022, respectively. These losses are offset by changes in the fair value of the derivatives.

 

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. Changes in the value of these hedging instruments due to foreign currency gains or losses are deferred in other comprehensive loss on the consolidated statements of comprehensive (loss) income, within the foreign currency translation adjustments and other line, and will remain in accumulated other comprehensive loss until the hedged investment is sold or substantially liquidated. We evaluate the effectiveness of the net investment hedges each quarter using the critical terms match method.  As of  September 30, 2023, the net investment hedges are deemed to be effective.  During the three and nine months ended September 30, 2023, foreign currency gains of $29 million and $36 million, respectively, associated with these net investment hedges were recognized in other comprehensive loss.

 

Refer to Note 7 (Debt) for additional information.

 

Undesignated Hedges

 

Corning uses OTC foreign exchange forward and option contracts to offset economic currency risks. These contracts are not designated as hedging instruments for accounting purposes. The undesignated hedges limit exposure to foreign currency fluctuations related to certain subsidiaries’ monetary assets, monetary liabilities and net earnings in foreign currencies.

 

A significant portion of the Company’s non-U.S. revenue and expenses are denominated in Japanese yen, South Korean won, new Taiwan dollar, Chinese yuan and euro. When this revenue and expenses are translated to U.S. dollars, the Company is exposed to foreign exchange rate movements. To protect translated earnings against movements in these currencies, the Company has entered into a series of average rate forwards and option contracts. Most of these contracts hedge a significant portion of the Company’s exposure to the Japanese yen and South Korean won. The Company has contracts through 2024 for the Japanese yen and 2026 for the South Korean won.

 

The fair values of these derivative contracts are recorded as either assets (gain position) or liabilities (loss position) on the consolidated balance sheets. Changes in the fair value of the derivative contracts are recorded in earnings within translated earnings contract gain (loss), net in the consolidated statements of income.

 

The following table summarizes the notional amounts and respective fair values of Corning’s derivative financial instruments on a gross basis as of  September 30, 2023 and December 31, 2022 (in millions):

 

                 

Asset derivatives

  

Liability derivatives

  
   

Notional amount

  

Balance

  

Fair value

  

Balance

  

Fair value

  
   

September

    

December

  

sheet

  

September

    

December

  

sheet

  

September

    

December

  
    30, 2023     31, 2022  

location

   30, 2023     31, 2022  

location

   30, 2023     31, 2022  

Derivatives designated as hedging instruments (1)

                                                    

Foreign exchange and precious metals lease contracts (2)

   $ 301     $ 419  

Other current assets

   $ 165     $ 26  

Other accrued liabilities

         $ (1 )
                 

Other assets

     139       78                    
                                                     

Derivatives not designated as hedging instruments

                                                    

Foreign exchange contracts

     1,486       2,231  

Other current assets

     18       44  

Other accrued liabilities

   $ (23 )     (49 )

Translated earnings contracts

     5,128       7,543  

Other current assets

     380       384  

Other accrued liabilities

     (127 )     (124 )
                 

Other assets

     71       146  

Other liabilities

     (65 )     (17 )

Total derivatives

   $ 6,915     $ 10,193       $ 773     $ 678       $ (215 )   $ (191 )

 

(1) The amounts above do not include €850 million of euro-denominated debt ($892 million equivalent as of September 30, 2023), which is a non-derivative financial instrument designated as a net investment hedge.
(2)

As of  September 30, 2023 and December 31, 2022, derivatives designated as hedging instruments include foreign exchange cash flow hedges with total notional amounts of $301 million and $419 million, respectively, and fair value hedges of leased precious metals with total notional amounts of 21,652 troy ounces and 23,152 troy ounces, respectively. 

 

The following table summarizes the total notional amounts for translated earnings contracts as of  September 30, 2023 and December 31, 2022 (in billions):

 

   

September 30,

    

December 31,

  
   

2023

    

2022

  

Average rate forward contracts:

                

Japanese yen-denominated

   $ 0.2     $ 0.1  

South Korean won-denominated

     1.7       2.1  

Other foreign currencies (1)

     1.1       0.7  

Option contracts:

                

Japanese yen-denominated (2)

     2.1       4.6  

Total notional amount for translated earning contracts

   $ 5.1     $ 7.5  

 

(1) Denominational currencies for other average rate forward contracts include the Chinese yuan, New Taiwan dollar, euro and British pound.
(2) Japanese yen-denominated option contracts include purchased put and call options, knock-out options and zero-cost collars. With respect to the zero-cost collars, the total 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 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 September 30, 2023 and December 31, 2022 is $91 million and $19 million, respectively.

 

   

Three months ended September 30,

  
                 

Location of gain (loss)

                
   

Gain recognized

  

reclassified from

  

Gain (loss) reclassified

  

Derivative hedging

  

in other comprehensive

  

accumulated

  

from accumulated

  

relationships for cash

  

loss (OCL)

  

OCL into income

  

OCL into income

  

flow and fair value hedges

  

2023

    

2022

  

effective (ineffective)

  

2023

    

2022

  
                                   
                 

Net sales

           $ 15  
                 

Cost of sales

   $ 14       6  

Foreign exchange contracts and other

   $ 28     $ 4  

Other income, net

     (1 )     (1 )

Total cash flow and fair value hedges

   $ 28     $ 4       $ 13     $ 20  

 

   

Nine months ended September 30,

  
                 

Location of gain (loss)

                
   

Gain recognized

  

reclassified from

  

Gain (loss) reclassified

  

Derivative hedging

  

in other comprehensive

  

accumulated

  

from accumulated

  

relationships for cash

  

loss (OCL)

  

OCL into income

  

OCL into income

  

flow and fair value hedges

  

2023

    

2022

  

effective (ineffective)

  

2023

    

2022

  
                                   
                 

Net sales

           $ 38  
                 

Cost of sales

   $ 32       19  

Foreign exchange contracts and other

   $ 102     $ 24  

Other income, net

     (3 )     (3 )

Total cash flow and fair value hedges

   $ 102     $ 24       $ 29     $ 54  

 

     

Gain (loss) recognized in income

  
     

Three months ended

    

Nine months ended

  
 

Location of gain (loss)

  

September 30,

    

September 30,

  

Undesignated derivatives

recognized in income

  

2023

    

2022

    

2023

    

2022

  
                                   

Foreign exchange contracts

Other income, net

   $ (5 )   $ 11     $ 23     $ 70  

Translated earnings contracts

Translated earnings contract gain (loss), net

     20       (68 )     128       257  

Total undesignated

   $ 15     $ (57 )   $ 151     $ 327  

 
v3.23.3
Note 11 - Fair Value Measurements
 9 Months Ended
Sep. 30, 2023
Notes to Financial Statements  
Fair Value Disclosures [Text Block]

11. Fair Value Measurements

 

The following table provides fair value measurement information for the Company’s major categories of financial assets and liabilities measured on a recurring basis (in millions):

 

   

September 30, 2023

    

December 31, 2022

  
   

Total

    

Level 1

    

Level 2

    

Level 3

    

Total

    

Level 1

    

Level 2

    

Level 3

  

Current assets:

                                                                

Other current assets (1)

   $ 617     $ 4     $ 563     $ 50     $ 505     $ 2     $ 454     $ 49  

Non-current assets:

                                                                

Other assets (1)

   $ 212     $ 2     $ 210             $ 225             $ 224     $ 1  

Current liabilities:

                                                                

Other accrued liabilities (1)

   $ 150             $ 150             $ 174             $ 174          

Non-current liabilities:

                                                                

Other liabilities (1)

   $ 82             $ 82             $ 34             $ 34          

 

(1) Derivative assets and liabilities include foreign exchange and precious metals lease contracts which were measured using observable inputs for similar assets and liabilities.

 

There were no significant financial assets and liabilities measured on a non-recurring basis as of September 30, 2023 and December 31, 2022.

 
v3.23.3
Note 12 - Shareholders' Equity
 9 Months Ended
Sep. 30, 2023
Notes to Financial Statements  
Equity [Text Block]

12. Shareholders’ Equity

 

Fixed Rate Cumulative Convertible Preferred Stock, Series A

 

We 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, we executed a 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 2022 and 2021. The remaining payment of approximately $507 million was made in April 2023.

 

Share Repurchase Program

 

In 2019, the Board authorized the repurchase of up to $5.0 billion of common stock (“2019 Authorization”).

 

During the three and nine months ended  September 30, 2022, the Company repurchased 0.5 million shares and 6.0 million shares, respectively, of common stock on the open market for approximately $17 million and $221 million, respectively, as part of its 2019 Authorization. No shares were purchased on the open market during the three and nine months ended September 30, 2023.

 

As of September 30, 2023, approximately $3.3 billion remains available under the Company’s 2019 Authorization.

 

Common Stock Dividends

 

On October 4, 2023, Corning’s Board of Directors declared a dividend of $0.28 per share of common stock.  The dividend will be payable on December 15, 2023.

 

Accumulated Other Comprehensive Loss

 

For the three and nine months ended September 30, 2023 and 2022, 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) (1):

 

  

Three months ended

  

Nine months ended

 
  

September 30,

  

September 30,

 
  

2023

  

2022

  

2023

  

2022

 

Beginning balance

 $(2,114) $(1,783) $(1,712) $(933)

Loss on foreign currency translation (2)

  (195)  (664)  (588)  (1,497)

Equity method affiliates (3)

  4   (21)  (5)  (38)

Net current-period other comprehensive loss

  (191)  (685)  (593)  (1,535)

Ending balance

 $(2,305) $(2,468) $(2,305) $(2,468)

 

(1)

All amounts are after tax. Amounts in parentheses indicate debits to accumulated other comprehensive loss.

(2)

For the three and nine months ended September 30, 2023, amounts are net of tax benefit of $14 million and $33 million, respectively.  For the three and nine months ended September 30, 2022, amounts are net of tax benefit of $49 million and $87 million, respectively.

(3)

Tax effects are not significant.

 
v3.23.3
Note 13 - Share-based Compensation
 9 Months Ended
Sep. 30, 2023
Notes to Financial Statements  
Share-Based Payment Arrangement [Text Block]

13. Share-Based Compensation

 

Total share-based compensation cost was $57 million and $168 million for the three and nine months ended September 30, 2023, respectively, and $52 million and $145 million for the three and nine months ended September 30, 2022, 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 nine months ended September 30, 2023:

 

      

Weighted

 
  

Number

  

average

 
  

of shares

  

grant-date

 
  

(in thousands)

  

fair value

 

Non-vested shares and share units as of December 31, 2022

  11,299  $29.19 

Granted

  7,221   35.06 

Vested

  (4,462)  23.71 

Forfeited

  (534)  33.97 

Non-vested shares and share units as of September 30, 2023

  13,524  $33.94 


Performance-Based Restricted Stock Units

 

The following table summarizes the changes in non-vested performance-based restricted stock units for the nine months ended September 30, 2023:

 

      

Weighted

 
  

Number

  

average

 
  

of shares

  

grant-date

 
  

(in thousands)

  

fair value

 

Non-vested share units as of December 31, 2022

  4,696  $35.41 

Granted

  1,674   35.08 

Vested

  (3,586)  33.37 

Performance adjustments

  (406)  36.40 

Forfeited

  (37)  36.08 

Non-vested share units as of September 30, 2023

  2,341  $38.62 

 

Stock Options

 

The following table summarizes information concerning stock options as of  September 30, 2023 and the related activity for the nine months ended September 30, 2023:

 

          

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, 2022

  9,665  $22.92         

Exercised

  (1,981)  19.74         

Forfeited and expired

  (48)  19.65         

Options outstanding as of September 30, 2023

  7,636   23.76   5.20  $55,832 

Options vested and exercisable as of September 30, 2023

  7,636   23.76   5.20   55,832 

 

There were no stock options granted during the nine months ended September 30, 2023 or 2022. 

 
v3.23.3
Note 14 - Reportable Segments
 9 Months Ended
Sep. 30, 2023
Notes to Financial Statements  
Segment Reporting Disclosure [Text Block]

14. 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.  The net sales for this group are primarily attributable to Hemlock, which is 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 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.  The most significant constant-currency adjustment relates to the Japanese yen exposure within the Display Technologies segment.  Management utilizes constant-currency reporting based on internally-derived rates, as detailed below, which are closely aligned with the currencies we have hedged. 

 

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.  Further, it reflects the underlying economics of the translated earnings contracts used to mitigate the impact of changes in currency exchange rates on our earnings and cash flows.

 

Constant-currency rates are as follows and are applied to all periods presented:

 

 

Currency

 

Japanese yen

 

Korean won

 

Chinese yuan

 

New Taiwan dollar

 

Euro

 

Rate

 

¥107

 

₩1,175

 

¥6.7

 

NT$31

 

€.81

 

In addition, certain income and expenses are excluded from segment net income and included in the unallocated amounts in the reconciliation of reportable segment net income to consolidated net income. 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 to consolidated net income. Segment net income (loss) may not be consistent with measures used by other companies.

 

Segment Information (in millions):

 

                 Hemlock    
                 and    
                 

Emerging

    
  

Optical

  

Display

  

Specialty

  

Environmental

  

Life

  

Growth

     
  

Communications

  

Technologies

  

Materials

  

Technologies

  

Sciences

  

Businesses

  

Total

 

Three months ended September 30, 2023

                            

Segment net sales

 $918  $972  $563  $449  $230  $327  $3,459 

Depreciation (1)

 $65  $119  $37  $32  $18  $37  $308 

Research, development and engineering expenses (2)

 $60  $26  $62  $26  $7  $41  $222 

Income tax provision (3)

 $(24) $(64) $(19) $(27) $(4) $(2) $(140)

Segment net income (loss)

 $91  $242  $72  $99  $13  $(8) $509 

 

                      

Hemlock

     
                      

and

     
                      

Emerging

     
  

Optical

  

Display

  

Specialty

  

Environmental

  

Life

  

Growth

     
  

Communications

  

Technologies

  

Materials

  

Technologies

  

Sciences

  

Businesses

  

Total

 

Three months ended September 30, 2022

                            

Segment net sales

 $1,317  $686  $519  $425  $312  $407  $3,666 

Depreciation (1)

 $58  $124  $36  $31  $14  $38  $301 

Research, development and engineering expenses (2)

 $60  $31  $66  $25  $10  $43  $235 

Income tax provision (3)

 $(50) $(35) $(26) $(23) $(11) $(8) $(153)

Segment net income

 $183  $134  $96  $87  $43  $18  $561 

 

                      

Hemlock

     
                      

and

     
                      

Emerging

     
  

Optical

  

Display

  

Specialty

  

Environmental

  

Life

  

Growth

     
  

Communications

  

Technologies

  

Materials

  

Technologies

  

Sciences

  

Businesses

  

Total

 

Nine months ended September 30, 2023

                            

Segment net sales

 $3,109  $2,663  $1,392  $1,337  $717  $1,090  $10,308 

Depreciation (1)

 $195  $362  $111  $97  $52  $105  $922 

Research, development and engineering expenses (2)

 $176  $73  $172  $73  $25  $121  $640 

Income tax provision (3)

 $(105) $(161) $(38) $(77) $(9) $(22) $(412)

Segment net income

 $390  $610  $144  $288  $33  $34  $1,499 

 

                      

Hemlock

     
                      

and

     
                      

Emerging

     
  

Optical

  

Display

  

Specialty

  

Environmental

  

Life

  

Growth

     
  

Communications

  

Technologies

  

Materials

  

Technologies

  

Sciences

  

Businesses

  

Total

 

Nine months ended September 30, 2022

                            

Segment net sales

 $3,828  $2,523  $1,497  $1,190  $934  $1,200  $11,172 

Depreciation (1)

 $185  $426  $118  $98  $44  $111  $982 

Research, development and engineering expenses (2)

 $173  $92  $163  $74  $28  $121  $651 

Income tax provision (3)

 $(146) $(157) $(70) $(59) $(32) $(19) $(483)

Segment net income

 $531  $598  $262  $223  $122  $35  $1,771 

 

(1)Depreciation expense for Corning’s reportable segments 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 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

  

Nine months ended

 
  

September 30,

  

September 30,

 
  

2023

  

2022

  

2023

  

2022

 

Net sales of reportable segments

 $3,132  $3,259  $9,218  $9,972 

Net sales of Hemlock and Emerging Growth Businesses

  327   407   1,090   1,200 

Impact of constant currency reporting (1)

  (286)  (178)  (714)  (389)

Consolidated net sales

 $3,173  $3,488  $9,594  $10,783 

 

(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 consolidated net income (in millions):

 

  

Three months ended

  

Nine months ended

 
  

September 30,

  

September 30,

 
  

2023

  

2022

  

2023

  

2022

 

Net income of reportable segments

 $517  $543  $1,465  $1,736 

Net (loss) income of Hemlock and Emerging Growth Businesses

  (8)  18   34   35 

Unallocated amounts:

                

Impact of constant currency reporting

  (212)  (136)  (535)  (319)

Gain (loss) on foreign currency hedges related to translated earnings

  20   (68)  128   257 

Translation gain on Japanese yen-denominated debt

  35   84   162   321 

Litigation, regulatory and other legal matters

  (32)  (23)  (44)  (65)

Research, development, and engineering expenses (1)

  (40)  (43)  (127)  (115)

Amortization of intangibles

  (30)  (31)  (92)  (92)

Interest expense, net

  (62)  (59)  (179)  (180)

Income tax benefit

  105   119   234   103 

Severance charges (2)

  (13)  (8)  (86)  (8)

Disposal of assets and other charges and credits (3)

  (59)  (130)  (184)  (209)

Gain on sale of business

           53 

Other corporate items

  (57)  (58)  (155)  (165)

Net income attributable to Corning Incorporated

 $164  $208  $621  $1,352 

 

(1)Amount does not include research, development and engineering expense related to severance charges and disposal of assets and other charges and credits.
(2)For the three and nine months ended September 30, 2023, the amount recorded in cost of sales in the consolidated statements of income was $10 million and $51 million, respectively. For the three and nine months ended September 30, 2022, the amount recorded in cost of sales in the consolidated statements was not material.
(3)For the three and nine months ended September 30, 2023, the amount recorded in cost of sales in the consolidated statements of income was $53 million and $145 million, respectively.  The activity primarily related to asset write-offs during the period.  For the three and nine months ended September 30, 2022, the amount recorded in cost of sales in the consolidated statements of income was $124 million and $192 million, respectively.  The activity primarily related to capacity optimization of an emerging growth business. 

 
v3.23.3
Item 5. Other Informaion
 9 Months Ended
Sep. 30, 2023
Notes to Financial Statements  
Issuer Rule 10b5-1, Material Terms [Text Block]

Item 5. Other Information

 

During the three months ended September 30, 2023, none of our officers or directors 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.”
v3.23.3
Significant Accounting Policies (Policies)
 9 Months Ended
Sep. 30, 2023
Accounting Policies [Abstract]  
Basis of Accounting, Policy [Policy Text Block]

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, 2022 (“2022 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 (“Hemlock”) 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.

 
v3.23.3
Note 2 - Revenue (Tables)
 9 Months Ended
Sep. 30, 2023
Notes Tables  
Disaggregation of Revenue [Table Text Block]
   

Three months ended

    

Nine months ended

  
   

September 30,

    

September 30,

  
   

2023

    

2022

    

2023

    

2022

  

Telecommunication products

   $ 918     $ 1,317     $ 3,109     $ 3,828  

Display products

     727       558       2,061       2,223  

Specialty glass products

     560       516       1,384       1,494  

Environmental substrate and filter products

     420       393       1,260       1,130  

Life science products

     221       297       690       908  

Polycrystalline silicon products

     230       288       765       877  

All other products

     97       119       325       323  

Total revenue

   $ 3,173     $ 3,488     $ 9,594     $ 10,783  
v3.23.3
Note 3 - Income Taxes (Tables)
 9 Months Ended
Sep. 30, 2023
Notes Tables  
Schedule of Income Tax Provisions and Rates [Table Text Block]
   

Three months ended

    

Nine months ended

  
   

September 30,

    

September 30,

  
   

2023

    

2022

    

2023

    

2022

  

Provision for income taxes

   $ (35 )   $ (34 )   $ (178 )   $ (380 )

Effective tax rate

     16.1 %     13.1 %     20.8 %     21.2 %
v3.23.3
Note 4 - Earnings per Common Share (Tables)
 9 Months Ended
Sep. 30, 2023
Notes Tables  
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]
  

Three months ended

  

Nine months ended

 
  

September 30,

  

September 30,

 
  

2023

  

2022

  

2023

  

2022

 

Net income attributable to Corning Incorporated

 $164  $208  $621  $1,352 
                 

Weighted-average common shares outstanding – basic

  850   843   848   843 

Effect of dilutive securities:

                

Stock options and other awards

  9   12   10   14 

Weighted-average common shares outstanding – diluted

  859   855   858   857 

Basic earnings per common share

 $0.19  $0.25  $0.73  $1.60 

Diluted earnings per common share

 $0.19  $0.24  $0.72  $1.58 
                 

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

                

Stock options and other awards

  3   3   3   2 
v3.23.3
Note 5 - Inventories (Tables)
 9 Months Ended
Sep. 30, 2023
Notes Tables  
Schedule of Inventory, Current [Table Text Block]
   

September 30,

    

December 31,

  
   

2023

    

2022

  

Finished goods

   $ 1,226     $ 1,315  

Work in process

     513       571  

Raw materials and accessories

     479       537  

Supplies and packing materials

     437       481  

Inventories

   $ 2,655     $ 2,904  
v3.23.3
Note 6 - Other Liabilities (Tables)
 9 Months Ended
Sep. 30, 2023
Notes Tables  
Other Liabilities [Table Text Block]
   

September 30,

    

December 31,

  
   

2023

    

2022

  

Current liabilities:

                

Wages and employee benefits

   $ 505     $ 727  

Income taxes

     125       127  

Derivative instruments (Note 10)

     150       174  

Deferred revenue (Note 2)

     185       144  

Customer deposits (Note 2)

     162       132  

Share repurchase liability (Note 12)

           506  

Short-term operating leases

     108       111  

Other current liabilities

     1,294       1,226  

Other accrued liabilities

   $ 2,529     $ 3,147  
                 

Non-current liabilities:

                

Defined benefit pension plan liabilities

   $ 685     $ 668  

Derivative instruments (Note 10)

     65       17  

Deferred revenue (Note 2)

     669       725  

Customer deposits (Note 2)

     1,044       1,137  

Deferred tax liabilities

     201       243  

Long-term operating leases

     842       795  

Other non-current liabilities

     1,127       1,370  

Other liabilities

   $ 4,633     $ 4,955  
v3.23.3
Note 8 - Employee Retirement Plans (Tables)
 9 Months Ended
Sep. 30, 2023
Notes Tables  
Schedule of Net Benefit Costs [Table Text Block]
   

Pension benefits

    

Postretirement benefits

  
   

Three months ended

    

Nine months ended

    

Three months ended

    

Nine months ended

  
   

September 30,

    

September 30,

    

September 30,

    

September 30,

  
   

2023

    

2022

    

2023

    

2022

    

2023

    

2022

    

2023

    

2022

  

Service cost

   $ 25     $ 32     $ 75     $ 96     $ 1     $ 3     $ 4     $ 7  

Interest cost

     45       28       133       82       6       3       17       11  

Expected return on plan assets

     (46 )     (55 )     (138 )     (164 )                        

Amortization of actuarial net gain

                             (6 )           (17 )      

Amortization of prior service cost (credit)

     2       1       5       4       (2 )     (2 )     (4 )     (4 )

Recognition of actuarial loss (gain)

     12             (16 )     22             (2 )           (3 )

Special termination benefit charge

                 5                                

Total pension and postretirement benefit expense (income)

   $ 38     $ 6     $ 64     $ 40     $ (1 )   $ 2     $ —     $ 11  
v3.23.3
Note 10 - Hedging Activities (Tables)
 9 Months Ended
Sep. 30, 2023
Notes Tables  
Schedule of Notional Amounts of Outstanding Derivative Positions [Table Text Block]
                 

Asset derivatives

  

Liability derivatives

  
   

Notional amount

  

Balance

  

Fair value

  

Balance

  

Fair value

  
   

September

    

December

  

sheet

  

September

    

December

  

sheet

  

September

    

December

  
    30, 2023     31, 2022  

location

   30, 2023     31, 2022  

location

   30, 2023     31, 2022  

Derivatives designated as hedging instruments (1)

                                                    

Foreign exchange and precious metals lease contracts (2)

   $ 301     $ 419  

Other current assets

   $ 165     $ 26  

Other accrued liabilities

         $ (1 )
                 

Other assets

     139       78                    
                                                     

Derivatives not designated as hedging instruments

                                                    

Foreign exchange contracts

     1,486       2,231  

Other current assets

     18       44  

Other accrued liabilities

   $ (23 )     (49 )

Translated earnings contracts

     5,128       7,543  

Other current assets

     380       384  

Other accrued liabilities

     (127 )     (124 )
                 

Other assets

     71       146  

Other liabilities

     (65 )     (17 )

Total derivatives

   $ 6,915     $ 10,193       $ 773     $ 678       $ (215 )   $ (191 )
Derivatives Not Designated as Hedging Instruments [Table Text Block]
   

September 30,

    

December 31,

  
   

2023

    

2022

  

Average rate forward contracts:

                

Japanese yen-denominated

   $ 0.2     $ 0.1  

South Korean won-denominated

     1.7       2.1  

Other foreign currencies (1)

     1.1       0.7  

Option contracts:

                

Japanese yen-denominated (2)

     2.1       4.6  

Total notional amount for translated earning contracts

   $ 5.1     $ 7.5  
Not Designated as Hedging Instrument [Member]  
Notes Tables  
Schedule of Derivative Instruments, Effect on Other Comprehensive Income (Loss) [Table Text Block]
     

Gain (loss) recognized in income

  
     

Three months ended

    

Nine months ended

  
 

Location of gain (loss)

  

September 30,

    

September 30,

  

Undesignated derivatives

recognized in income

  

2023

    

2022

    

2023

    

2022

  
                                   

Foreign exchange contracts

Other income, net

   $ (5 )   $ 11     $ 23     $ 70  

Translated earnings contracts

Translated earnings contract gain (loss), net

     20       (68 )     128       257  

Total undesignated

   $ 15     $ (57 )   $ 151     $ 327  
Designated as Hedging Instrument [Member]  
Notes Tables  
Schedule of Derivative Instruments, Effect on Other Comprehensive Income (Loss) [Table Text Block]
   

Three months ended September 30,

  
                 

Location of gain (loss)

                
   

Gain recognized

  

reclassified from

  

Gain (loss) reclassified

  

Derivative hedging

  

in other comprehensive

  

accumulated

  

from accumulated

  

relationships for cash

  

loss (OCL)

  

OCL into income

  

OCL into income

  

flow and fair value hedges

  

2023

    

2022

  

effective (ineffective)

  

2023

    

2022

  
                                   
                 

Net sales

           $ 15  
                 

Cost of sales

   $ 14       6  

Foreign exchange contracts and other

   $ 28     $ 4  

Other income, net

     (1 )     (1 )

Total cash flow and fair value hedges

   $ 28     $ 4       $ 13     $ 20  
   

Nine months ended September 30,

  
                 

Location of gain (loss)

                
   

Gain recognized

  

reclassified from

  

Gain (loss) reclassified

  

Derivative hedging

  

in other comprehensive

  

accumulated

  

from accumulated

  

relationships for cash

  

loss (OCL)

  

OCL into income

  

OCL into income

  

flow and fair value hedges

  

2023

    

2022

  

effective (ineffective)

  

2023

    

2022

  
                                   
                 

Net sales

           $ 38  
                 

Cost of sales

   $ 32       19  

Foreign exchange contracts and other

   $ 102     $ 24  

Other income, net

     (3 )     (3 )

Total cash flow and fair value hedges

   $ 102     $ 24       $ 29     $ 54  
v3.23.3
Note 11 - Fair Value Measurements (Tables)
 9 Months Ended
Sep. 30, 2023
Notes Tables  
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block]
   

September 30, 2023

    

December 31, 2022

  
   

Total

    

Level 1

    

Level 2

    

Level 3

    

Total

    

Level 1

    

Level 2

    

Level 3

  

Current assets:

                                                                

Other current assets (1)

   $ 617     $ 4     $ 563     $ 50     $ 505     $ 2     $ 454     $ 49  

Non-current assets:

                                                                

Other assets (1)

   $ 212     $ 2     $ 210             $ 225             $ 224     $ 1  

Current liabilities:

                                                                

Other accrued liabilities (1)

   $ 150             $ 150             $ 174             $ 174          

Non-current liabilities:

                                                                

Other liabilities (1)

   $ 82             $ 82             $ 34             $ 34          
v3.23.3
Note 12 - Shareholders' Equity (Tables)
 9 Months Ended
Sep. 30, 2023
Accumulated Foreign Currency Adjustment Attributable to Parent [Member]  
Notes Tables  
Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block]
  

Three months ended

  

Nine months ended

 
  

September 30,

  

September 30,

 
  

2023

  

2022

  

2023

  

2022

 

Beginning balance

 $(2,114) $(1,783) $(1,712) $(933)

Loss on foreign currency translation (2)

  (195)  (664)  (588)  (1,497)

Equity method affiliates (3)

  4   (21)  (5)  (38)

Net current-period other comprehensive loss

  (191)  (685)  (593)  (1,535)

Ending balance

 $(2,305) $(2,468) $(2,305) $(2,468)
v3.23.3
Note 13 - Share-based Compensation (Tables)
 9 Months Ended
Sep. 30, 2023
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, 2022

  11,299  $29.19 

Granted

  7,221   35.06 

Vested

  (4,462)  23.71 

Forfeited

  (534)  33.97 

Non-vested shares and share units as of September 30, 2023

  13,524  $33.94 
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, 2022

  4,696  $35.41 

Granted

  1,674   35.08 

Vested

  (3,586)  33.37 

Performance adjustments

  (406)  36.40 

Forfeited

  (37)  36.08 

Non-vested share units as of September 30, 2023

  2,341  $38.62 
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, 2022

  9,665  $22.92         

Exercised

  (1,981)  19.74         

Forfeited and expired

  (48)  19.65         

Options outstanding as of September 30, 2023

  7,636   23.76   5.20  $55,832 

Options vested and exercisable as of September 30, 2023

  7,636   23.76   5.20   55,832 
v3.23.3
Note 14 - Reportable Segments (Tables)
 9 Months Ended
Sep. 30, 2023
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 September 30, 2023

                            

Segment net sales

 $918  $972  $563  $449  $230  $327  $3,459 

Depreciation (1)

 $65  $119  $37  $32  $18  $37  $308 

Research, development and engineering expenses (2)

 $60  $26  $62  $26  $7  $41  $222 

Income tax provision (3)

 $(24) $(64) $(19) $(27) $(4) $(2) $(140)

Segment net income (loss)

 $91  $242  $72  $99  $13  $(8) $509 
                      

Hemlock

     
                      

and

     
                      

Emerging

     
  

Optical

  

Display

  

Specialty

  

Environmental

  

Life

  

Growth

     
  

Communications

  

Technologies

  

Materials

  

Technologies

  

Sciences

  

Businesses

  

Total

 

Three months ended September 30, 2022

                            

Segment net sales

 $1,317  $686  $519  $425  $312  $407  $3,666 

Depreciation (1)

 $58  $124  $36  $31  $14  $38  $301 

Research, development and engineering expenses (2)

 $60  $31  $66  $25  $10  $43  $235 

Income tax provision (3)

 $(50) $(35) $(26) $(23) $(11) $(8) $(153)

Segment net income

 $183  $134  $96  $87  $43  $18  $561 
                      

Hemlock

     
                      

and

     
                      

Emerging

     
  

Optical

  

Display

  

Specialty

  

Environmental

  

Life

  

Growth

     
  

Communications

  

Technologies

  

Materials

  

Technologies

  

Sciences

  

Businesses

  

Total

 

Nine months ended September 30, 2023

                            

Segment net sales

 $3,109  $2,663  $1,392  $1,337  $717  $1,090  $10,308 

Depreciation (1)

 $195  $362  $111  $97  $52  $105  $922 

Research, development and engineering expenses (2)

 $176  $73  $172  $73  $25  $121  $640 

Income tax provision (3)

 $(105) $(161) $(38) $(77) $(9) $(22) $(412)

Segment net income

 $390  $610  $144  $288  $33  $34  $1,499 
                      

Hemlock

     
                      

and

     
                      

Emerging

     
  

Optical

  

Display

  

Specialty

  

Environmental

  

Life

  

Growth

     
  

Communications

  

Technologies

  

Materials

  

Technologies

  

Sciences

  

Businesses

  

Total

 

Nine months ended September 30, 2022

                            

Segment net sales

 $3,828  $2,523  $1,497  $1,190  $934  $1,200  $11,172 

Depreciation (1)

 $185  $426  $118  $98  $44  $111  $982 

Research, development and engineering expenses (2)

 $173  $92  $163  $74  $28  $121  $651 

Income tax provision (3)

 $(146) $(157) $(70) $(59) $(32) $(19) $(483)

Segment net income

 $531  $598  $262  $223  $122  $35  $1,771 
Reconciliation of Revenue from Segments to Consolidated [Table Text Block]
  

Three months ended

  

Nine months ended

 
  

September 30,

  

September 30,

 
  

2023

  

2022

  

2023

  

2022

 

Net sales of reportable segments

 $3,132  $3,259  $9,218  $9,972 

Net sales of Hemlock and Emerging Growth Businesses

  327   407   1,090   1,200 

Impact of constant currency reporting (1)

  (286)  (178)  (714)  (389)

Consolidated net sales

 $3,173  $3,488  $9,594  $10,783 
Reconciliation of Net Income (Loss) from Segments to Consolidated [Table Text Block]
  

Three months ended

  

Nine months ended

 
  

September 30,

  

September 30,

 
  

2023

  

2022

  

2023

  

2022

 

Net income of reportable segments

 $517  $543  $1,465  $1,736 

Net (loss) income of Hemlock and Emerging Growth Businesses

  (8)  18   34   35 

Unallocated amounts:

                

Impact of constant currency reporting

  (212)  (136)  (535)  (319)

Gain (loss) on foreign currency hedges related to translated earnings

  20   (68)  128   257 

Translation gain on Japanese yen-denominated debt

  35   84   162   321 

Litigation, regulatory and other legal matters

  (32)  (23)  (44)  (65)

Research, development, and engineering expenses (1)

  (40)  (43)  (127)  (115)

Amortization of intangibles

  (30)  (31)  (92)  (92)

Interest expense, net

  (62)  (59)  (179)  (180)

Income tax benefit

  105   119   234   103 

Severance charges (2)

  (13)  (8)  (86)  (8)

Disposal of assets and other charges and credits (3)

  (59)  (130)  (184)  (209)

Gain on sale of business

           53 

Other corporate items

  (57)  (58)  (155)  (165)

Net income attributable to Corning Incorporated

 $164  $208  $621  $1,352 
v3.23.3
Note 2 - Revenue (Details Textual) - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Dec. 31, 2022
Contract with Customer, Liability, Customer Deposits $ 1,200   $ 1,200   $ 1,300
Increase (Decrease) in Contract with Customer, Liability 6 $ 24 88 $ 155  
HSG [Member]          
Contract with Customer, Liability $ 854   $ 854   $ 869
Maximum [Member]          
Long Term Supply, Commitment Period (Year)     10 years    
v3.23.3
Note 2 - Revenue - Disaggregation of Revenue (Details) - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Net sales $ 3,173 $ 3,488 $ 9,594 $ 10,783
Telecommunication Products [Member]        
Net sales 918 1,317 3,109 3,828
Display Products [Member]        
Net sales 727 558 2,061 2,223
Specialty Glass Products [Member]        
Net sales 560 516 1,384 1,494
Environmental Substrate and Filter Products [Member]        
Net sales 420 393 1,260 1,130
Life Science Products [Member]        
Net sales 221 297 690 908
Polycrystalline Silicon [Member]        
Net sales 230 288 765 877
Product and Service, Other [Member]        
Net sales $ 97 $ 119 $ 325 $ 323
v3.23.3
Note 3 - Income Taxes (Details Textual) - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Jun. 30, 2023
Dec. 31, 2022
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)  
National Tax Service of Korea [Member]            
Income Taxes Receivable, Noncurrent $ 255   $ 255     $ 349
v3.23.3
Note 3 - Income Taxes - Provision for Income Taxes (Details) - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Provision for income taxes (Note 3) $ (35) $ (34) $ (178) $ (380)
Effective tax rate 16.10% 13.10% 20.80% 21.20%
v3.23.3
Note 4 - Earnings Per Common Share - Reconciliation of Earnings Per Common Share (Details) - USD ($)
$ / shares in Units, shares in Millions, $ in Millions
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Net income attributable to Corning Incorporated $ 164 $ 208 $ 621 $ 1,352
Weighted-average common shares outstanding – basic (in shares) 850 843 848 843
Stock options and other awards (in shares) 9 12 10 14
Weighted-average common shares outstanding – diluted (in shares) 859 855 858 857
Basic (Note 4) (in dollars per share) $ 0.19 $ 0.25 $ 0.73 $ 1.60
Diluted (Note 4) (in dollars per share) $ 0.19 $ 0.24 $ 0.72 $ 1.58
Stock options and other awards (in shares) 3 3 3 2
v3.23.3
Note 5 - Inventories - Inventories (Details) - USD ($)
$ in Millions
Sep. 30, 2023
Dec. 31, 2022
Finished goods $ 1,226 $ 1,315
Work in process 513 571
Raw materials and accessories 479 537
Supplies and packing materials 437 481
Inventories $ 2,655 $ 2,904
v3.23.3
Note 6 - Other Liabilities - Other Liabilities (Details) - USD ($)
$ in Millions
Sep. 30, 2023
Dec. 31, 2022
Wages and employee benefits $ 505 $ 727
Income taxes 125 127
Derivative instruments (Note 10) 150 174
Deferred revenue (Note 2) 185 144
Customer deposits (Note 2) 162 132
Share repurchase liability (Note 12) 506
Short-term operating leases 108 111
Other current liabilities 1,294 1,226
Other accrued liabilities 2,529 3,147
Defined benefit pension plan liabilities 685 668
Derivative instruments (Note 10) 65 17
Deferred revenue (Note 2) 669 725
Customer deposits (Note 2) 1,044 1,137
Deferred tax liabilities 201 243
Long-term operating leases 842 795
Other non-current liabilities 1,127 1,370
Other liabilities $ 4,633 $ 4,955
v3.23.3
Note 7 - Debt (Details Textual)
$ in Thousands, € in Millions
 9 Months Ended
May 15, 2023
USD ($)
Sep. 30, 2023
USD ($)
Sep. 30, 2022
USD ($)
May 15, 2023
EUR (€)
Dec. 31, 2022
USD ($)
Long-Term Debt and Lease Obligation   $ 7,210,000     $ 6,687,000
Proceeds from Issuance of Long-Term Debt   968,000 $ 37,000    
Commercial Paper [Member]          
Short-Term Debt   0     0
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 $ 918,000        
Long-Term Debt   892,000      
Fair Value, Inputs, Level 2 [Member]          
Long-Term Debt, Fair Value   $ 6,500,000     $ 6,100,000
v3.23.3
Note 8 - Employee Retirement Plans (Details Textual)
$ in Millions
 9 Months Ended
Sep. 30, 2023
USD ($)
Defined Benefit Plan, Plan Assets, Contributions by Employer $ 25
v3.23.3
Note 8 - Employee Retirement Plans - Net Periodic Benefit Expense (Details) - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Pension Plan [Member]        
Service cost $ 25 $ 32 $ 75 $ 96
Interest cost 45 28 133 82
Expected return on plan assets (46) (55) (138) (164)
Amortization of actuarial net gain
Amortization of prior service cost (credit) 2 1 5 4
Recognition of actuarial loss (gain) 12 (16) 22
Special termination benefit charge 5
Total pension and postretirement benefit expense (income) 38 6 64 40
Other Postretirement Benefits Plan [Member]        
Service cost 1 3 4 7
Interest cost 6 3 17 11
Expected return on plan assets
Amortization of actuarial net gain (6) (17)
Amortization of prior service cost (credit) (2) (2) (4) (4)
Recognition of actuarial loss (gain) (2) (3)
Special termination benefit charge
Total pension and postretirement benefit expense (income) $ (1) $ 2 $ 0 $ 11
v3.23.3
Note 9 - Commitments and Contingencies (Details Textual)
$ in Millions
 9 Months Ended
May 31, 2016
Sep. 30, 2023
USD ($)
Dec. 31, 2022
USD ($)
Jun. 01, 2016
Environmental Litigation [Member]        
Number of Hazardous Waste Sites   19    
Accrual for Environmental Loss Contingencies   $ 90 $ 109  
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%    
v3.23.3
Note 10 - Hedging Activities (Details Textual)
€ in Millions, $ in Millions
 3 Months Ended 9 Months Ended 12 Months Ended
May 15, 2023
EUR (€)
Sep. 30, 2023
USD ($)
Sep. 30, 2023
USD ($)
GT
Dec. 31, 2022
USD ($)
GT
Sep. 30, 2023
EUR (€)
Derivative, Notional Amount   $ 6,915 $ 6,915 $ 10,193  
Foreign Currency Cash Flow Hedge Gain (Loss) to be Reclassified During Next 12 Months   43 43    
AOCI, Cash Flow Hedge, Cumulative Gain (Loss), after Tax   91 91 19  
Net Investment Hedging [Member]          
Notional Amount of Nonderivative Instruments | € € 850        
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Gain (Loss) Arising During Period, Net of Tax   29 36    
Non-derivative, Subject to Master Netting Arrangement, before Offset   892 892   € 850
New Investment Hedges [Member] | Cash Flow Hedging [Member]          
Derivative, Notional Amount   301 301 419  
Leased Precious Metal Pools [Member]          
Hedged Asset, Fair Value Hedge, Cumulative Increase (Decrease)   (261) (261) (95)  
Leased Precious Metal Pools [Member] | Property and Equipment, Net [Member]          
Derivative Instruments in Hedges, Assets, at Fair Value   89 89 278  
Foreign Exchange Forward [Member] | Cash Flow Hedging [Member] | Designated as Hedging Instrument [Member]          
Derivative, Notional Amount   $ 301 $ 301 $ 419  
Derivative, Nonmonetary Notional Amount, Mass (Gigaton) | GT     21,652 23,152  
v3.23.3
Note 10 - Hedging Activities - Summary of Notional Amounts and Respective Fair Values of Derivative Financial Instruments (Details) - USD ($)
$ in Millions
Sep. 30, 2023
Dec. 31, 2022
Notional amount $ 6,915 $ 10,193
Asset derivatives, fair value 773 678
Liability derivatives, fair value (215) (191)
Not Designated as Hedging Instrument [Member]    
Notional amount 5,100 7,500
Foreign Exchange Contract [Member] | Designated as Hedging Instrument [Member]    
Notional amount 301 419
Foreign Exchange Contract [Member] | Designated as Hedging Instrument [Member] | Other Current Assets [Member]    
Asset derivatives, fair value [1] 165 26
Foreign Exchange Contract [Member] | Designated as Hedging Instrument [Member] | Other Accrued Liabilities [Member]    
Liability derivatives, fair value [2] (1)
Foreign Exchange Contract [Member] | Designated as Hedging Instrument [Member] | Other Assets [Member]    
Asset derivatives, fair value 139 78
Foreign Exchange Contract [Member] | Not Designated as Hedging Instrument [Member]    
Notional amount 1,486 2,231
Foreign Exchange Contract [Member] | Not Designated as Hedging Instrument [Member] | Other Current Assets [Member]    
Asset derivatives, fair value 18 44
Foreign Exchange Contract [Member] | Not Designated as Hedging Instrument [Member] | Other Accrued Liabilities [Member]    
Liability derivatives, fair value (23) (49)
Translated Earnings Contracts [Member] | Not Designated as Hedging Instrument [Member]    
Notional amount 5,128 7,543
Translated Earnings Contracts [Member] | Not Designated as Hedging Instrument [Member] | Other Current Assets [Member]    
Asset derivatives, fair value 380 384
Translated Earnings Contracts [Member] | Not Designated as Hedging Instrument [Member] | Other Accrued Liabilities [Member]    
Liability derivatives, fair value (127) (124)
Translated Earnings Contracts [Member] | Not Designated as Hedging Instrument [Member] | Other Assets [Member]    
Asset derivatives, fair value 71 146
Translated Earnings Contracts [Member] | Not Designated as Hedging Instrument [Member] | Other Liabilities [Member]    
Liability derivatives, fair value $ (65) $ (17)
[1] The amounts above do not include €850 million of euro-denominated debt ($892 million equivalent as of September 30, 2023), which is a non-derivative financial instrument designated as a net investment hedge.
[2] As of September 30, 2023 and December 31, 2022, derivatives designated as hedging instruments include foreign exchange cash flow hedges with total notional amounts of $301 million and $419 million, respectively, and fair value hedges of leased precious metals with total notional amounts of 21,652 troy ounces and 23,152 troy ounces, respectively.
v3.23.3
Note 10 - Hedging Activities - Undesignated Hedges (Details) - USD ($)
$ in Millions
Sep. 30, 2023
Dec. 31, 2022
Gross notional value for translated earning contracts $ 6,915 $ 10,193
Not Designated as Hedging Instrument [Member]    
Gross notional value for translated earning contracts 5,100 7,500
Average Rate Forward Contracts, Japanese Yen-denominated [Member] | Not Designated as Hedging Instrument [Member]    
Gross notional value for translated earning contracts 200 100
Average Rate Forward Contracts, South Korean Won-denominated [Member] | Not Designated as Hedging Instrument [Member]    
Gross notional value for translated earning contracts 1,700 2,100
Average Rate Forward Contracts, Other Foreign Currencies [Member] | Not Designated as Hedging Instrument [Member]    
Gross notional value for translated earning contracts [1] 1,100 700
Options Contracts, Japanese Yen-denominated [Member] | Not Designated as Hedging Instrument [Member]    
Gross notional value for translated earning contracts [2] $ 2,100 $ 4,600
[1] Denominational currencies for other average rate forward contracts include the Chinese yuan, New Taiwan dollar, and British pound.
[2] Japanese yen-denominated option contracts include zero-cost collars, purchased put and call options. 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 call option can be exercised at maturity.
v3.23.3
Note 10 - Hedging Activities - Summary of Effect of Designated Derivative Financial Instruments on Consolidated Financial Statements (Details) - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Consolidated net sales $ 3,173 $ 3,488 $ 9,594 $ 10,783
Cost of sales 2,169 2,426 6,574 7,192
Gain (loss) recognized in other comprehensive income 28 4 102 24
Foreign exchange contracts and other 33 106 128 391
Net income attributable to Corning Incorporated 164 208 621 1,352
Foreign Exchange Contract [Member]        
Gain (loss) recognized in other comprehensive income 28 4 102 24
Reclassification out of Accumulated Other Comprehensive Income [Member]        
Consolidated net sales   15   38
Cost of sales 14 6 32 19
Foreign exchange contracts and other (1) (1) (3) (3)
Net income attributable to Corning Incorporated $ 13 $ 20 $ 29 $ 54
v3.23.3
Note 10 - Hedging Activities - 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 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Gain (loss) recognized in income $ 15 $ (57) $ 151 $ 327
Foreign Exchange Contract [Member] | Other (Expense) Income, Net [Member]        
Gain (loss) recognized in income (5) 11 23 70
Translated Earnings Contracts [Member] | Translated Earnings Contract (Loss) Gain, Net [Member]        
Gain (loss) recognized in income $ 20 $ (68) $ 128 $ 257
v3.23.3
Note 11 - Fair Value Measurements - Financial Assets and Liabilities Measured on a Recurring Basis (Details) - USD ($)
$ in Millions
Sep. 30, 2023
Dec. 31, 2022
Other assets [1] $ 212 $ 225
Other accrued liabilities [1] 150 174
Other liabilities [1] 82 34
Fair Value, Inputs, Level 1 [Member]    
Other assets [1] 2  
Fair Value, Inputs, Level 2 [Member]    
Other assets [1] 210 224
Other accrued liabilities [1] 150 174
Other liabilities [1] 82 34
Fair Value, Inputs, Level 3 [Member]    
Other assets [1]   1
Other Current Assets [Member]    
Other current assets (1) [1] 617 505
Other Current Assets [Member] | Fair Value, Inputs, Level 1 [Member]    
Other current assets (1) [1] 4 2
Other Current Assets [Member] | Fair Value, Inputs, Level 2 [Member]    
Other current assets (1) [1] 563 454
Other Current Assets [Member] | Fair Value, Inputs, Level 3 [Member]    
Other current assets (1) [1] $ 50 $ 49
[1] Derivative assets and liabilities mainly consist of foreign exchange contracts which were measured using observable inputs for similar assets and liabilities.
v3.23.3
Note 12 - Shareholders' Equity (Details Textual) - USD ($)
$ / shares in Units, $ in Millions
 3 Months Ended 9 Months Ended 12 Months Ended
Oct. 04, 2023
Apr. 08, 2023
Apr. 08, 2022
Apr. 08, 2021
Sep. 30, 2023
Jun. 30, 2023
Mar. 31, 2023
Sep. 30, 2022
Jun. 30, 2022
Mar. 31, 2022
Sep. 30, 2023
Sep. 30, 2022
Apr. 05, 2022
Jan. 16, 2021
Dec. 31, 2020
Dec. 31, 2019
Payments for Repurchase of Common Stock                     $ 221        
Common Stock, Dividends, Per Share, Declared (in dollars per share)           $ 0.56 $ 0.28   $ 0.54 $ 0.27            
Accumulated Foreign Currency Adjustment Attributable to Parent [Member]                                
Other Comprehensive Income (Loss), Tax         $ 14     $ 49     $ 33 $ 87        
Subsequent Event [Member]                                
Common Stock, Dividends, Per Share, Declared (in dollars per share) $ 0.28                              
Share Repurchase Agreement [Member] | Samsung [Member]                                
Stock Repurchased and Retired During Period, Shares (in shares)       35,000,000                        
Payments for Repurchase of Common Stock   $ 507 $ 507 $ 507                 $ 1,500      
The 2019 Repurchase Program [Member]                                
Stock Repurchase Program, Authorized Amount                               $ 5,000
Treasury Stock, Shares, Acquired (in shares)         0     500,000     0 6,000,000.0        
Treasury Stock, Value, Acquired, Cost Method               $ 17       $ 221        
Stock Repurchase Program, Remaining Authorized Repurchase Amount         $ 3,300           $ 3,300          
Series A Convertible Preferred Stock [Member]                                
Preferred Stock, Shares Outstanding (in shares)                             2,300  
Preferred Stock, Convertible, Shares Issuable (in shares)                           115,000,000    
v3.23.3
Note 12 - Shareholders' Equity- Summary of Changes in Foreign Currency Translation Adjustment Component of Accumulated Other Comprehensive Loss (Details) - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Balance $ 11,710 $ 11,982 $ 12,275 $ 12,545
Loss on foreign currency translation (2) (191) (685) (593) (1,535)
Net current-period other comprehensive loss (203) (697) (572) (1,616)
Balance 11,744 11,548 11,744 11,548
Accumulated Foreign Currency Adjustment Attributable to Parent [Member]        
Balance [1] (2,114) (1,783) (1,712) (933)
Loss on foreign currency translation (2) [1],[2] (195) (664) (588) (1,497)
Equity method affiliates (3) [1],[3] 4 (21) (5) (38)
Net current-period other comprehensive loss (191) (685) (593) (1,535)
Balance [1] $ (2,305) $ (2,468) $ (2,305) $ (2,468)
[1] All amounts are after tax. Amounts in parentheses indicate debits to accumulated other comprehensive (loss) income.
[2] For the three and nine months ended September 30, 2023, amounts are net of tax benefit of $14 million and $33 million, respectively. For the three and nine months ended September 30, 2022, amounts are net of tax benefit of $49 million and $87 million, respectively.
[3] Tax effects are not significant.
v3.23.3
Note 13 - Share-based Compensation (Details Textual) - USD ($)
shares in Thousands, $ in Millions
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Share-Based Payment Arrangement, Expense $ 57 $ 52 $ 168 $ 145
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Gross (in shares)     0 0
v3.23.3
Note 13 - Share-based Compensation - Summary of Restricted Stock and Restricted Stock Units (Details) - Restricted Stock and Restricted Stock Units [Member]
shares in Thousands
 9 Months Ended
Sep. 30, 2023
$ / shares
shares
Non-vested shares and share units as of December 31, 2022 (in shares) | shares 11,299
Non-vested shares and share units as of December 31, 2022 (in dollars per share) | $ / shares $ 29.19
Granted, number of shares (in shares) | shares 7,221
Granted, weighted average grant-date fair value (in dollars per share) | $ / shares $ 35.06
Vested, number of shares (in shares) | shares (4,462)
Vested, weighted average grant-date fair value (in dollars per share) | $ / shares $ 23.71
Forfeited, number of shares (in shares) | shares (534)
Forfeited, weighted average grant-date fair value (in dollars per share) | $ / shares $ 33.97
Non-vested shares and share units as of September 30, 2023 (in shares) | shares 13,524
Non-vested shares and share units as of September 30, 2023 (in dollars per share) | $ / shares $ 33.94
v3.23.3
Note 13 - Share-based Compensation - Summary of Performance-based Restricted Stock Units (Details) - Performance Shares [Member]
shares in Thousands
 9 Months Ended
Sep. 30, 2023
$ / shares
shares
Non-vested shares and share units as of December 31, 2022 (in shares) | shares 4,696
Non-vested shares and share units as of December 31, 2022 (in dollars per share) | $ / shares $ 35.41
Granted, number of shares (in shares) | shares 1,674
Granted, weighted average grant-date fair value (in dollars per share) | $ / shares $ 35.08
Vested, number of shares (in shares) | shares (3,586)
Vested, weighted average grant-date fair value (in dollars per share) | $ / shares $ 33.37
Performance adjustments (in shares) | shares (406)
Performance adjustments (in dollars per share) | $ / shares $ 36.40
Forfeited, number of shares (in shares) | shares (37)
Forfeited, weighted average grant-date fair value (in dollars per share) | $ / shares $ 36.08
Non-vested shares and share units as of September 30, 2023 (in shares) | shares 2,341
Non-vested shares and share units as of September 30, 2023 (in dollars per share) | $ / shares $ 38.62
v3.23.3
Note 13 - Share-based Compensation - Summary of Stock Options Outstanding (Details)
$ / shares in Units, shares in Thousands, $ in Thousands
 9 Months Ended
Sep. 30, 2023
USD ($)
$ / shares
shares
Beginning Options Outstanding, number of shares (in shares) | shares 9,665
Beginning Options Outstanding, weighted average exercise price (in dollars per share) | $ / shares $ 22.92
Exercised, number of shares (in shares) | shares (1,981)
Exercised, weighted average exercise price (in dollars per share) | $ / shares $ 19.74
Forfeited and Expired, number of shares (in shares) | shares (48)
Forfeited and Expired, weighted average exercise price (in dollars per share) | $ / shares $ 19.65
Ending Options Outstanding, number of shares (in shares) | shares 7,636
Ending Options Outstanding, weighted average exercise price (in dollars per share) | $ / shares $ 23.76
Options Outstanding, weighted average remaining contractual term (Year) 5 years 2 months 12 days
Options Outstanding, aggregate intrinsic value | $ $ 55,832
Options vested and exercisable, number of shares (in shares) | shares 7,636
Options vested and exercisable, weighted average exercise price (in dollars per share) | $ / shares $ 23.76
Options vested and exercisable, weighted average remaining contractual term (Year) 5 years 2 months 12 days
Options vested and exercisable, aggregate intrinsic value | $ $ 55,832
v3.23.3
Note 14 - Reportable Segments (Details Textual)
$ in Millions
 3 Months Ended 9 Months Ended
Sep. 30, 2023
USD ($)
Sep. 30, 2022
USD ($)
Sep. 30, 2023
USD ($)
Sep. 30, 2022
USD ($)
Number of Reportable Segments 5 5 5 5
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent 21.00% 21.00% 21.00% 21.00%
Severance Costs     $ 86 $ 8
Cost of Sales [Member]        
Severance Costs $ 10   51  
Disposal of Assets and Other Charges and Credits $ 53 $ 124 $ 145 $ 192
v3.23.3
Note 14 - Reportable Segments - Reportable Segments (Details) - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Depreciation (1)     $ 932 $ 1,014
Research, development and engineering expenses (2) $ 270 $ 278 787 766
Income tax provision (3) 35 34 178 380
Net income of reportable segments 164 208 621 1,352
Operating Segments [Member]        
Net sales of reportable segments 3,459 3,666 10,308 11,172
Depreciation (1) 308 301 922 982
Research, development and engineering expenses (2) 222 235 640 651
Income tax provision (3) (140) (153) (412) (483)
Net income of reportable segments 509 561 1,499 1,771
Optical Communications [Member] | Operating Segments [Member]        
Net sales of reportable segments 918 1,317 3,109 3,828
Depreciation (1) 65 58 195 185
Research, development and engineering expenses (2) 60 60 176 173
Income tax provision (3) (24) (50) (105) [1] (146)
Net income of reportable segments 91 183 390 531
Display Products [Member] | Operating Segments [Member]        
Net sales of reportable segments 972 686 2,663 2,523
Depreciation (1) 119 124 362 426
Research, development and engineering expenses (2) 26 31 73 92
Income tax provision (3) (64) (35) (161) (157)
Net income of reportable segments 242 134 610 598
Specialty Materials [Member] | Operating Segments [Member]        
Net sales of reportable segments 563 519 1,392 1,497
Depreciation (1) 37 36 111 118
Research, development and engineering expenses (2) 62 66 172 [2] 163
Income tax provision (3) (19) (26) (38) (70)
Net income of reportable segments 72 96 144 262
Environmental Technologies [Member] | Operating Segments [Member]        
Net sales of reportable segments 449 425 1,337 1,190
Depreciation (1) 32 31 97 [3] 98
Research, development and engineering expenses (2) 26 25 73 74
Income tax provision (3) (27) (23) (77) (59)
Net income of reportable segments 99 87 288 223
Life Science Products [Member] | Operating Segments [Member]        
Net sales of reportable segments 230 312 717 934
Depreciation (1) 18 14 52 44
Research, development and engineering expenses (2) 7 10 25 28
Income tax provision (3) (4) (11) (9) (32)
Net income of reportable segments 13 43 33 122
Hemlock and Emerging Growth Businesses [Member]        
Net sales of reportable segments 327 407 1,090 1,200
Depreciation (1) 37 38 105 111
Research, development and engineering expenses (2) 41 43 121 121
Income tax provision (3) (2) (8) (22) (19)
Net income of reportable segments $ (8) $ 18 $ 34 $ 35
[1] Income tax provision reflects a tax rate of 21%.
[2] Research, development and engineering expenses include direct project spending that is identifiable to a segment.
[3] Depreciation expense for Corning’s reportable segments includes an allocation of depreciation of corporate property not specifically identifiable to a segment.
v3.23.3
Note 14 - Reportable Segments - Reconciliation of Reportable Segments and All Other Net Sales to Consolidated Net Sales (Details) - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Consolidated net sales $ 3,173 $ 3,488 $ 9,594 $ 10,783
Hemlock and Emerging Growth Businesses [Member]        
Net sales of reportable segments 327 407 1,090 1,200
Display Technologies [Member]        
Impact of constant currency reporting (1) [1] (286) (178) (714) (389)
Operating Segments [Member]        
Net sales of reportable segments 3,459 3,666 10,308 11,172
Operating Segments [Member] | Reportable Segments [Member]        
Net sales of reportable segments $ 3,132 $ 3,259 $ 9,218 $ 9,972
[1] This amount primarily represents the impact of foreign currency adjustments in the Display Technologies segment.
v3.23.3
Note 14 - Reportable Segments - Reconciliation of Reportable Segment Net Income (Loss) to Consolidated Net Income (Details) - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Net income of reportable segments $ 164 $ 208 $ 621 $ 1,352
Gain (loss) on foreign currency hedges related to translated earnings 20 (68) 128 257
Research, development, and engineering expenses (1) (270) (278) (787) (766)
Amortization of intangibles (30) (31) (92) (92)
Interest expense, net (82) (73) (239) (216)
Provision for income taxes (Note 3) (35) (34) (178) (380)
Severance charges (2)     (86) (8)
Gain on sale of business     53
Other corporate items (33) (106) (128) (391)
Operating Segments [Member]        
Net income of reportable segments 509 561 1,499 1,771
Research, development, and engineering expenses (1) (222) (235) (640) (651)
Provision for income taxes (Note 3) 140 153 412 483
Operating Segments [Member] | Reportable Segments [Member]        
Net income of reportable segments 517 543 1,465 1,736
Operating Segments [Member] | Nonreportable Segments [Member]        
Net income of reportable segments (8) 18 34 35
Segment Reconciling Items [Member]        
Net income of reportable segments 164 208 621 1,352
Impact of constant currency reporting (1) (212) (136) (535) (319)
Gain (loss) on foreign currency hedges related to translated earnings 20 (68) 128 257
Translation gain on Japanese yen-denominated debt 35 84 162 321
Litigation, regulatory and other legal matters (32) (23) (44) (65)
Research, development, and engineering expenses (1) [1] (40) (43) (127) (115)
Amortization of intangibles (30) (31) (92) (92)
Interest expense, net (62) (59) (179) (180)
Provision for income taxes (Note 3) 105 119 234 103
Severance charges (2) [2] (13) (8) (86) (8)
Disposal of assets and other charges and credits (3) [3] (59) (130) (184) (209)
Gain on sale of business 53
Other corporate items $ (57) $ (58) $ (155) $ (165)
[1] Amount does not include research, development, and engineering expense related to restructuring, impairment and other charges and credits.
[2] For the three and nine months ended September 30, 2023, the amount recorded in cost of sales in the consolidated statements of income was $10 million and $51 million, respectively. For the three and nine months ended September 30, 2022, the amount recorded in cost of sales in the consolidated statements was not material.
[3] For the three and nine months ended September 30, 2023, the amount recorded in cost of sales in the consolidated statements of income was $53 million and $145 million, respectively. The activity primarily related to asset write-offs during the period. For the three and nine months ended September 30, 2022, the amount recorded in cost of sales in the consolidated statements of income was $124 million and $192 million, respectively. The activity primarily related to capacity optimization of an emerging growth business.
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