UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

Form 10-K

For the fiscal year ended December 31, 20172020

OR

For the transition period from ___ to ___

Commission file number: 1-3247

CORNING INCORPORATED

(Exact name of registrant as specified in its charter)

607-974-9000

(Registrant’s telephone number, including area code)

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

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes   ☒x                                   No   ☐¨

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act.

Yes   ☐¨                                   No   ☒x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the 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   ☒x                                   No   ☐¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files.)

Yes   ☒x                                   No   ☐¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment of this Form 10‑K.  ☒

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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.

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 provided pursuant to Section 13(a) of the Exchange Act.  ☐¨

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.  x

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

Yes   ☐¨                                   No   ☒x

As of June 30, 2017,2020, the aggregate market value of the registrant’s common stock held by non-affiliates of the registrant was $27$19 billion based on the $30.05$25.90 price as reported on the New York Stock Exchange.

There were 857,453,098768,367,889 shares of Corning’s common stock issued and outstanding as of January 31, 2018.2021.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Registrant’s Definitive Proxy Statement dated March 16, 2018,18, 2021, and filed for the Registrant’s 20182021 Annual Meeting of Shareholders are incorporated into Part III of this Annual Report on Form 10-K, as specifically set forth in Part III.

PART I

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

This report contains forward-looking statements that involve a number of risks and uncertainties. These statements relate to our future plans, objectives, expectations and estimates and may contain words such as “believes,” “expects,” “anticipates,” “estimates,” “forecasts,” or similar expressions. Our actualActual results could differ materially from what is expressed or forecasted in our 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.

Item 1. Business

General

Corning traces its origins to a glass business established in 1851. The present corporation was incorporated in the State of New York in December 1936. The Company’s name was changed from Corning Glass Works to Corning Incorporated on April 28, 1989.

Corning Incorporated is a leading innovator in materials science. For more than 165almost 170 years, Corning has combined its unparalleled expertise in glass science, ceramic science, and optical physics with deep manufacturing and engineering capabilities to develop category-defining products that transform industries and enhance people's lives. We succeed through sustained investment in research and development, a unique combination of material and process innovation, and deep, trust-based relationships with customers who are global leaders in their industries.

Corning'sCorning’s capabilities are versatile and synergistic, which allowsallowing the company to evolve to meet changing market needs, while also helping our customers capture new opportunities in dynamic industries. Today, Corning'sCorning’s markets include optical communications, mobile consumer electronics, display technology, automotive emissions control, laboratory products and life sciences vessels.other glass products. Corning's industry-leading products include damage-resistant cover glass for mobile devices; precision glass for advanced displays; optical fiber and cable, wireless technologies, and connectivity solutions for state-of-the-art communications networks; trusted products to accelerate drug discovery and delivery; and clean-air technologies for cars and trucks.

Corning operates in five reportable segments: Display Technologies, Optical Communications, Environmental Technologies, Specialty Materials and Life Sciences, and manufactures products at 105122 plants in 15 countries.

Display Technologies Segment

Corning’s Display Technologies segment manufactures glass substrates for flat panel displays, including liquid crystal displays (“LCDs”) and organic light-emitting diode (“OLEDs”) that are used primarily in LCD televisions, notebook computers, desktop monitors, tablets and flat panel desktop monitors.handheld devices.  This segment develops, manufactures, and supplies high quality glass substrates using technology expertise and a proprietary fusion manufacturing process, which Corning invented and is the cornerstone of the Company’s technology leadership in the LCDdisplay glass industry.  TheOur highly automated process yields glass substrates with a pristine surface and excellent thermal dimensional stability and dimensional uniformity – essential attributes forin the production of large, high performance LCDshigh-performance display panels.  Corning’s fusion process is scalable and we believe it is the most cost effectivecost-effective process in producing large size substrates.

We are recognized for providing productas a world leader in precision glass innovations that enable our customers to produce larger, lighter, thinner, more flexible, and higher-resolution displays. Some of the product innovations that we have launched over the past ten years utilizing our world-class processes and capabilities include the following:

Corning® EAGLE XG® Slim Glass, Corning’s flagship glass product enabling thinner televisions and monitors with larger-sized screens; it is trusted by the world’s leading panel makers for LCD displays with more than 25 billion square feet sold;

Corning Astra® Glass, an innovative glass solution designed to meet the emerging needs for high-resolution displays. This glass is designed for oxide backplanes, but enables a range of applications made using traditional aluminosilicate to specific low temperature polysilicon processes;

Corning Lotus™ NXT Glass, a high-performance display glass designed to withstand high-temperature processing requirements enabling highest-resolution displays in smaller and flexible devices; and

The world’s first Gen 10 and Gen 10.5 glass substrate sizes in support of improved efficiency in manufacturing large-sized displays.

Corning has LCDdisplay glass manufacturing operations in China, South Korea, Japan Taiwan and China,Taiwan, and services all specialtyits glass customers in all regions, directly, utilizing its manufacturing facilities throughout Asia.

Patent protection and proprietary trade secrets are important to the Display Technologies segment’s operations. Refer to the material under the heading “Patents and Trademarks” for information relating to patents and trademarks.

The Display Technologies segment represented 30%28% of Corning’s segment net sales in 2017.2020.

Optical Communications Segment

Corning invented the world’s first low-loss optical fiber in 1970. Since that milestone, we have continued to pioneer optical fiber, cable and connectivity solutions. As global bandwidth demand driven by video usage grows exponentially, telecommunications networks continue to migrate from copper to optical-based systems that can deliver the required cost-effective bandwidth-carrying capacity. Our experience puts us in a unique position to design and deliver optical solutions that reach every edge of the communications network.

This segment is classifieddivided into two main product groupings – carrier network and enterprise network. The carrier network group consists primarily of products and solutions for optical-based communications infrastructure for services such as video, data and voice communications. The enterprise network group consists primarily of optical-based communication networks sold to businesses, governments and individuals for their own use.

Our carrier network product portfolio encompasses an array of optical fiber products, including Vascade submarine optical fibers for use in submarine networks; LEAF optical fiber for long-haul, regional and metropolitan networks; SMF-28 ULL fiber for more scalable long-haul and regional networks; SMF-28e+ single-mode optical fiber that provides additional transmission wavelengths in metropolitan and access networks; ClearCurve ultra-bendable single-mode fiber for use in multiple-dwelling units and fiber-to-the-home applications; and Corning® SMF-28® Ultra Fiber, designed for high performance across the range of long-haul, metro, access, and fiber-to-the-home network applications, combining the benefits of industry-leading attenuation and improved macrobend performance in one fiber. A portion of our optical fiber is sold directly to end users and third-party cablers globally. Corning’s remaining fiber production is cabled internally and sold to end users as either bulk cable or as part of an integrated optical solution. Corning’s cable products support various outdoor, indoor/outdoor and indoor applications and include a broad range of loose tube, ribbon and drop cable designs with flame-retardant versions available for indoor and indoor/outdoor use.use including 5G networks.

In addition to optical fiber and cable, our carrier network product portfolio also includes hardware and equipment products, including cable assemblies, fiber opticfiber-optic hardware, fiber opticfiber-optic connectors, optical components and couplers, closures, network interface devices, and other accessories. These products may be sold as individual components or as part of integrated optical connectivity solutions designed for various carrier network applications. Examples of these solutions include our FlexNAP^TM terminal distribution system, which provides pre-connectorized distribution and drop cable assemblies for cost-effectively deploying fiber-to-the-home (“FTTH”) and 5G networks; and the Centrix^TM platform, which provides a high-density fiber management system with industry-leading density and innovative jumper routing that can be deployed in a wide variety of carrier switching centers.

To keep pace with surging demand for mobile bandwidth, Corning has a full complement of operator-grade distributed antenna systems (“DAS”), including the recently developed Optical Network Evolution wireless platform. The ONE™ Wireless Platform (“ONE”) is the first all-optical converged cellular and Wi-Fi® solution built on an all-optical backbone with modular service support. It provides virtually unlimited bandwidth and meets all of the wireless service needs of large-scale enterprises at a lower cost than the typical DAS solution.

In addition to our optical-based portfolio, Corning’s carrier network portfolio also contains select copper-based products including subscriber demarcation, connection and protection devices, xDSL (different variations of digital subscriber lines) passive solutions and outside plant enclosures. In addition, Corning offers coaxial RF interconnects for the cable television industry as well as for microwave applications for GPS, radars, satellites, manned and unmanned military vehicles, and wireless applications and telecommunications systems.

Our enterprise network portfolio also includes optical fiber products, including ClearCurve ultra-bendable multimode fiber for private and hyperscale data centers and other enterprise network applications; InfiniCor fibers for local area networks; and more recently ClearCurve VSDN ultra-bendable optical fiber designed to support emerging high-speed interconnects between computers and other consumer electronics devices. The remainder of Corning’s fiber production is cabled internally and sold to end users as either bulk cable or as part of an integrated optical solution. Corning’s cable products include a broad range of tight-buffered, loose tube and ribbon cable designs with flame-retardant versions available for indoor and indoor/outdoor applications that meet local building code requirements.

Corning’s hardware and equipment for enterprise network applications include cable assemblies, fiber opticfiber-optic hardware, fiber opticfiber-optic connectors, optical components and couplers, closures and other accessories. These products may be sold as individual components or as part of integrated optical connectivity solutions designed for various network applications.applications, including hyperscale data centers. Examples of enterprise network solutions include the Pretium EDGE platform, which provides high-density pre-connectorized solutions for data center applications, and continues to evolve with recent updates for upgrading to 40/100G applications and port tap modules for network monitoring; the previously mentioned ONE Wireless platform, which spans both carrier and enterprise network applications; and our recently introduced optical connectivity solutions to support customer initiatives.

In December 2017, Corning announced that it had entered into agreements with 3M to purchase substantially all of 3M’s Communication Markets Division in a cash transaction valued at approximately $900 million. The acquisition is expected to close during 2018, subject to customary closing conditions and regulatory approval.  Corning believes that this transaction will augment its Optical Communications segment’s global market access and expand its broad portfolio of high-bandwidth optical connectors, assemblies, hardware, and accessories for carrier networks, enterprise LAN, and data center solutions.

Our optical fiber manufacturing facilities are located in North Carolina, China and India. Cabling operations are located in North Carolina, Germany, Poland China and smaller regional locations. Our manufacturing operations for hardware and equipment products are located in Texas, Arizona, Mexico, Brazil, Denmark, Germany, Poland, Israel, Australia and China.

Patent protection is important to the segment’s operations. The segment has an extensive portfolio of patents relating to its products, technologies and manufacturing processes. The segment licenses certain of its patents to third parties and generates revenue from these licenses, although the royalty income is not currently material to this segment’s operating results. Corning is licensed to use certain patents owned by others, which are considered important to the segment’s operations. Refer to the material under the heading “Patents and Trademarks” for information relating to the Company’s patents and trademarks.

The Optical Communications segment represented 35%31% of Corning’s segment net sales in 2017.2020.

Specialty Materials Segment

The Specialty Materials segment manufactures products that provide more than 150 material formulations for glass, glass ceramics, and crystals, as well as precision metrology instruments and software to meet requirements for unique customer needs. Consequently, this segment operates in 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.

Our highly durable glass, known as Corning® Gorilla® Glass, is a chemically strengthened thin glass designed specifically to function as a cover, or back-enclosure glass, for mobile consumer electronic devices such as mobile phones, tablets, laptops and smartwatches. Elegant and lightweight, Corning® Gorilla® Glass is durable enough to resist many real-world events that commonly cause wear or scratch damage and glass failure, while providing optical clarity, touch sensitivity, and RF transparency, thus enabling exciting new applications in technology and design. In 2020, Corning Incorporated. All Rights Reservedunveiled its toughest Gorilla Glass yet, Corning® Gorilla® Glass Victus®, which significantly improves both drop and scratch performance, addressing consumer demand for improved durability. Corning® Gorilla® Glass is manufactured in the United States, South Korea and Taiwan.
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‎In 2020, Corning invented the world’s first transparent, color-free glass-ceramic suitable for smartphone applications, which is featured as ‘Ceramic Shield’ on the front cover of the latest iPhone. Apple and Corning partnered to develop and scale the manufacturing of Ceramic Shield, which offers unparalleled durability and toughness.

4

Patent protection is important to the segment’s operations. The segment has an extensive portfolio of patents relating to its products, technologies and manufacturing processes. Corning is licensed to use certain patents owned by others, which are also considered important to the segment’s operations. Refer to the material under the heading “Patents and Trademarks” for information relating to the Company’s patents and trademarks.

The Environmental Technologies segment represented 11%12% of Corning’s segment net sales in 2017.2020.

Specialty Materials Segment

The Specialty Materials segment manufactures products that provide more than 150 material formulations for glass, glass ceramics and fluoride crystals to meet demand for unique customer needs.  Consequently, this segment operates in a wide variety of commercial and industrial markets that include display optics and components, semiconductor optics components, aerospace and defense, astronomy, ophthalmic products, telecommunications components and cover glass that is optimized for display devices.

Our cover glass, known as Corning® Gorilla® Glass, is a thin sheet glass designed specifically to function as a cover glass for display devices such as mobile phones, tablets and notebook PCs.  Elegant and lightweight, Corning Gorilla Glass is durable enough to resist many real-world events that commonly cause glass failure, enabling exciting new applications in technology and design.  In 2016, Corning unveiled its latest Corning Gorilla Glass innovation, Corning® Gorilla® Glass 5, which is designed to provide further protection against breakage while maintaining optical clarity, touch sensitivity, and damage resistance.   

Corning Gorilla Glass is manufactured in Kentucky, South Korea, Japan and Taiwan.

Semiconductor optics manufactured by Corning includes high-performance optical material products, optical-based metrology instruments, and optical assemblies for applications in the global semiconductor industry.  Corning’s semiconductor optics products are manufactured in New York.

Other specialty glass products include glass lens and window components and assemblies and are made in New York, New Hampshire and France, and sourced from China.

Patent protection is important to the segment’s operations.  The segment has a growing portfolio of patents relating to its products, technologies and manufacturing processes.  Brand recognition and loyalty, through well-known trademarks, are important to the segment.  Refer to the material under the heading “Patents and Trademarks” for information relating to the Company’s patents and trademarks.

The Specialty Materials segment represented approximately 14% of Corning’s sales in 2017.

Life Sciences Segment

As a leading developer, manufacturer and global supplier of laboratory products for over 100105 years, Corning’s Life Sciences segment works with researchers and drug manufacturers seeking to drive innovation, increase efficiencies, reduce costs and compress timelines. Using unique expertise in the fields of materials science, polymer surface science, cell culture and cell biology, the segment provides innovative solutions that improve productivity and enable breakthrough research.research for traditional small molecule, or chemical, drugs, biologics, vaccines, and emerging cell and gene therapies.

Life Sciences products include consumables, (suchsuch as plastic vessels, liquid handling plastics, specialty surfaces, cell culture media and serum),serum, as well as general labware and equipment, thatequipment.  These products are used for drug discovery research and development, compound screening and toxicology testing, advanced cell culture research, bioprocessing, genomics drug discovery, microbiologyapplications and chemistry.  mass production of cells for clinical trials and bioproduction. 

Corning sells life sciences products under these primary brands: Corning, Falcon, Pyrex, Axygen,PYREX and Gosselin.Axygen. The products are marketed globally, primarily through distributors, to pharmaceutical and biotechnology companies, contract manufacturing organizations, central testing labs, academic institutions, hospitals, government entities, and other facilities. Corning manufactures these products in the United States inCalifornia, Illinois, Maine, Massachusetts, New York, North Carolina, Utah, and Virginia, and outside of the U.S. in China, France, Mexico and Poland.

Patent protection is important to the segment’s operations. The segment has a growing portfolio of patents relating to its products, technologies and manufacturing processes. Brand recognition and loyalty, through well-known trademarks, are important to the segment. Refer to the material under the heading “Patents and Trademarks” for more information.

The Life Sciences segment represented approximately 9% of Corning’s segment net sales in 2017.2020.

All Other

All other segments that do not meet the quantitative threshold for separate reporting have been grouped as “All Other.” This group is primarily comprised of the results of the pharmaceutical technologies business, andauto glass, new product lines and development projects, as well as other businesses and certain corporate investments suchinvestments. The Company obtained a controlling interest in Hemlock Semiconductor Group (“HSG”) during the third quarter of 2020 and has consolidated results in “All Other” as Eurokeraof September 9, 2020. 

Refer to Note 3 (Investments) and Keraglass equity affiliates. Note 4 (HSG Transactions and Acquisitions) to the consolidated financial statements for additional information on this transaction.

In 2017, Corning’s pharmaceutical technologies business, in collaboration with two leading pharmaceutical companies, introduced Corning Valor™ Glass, a  revolutionary pharmaceutical glass packaging solution that enhances the storage and delivery of today’s drug formulations and provides more reliable access to medicines essential to public health.  Insights into manufacturing processes from the pharmaceutical companies, in combination with Corning’s glass science and precision forming capabilities, helped deliver a glass packaging solution for injectable drugs in vials and cartridges. Corning Valor Glass packaging offers superior chemical durability, strength and damage resistance. These qualities enable increased throughput and more reliable access to state-of-the-art medicines for patients, while maintaining a high level of quality assurance for pharmaceutical companies.

The “All Other segmentOther” represented 1%4% of Corning’s segment net sales in 2017.2020.

Additional explanation regarding Corning and its five reportable segments, as well as financial information about geographic areas, is presented in Management’s Discussion and Analysis of Financial Condition and Results of Operations and Note 20 (Reportable Segments) to the Consolidated Financial Statements.

Corporate Investments

Dow Corning Corporation and Hemlock Semiconductor Group.    Prior to May 31, 2016, Corning and The Dow Chemical Company (“Dow Chemical”) each owned half of Dow Corning Corporation (“Dow Corning”), an equity company headquartered in Michigan that manufactures silicone products worldwide.  Dow Corning was the majority-owner of Hemlock Semiconductor Group (“HSG”), a market leader in the production of high purity polycrystalline silicon for the semiconductor and solar energy industries.

On May 31, 2016, Corning completed the strategic realignment of its equity investment in Dow Corning pursuant to the Transaction Agreement announced in December 2015.  Under the terms of the Transaction Agreement, Corning exchanged with Dow Corning its 50% stock interest in Dow Corning for 100% of the stock of a newly formed entity, which holds an equity interest in HSG and approximately $4.8 billion in cash.

Prior to realignment, HSG, a consolidated subsidiary of Dow Corning, was an indirect equity investment of Corning.  Upon completion of the exchange, Corning now has a direct equity investment in HSG.  Because our ownership percentage in HSG did not change as a result of the realignment, the investment in HSG is recorded at its carrying value, which had a negative carrying value of $383 million at the transaction date.  The negative carrying value resulted from a one-time charge to this entity in 2014 for the permanent abandonment of certain assets.  Excluding this charge, the entity is profitable and is expected to recover its equity in the near term.  financial statements.

Pittsburgh Corning Corporation.  Prior to the second quarter of 2016, Corning and PPG Industries, Inc. each owned 50% of the capital stock of Pittsburgh Corning Corporation (“PCC”).  PCC filed for Chapter 11 reorganization in 2000 and the Modified Third Amended Plan of Reorganization for PCC (the “Plan”) became effective in April 2016.  In the second quarter of 2016, Corning contributed its equity interests in PCC and Pittsburgh Corning Europe N.V. as required by the Plan and recognized a gain of $56 million for the difference between the fair value of the asbestos litigation liability and carrying value of the investment. Competition

Additional information about corporate investments is presented in Note 7 (Investments) to the Consolidated Financial Statements.

Competition

Corning competes with many large and varied manufacturers, both domestic and foreign. Some of these competitors are larger than Corning, and some have broader product lines. Corning strives to maintain and improve its market position through technology and product innovation. For the foreseeable future, Corning believes its competitive advantage lies in its commitment to research and development, its commitment to reliability of supply, and product quality and technical specification of its products. There is no assurance that Corning will be able to maintain or improve its market position or competitive advantage.

Display Technologies Segment

Corning is the largest worldwide producer of glass substrates for LCD displays.flat panel display glass. The environment for LCDhigh-performance display glass substrate products is very competitive and Corning believes it has sustainedmaintained its competitive advantages by investing in new products, continually improving its proprietary fusion manufacturing process and providing a consistent and reliable supply and continually improving its proprietary fusion manufacturing process.  Thisof high quality products. Our process allows us to deliver glass that is larger, thinner and lighter, with exceptional surface quality and without heavy metals. Asahi Glass Co. Ltd. and Nippon Electric Glass Co. Ltd. are Corning’s principal competitors in display glass substrates.

Optical Communications Segment

Corning believes it maintains a leadership position in the segment’s principal product groups, which include carrier and enterprise networks. The competitive landscape includes industry consolidation, price pressure and competition for the innovation of new products. These competitive conditions are likely to persist. Corning believes its large scalelarge-scale manufacturing experience, fiber process, technology leadership and intellectual property provide cost advantages relative to several of its competitors.

The primary competing producerscompetitors of the Optical Communications segment are CommscopeCommScope and Prysmian Group.

Specialty Materials Segment

Corning has deep capabilities in materials science, optical design, shaping, coating, finishing, metrology, and optical system assembly. Our products and capabilities in this segment position the company to meet the needs of a broad array of markets, including semiconductor, aerospace, defense, industrial, commercial, and telecommunications. Schott, Asahi Glass Co. Ltd., Nippon Electric Glass Co. Ltd. and Heraeus are the main competitors for this segment.

Environmental Technologies Segment

Corning believes it maintains a strong position in the worldwide market for automotive ceramic substrate and filter products, as well as in the heavy-duty and light-duty diesel vehicle markets.  The Company believes its competitive advantage in automotive ceramic substrate products for catalytic converters and filter products for particulate emissions in exhaust systems is based on an advantaged product portfolio, collaborative engineering design services, customer service and support, strategic global presence and continued product innovation.  Corning’s Environmental Technologies products face principal competition from NGK Insulators, Ltd. and Ibiden Co. Ltd.

Specialty Materials Segment

Corning has deep capabilities in materials science, optical design, shaping, coating, finishing, metrology, and system assembly.  Additionally, we are addressing emerging needs of the consumer electronics industry with the development of chemically strengthened glass.  Corning Gorilla Glass is a thin-sheet glass that is better able to survive events that most commonly cause glass failure.  Its advanced composition allows a deeper layer of chemical strengthening than is possible with most other chemically strengthened glasses, making it both durable and damage resistant.  Our products and capabilities in this segment position the Company to meet the needs of a broad array of markets including display, semiconductor, aerospace/defense, astronomy, vision care, industrial/commercial, and telecommunications.  For this segment, Schott, Asahi Glass Co. Ltd., Nippon Electric Glass Co. Ltd. and Heraeus are the main competitors.

Life Sciences Segment

Corning seeks to maintain a competitive advantage by emphasizing product quality, global distribution, supply chain efficiency, a broad product line and superior product attributes. Our principal competitors include Thermo Fisher Scientific, Inc., Greiner Group AG, Eppendorf AG, Sarstedt AG and Sarsedt AG.Danaher Corporation. Corning also faces increasing competition from large distributors that have pursued backward integration or introduced private label products.

Raw Materials

Corning’s manufacturing processes and products require access to uninterrupted power sources, significant quantities of industrial water, certain precious metals and various batch materials. Availability of resources (ores, minerals, polymers, helium and processed chemicals) required in manufacturing operations, appearsappear to be adequate. Corning’s suppliers, fromFrom time to time, Corning’s suppliers may experience capacity limitations in their own operations or may eliminate certain product lines. Corning believes it has adequate programs to ensure a reliable supply of raw and batch materials as well as precious metals. For many of its products,materials, Corning has alternate suppliers that would allow operations to continue without interruption in the event of specific materials shortages.

Certain key materials and proprietary equipment used in the manufacturing of products are currently sole-sourced or available only from a limited number of suppliers.  To minimize this risk, Corning closely monitors raw materials and equipment with limited availability or which are sourced through one supplier.sole-sourced suppliers.  However, any future difficulty in obtaining sufficient and timely delivery of components and/or raw materials could result in lost sales due to delays or reductions in product shipments, or reductions in Corning’s gross margins.

Patents and Trademarks

Inventions by members of Corning’s research and engineering staff continue to be important to the Company’s growth. Patents have been granted on many of these inventions in the United States and other countries. Some of these patents have been licensed to other manufacturers. Many of our earlier patents have now expired, but Corning continues to seek and obtain patents protecting its innovations. In 2017,2020, Corning was granted about 560480 patents in the United States (“U.S.”) and over 1,2801,600 patents in countries outside the U.S.

Each business segment possesses a patent portfolio that provides certain competitive advantages in protecting Corning’s innovations. Corning has historically enforced, and will continue to enforce, its intellectual property rights. At the end of 2017,2020, Corning and its wholly-owned subsidiaries owned over 10,900about 11,500 unexpired patents in various countries of which over 4,560about 4,400 were U.S. patents. Between 20182021 and 2020,2023, approximately 7%700, or about 6%, of these worldwide patents will expire, while at the same time Corning intends to seek patents protecting its newer innovations. Worldwide, Corning has about 10,3008,700 patent applications in process, with about 2,2801,950 in process in the U.S. Corning believes that its patent portfolio will continue to provide a competitive advantage in protecting the Company’s innovation, although Corning’s competitors in each of its businesses are actively seeking patent protection as well.

While each of our reportable segments has numerous patents in various countries, no one patent is considered material to any of these segments. Important U.S.-issued patents in our reportable segments include the following:

Products reported in All Other include development projects, new product lines, and other businesses or investments that do not meet the threshold for separate reporting.

Approximate number of patents granted to our reportable segments are as follows:

Diversity and Inclusion

We are focused on creating an inclusive and creative environment globally

Our workforce is comprised of 61% men and 39% women, and we have active programs, such as our UP2 (women mentoring women) initiative fostering and supporting women in their careers at Corning. In 2020, we have achieved or maintained 100% pay equity for men and women in our seven largest countries by employee population, comprising approximately 95% of our global workforce. Our 2021 pay equity review is expanding to include our entire salaried workforce across all of the countries where we operate.

We furthered our commitment to diversity and inclusion in 2020 by creating the Office of Racial Equality and Social Unity, to further our goal of a more equitable and inclusive culture at Corning and beyond. The efforts of this office will not only impact policies, practices, communications, and our corporate culture, but are intended to improve diversity and inclusion projects in the communities in which our employees live and work; and

Corning proudly sponsors over thirty different Employee Resource Groups representing vital employee constituencies, including women, African Americans, those with disabilities, the LGBTQ community, Asians, Latinos, Native Americans, and veterans, among others. 

Talent Management

Each year we formally evaluate the talent implications of our strategic business plans and align our actions and objectives accordingly.  As businesses grow organically or through acquisition, we create talent strategy plans to ensure we have the right people with the right skills in place to deliver that growth.

Corning strives to attract and recruit diverse qualified candidates to maintain our culture of innovation and to foster creativity.  We have created a strategic talent pipeline through internships, co-ops, rotational leadership programs, and partnerships with various universities.  In addition, we collaborate with organizations such as the Society of Women Engineers, The Association of Latino Professionals for America, National Society of Black Engineers, National Association of Black Accountants, Out for Undergrad, and military veterans’ groups to introduce us to qualified diverse candidates.

Businesses conduct climate surveys at least every two years, and ad hoc pulse surveys as needed, to measure engagement, satisfaction and alignment with our Values.  It is important to Corning that employees develop, grow and are inspired to continue their careers at the Company over the long-term.  We offer rich simulations, assessments, and experiences that are digital, classroom, and a blend of both, targeted to all levels in the organization.  We provide on-the-job learning experience, mentoring, and career planning to ensure immediate application and lasting impact.  Our salaried talent retention rate of 96%, for 2020, is consistently higher than the markets in which we compete for talent, aligning with our strategy of encouraging and supporting longer-term careers with Corning.

At Corning, the health and safety of our workforce is always of paramount consideration.  To achieve this our three organizational expectations are a systematic approach, engaged leadership and an independent culture. Our safety standards always meet, and often exceed, local regulatory standards.  We promote employee wellbeing through wellness programs which vary by region such as nutrition, mental health, and fitness related offerings, smoking cessation programs, and smoke free campuses.

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Executive Officers of the Registrant

John P. Bayne, Jr.  Senior Vice President & General manager, Mobile Consumer Electronics

Mr. Bayne joined Corning in 1995 as the Fallbrook plant controller, and in 1997 became an international business controller in the Optical Fiber division. From 1999 to 2003 he held a variety of management positions in Photonic Technologies. In 2003 he joined Display Technologies and in 2006, he was named president, Display Technologies, China. In 2009 he became director of strategy, Display Technologies. Beginning in 2012 he was vice president and general manager for High Performance Displays and in 2014 he assumed responsibility for the Advanced Glass Innovations group. In 2015 he was named vice president and general manager of the Gorilla Glass business. He was appointed senior vice president and general manager of Mobile Consumer Electronics in April 2020. Age 54.

Stefan Becker  Senior Vice President & Operations Controller

Mr. Becker joined Corning in 2000 through Corning’s acquisition of Siemens Communication Cable Division. From 2001, he held positions as manager, Planning and Analysis and later director of Finance, Corning Cable Systems. He joined the Display Technologies division in 2005 as U.S. Controller. In 2007 he was appointed CFO, Corning Display Technologies Taiwan. In 2009 he was named director of Finance, Corning Display Technologies (“CDT”) and in 2010 was appointed division controller, CDT. Between 2012 and 2015, he served as international division vice president, Finance, Corning Glass Technologies. He was appointed as Corning’s Operations Controller in 2015 and senior vice president in 2019. Age 49.

Michael A. Bell  Senior Vice President & General Manager, Optical Communications

Mr. Bell joined Corning in 1991 as a process engineer for the Telecommunications Cable Plant in Hickory, North Carolina. He has held a variety of positions in manufacturing and engineering. He was appointed to CCS Americas Cable Manufacturing Manager in 2004, which expanded to include hardware manufacturing in 2009. In 2012 he was appointed senior vice president and general manager, Optical Connectivity Solutions for Corning Optical Communications. He was appointed senior vice president and general manager, Optical Communications in April 2020. Age 56

James P. Clappin  ExecutiveSecond VicePresident, Corning Glass Technologies Chairman and Strategic Advisor

Mr. Clappin joined Corning in 1980 as a process engineer.  He transitioned to GTE Corporation in 1983 when the Central Falls facility was sold and returned to Corning in 1988.  He began workingheld a variety of manufacturing management roles in the consumer products division, transferring to the display business in 1994.  Mr. Clappin relocated to Japan in 1996, as plant manager at Corning Display Technologies Shizuoka facility.  In 2002, heHe was appointed as general manager of CDT worldwide business.  He served asin 2002, and was president of Corning Display TechnologiesCDT from September 2005 through July 2010.  He was appointed president, Corning Precision Glass Technologies, in 2010.2010 and president Corning Glass Technologies in 2012.  In 2017 he became executive vice president of Corning Glass Technologies. He was appointed to his present positionas second vice chairman and strategic advisor in 2017.April 2020.  Age 60.63.

Martin J. Curran  Executive Vice President and Corning Innovation Officer

Mr. Curran joined Corning in 1984 and has held a variety of roles in finance, manufacturing, and marketing.  He has served as senior vice president, general manager for Corning Cable Systems Hardware and Equipment Operations in the Americas, responsible for operations in Hickory, North Carolina; Keller, Texas; Reynosa, Mexico; Shanghai, China; and the Dominican Republic.  He has also servedIn 2007, he was appointed as senior vice president and general manager forof Corning Optical Fiber.Mr. Curran was appointed as Corning’s firstexecutive vice president and innovation officer in August 2012.  Age 59.62.

Jeffrey W. Evenson  SeniorExecutive Vice President and Chief Strategy Officer

Dr. Evenson joined Corning in June 2011 as senior vice president and operations chief of staff.  In 2015, he was named Chief Strategy Officer.chief strategy officer.  He serves on the Management Committeewas appointed executive vice president in 2018. He oversees corporate strategy, corporate communications, and oversees a variety of strategic programs and growth initiatives.advanced analytics.  Prior to joining Corning, Dr. Evenson was a senior vice president with Sanford C. Bernstein, where he served as a senior analyst since 2004.analyst.  Before that, Dr. Evenson was a partner at McKinsey & Company, where he led technology and market assessment for early-stage technologies.   Age 52.55.

‎

Li Fang  President & General Manager, Corning Incorporated. All Rights ReservedGreater China

9

Avery H. Nelson III  Senior Vice President Human Resources& General Manager, Automotive

Ms. PambianchiMr. Nelson joined Corning in 20001991 as division human resourceshift supervisor at the Harrodsburg, Kentucky plant and subsequently served in progressive roles in Corning Display Technologies. In 2007, he joined CET as general manager, Corning Optical Fiber,(Shanghai) Company Limited. In 2009, he became general manager and laterregional director of China and India, CET. In 2010 he returned to the U.S. as program director, CET. In 2011, he assumed the role of business director, AAA Corning® Gorilla® Glass, New Business Development. Later that year, he was named director, Human Resources, Corning Optical Communications.  She has led the Human Resources function since January 2008 when she was namedappointed division vice president, Human Resources.  Ms. PambianchiHeavy Duty Diesel (HDD). In 2013, he was appointed division vice president and business director. In 2014, he was appointed vice president and general manager for Environmental Technologies. He was appointed to senior vice president, Human Resources,his current position in 2010, and is responsible for leading Corning’s global human resource function.April 2020. Age 49.52.

Edward A. Schlesinger  Senior Vice President and Corporate Controller

Mr. Schlesinger joined Corning in 2013 as senior vice president and chief financial officer of Corning Optical Communications.  He led the Finance function for Corning Optical Communications and served on the Communications Leadership Team.  He was namedelected vice president and corporate controller in September 2015 and appointed principal accounting officer in December 2015. He was named senior vice president in February 2019.  Prior to joining Corning, Mr. Schlesinger served as Vice President, Finance and Sector Chief Financial Officer for two ofthe Climate Solutions Sector for Ingersoll Rand’s business segments.Rand.  Mr. Schlesinger has a financial career that spans more than 20 years garnering extensive expertise in accounting, technical financial management and reporting.  Age 50.53.

Lewis A. Steverson  SeniorExecutive Vice President and General CounselChief Legal & Administrative Officer

Mr. Steverson joined Corning in June 2013 as senior vice president and general counsel.  In 2018 he was named executive vice president and general counsel. Prior to joining Corning, Mr. Steverson served as senior vice president, general counsel, and corporate secretary of Motorola Solutions, Inc.  During his 18 years with Motorola, he held a variety of legallaw leadership roles across the company’s numerous business units.  Prior to Motorola, Mr. Steverson was in private practice at the law firm of Arnold & Porter.  He was appointed Executive Vice President and Chief Legal & Administrative Officer in April 2020.  Age 54.  57.

R. Tony Tripeny  SeniorExecutive Vice President and Chief Financial Officer

Mr. Tripeny joined Corning Cable Systems in 1985 as the corporate accounting manager of Corning Cable Systems, and became the Keller, Texas facility’s plant controller in 1989.  In 1993, he was appointed equipment division controller of Corning Cable Systems and, in 1996, corporate controller.  Mr. Tripeny was appointed chief financial officer of Corning Cable Systems in July 2000.  In2000 and, in 2003, he took on the additional role of Telecommunications group controller.controller, Telecommunications.  He was appointed division vice president, operations controllerOperations Controller in August 2004, vice president, corporate controller in October 2005, and senior vice president and principal accounting officer in April 2009.  Mr. Tripeny was then appointed to his current position as Corning’s senior vice president and chief financial officer in September 2015.  He iswas appointed executive vice president in 2018.  Age 61.

Ronald L. Verkleeren  Senior Vice President & General Manager, Life Sciences

Mr. Verkleeren joined Corning in 2001 in the Optical Communications segment. He joined the Life Sciences segment in 2004 and has held a membervariety of progressive roles in that segment. In 2010, he was named division vice president and director of Advanced Life Sciences. In 2012 he was named division vice president and program director for Corning Pharmaceutical Technologies. In 2015, he became vice president and general manager of the board of directors of Hardinge, Inc.Pharmaceutical Technologies division. He was elected as senior vice president & general manager, Life Sciences in April 2020. Age 58.50.

Wendell P. Weeks  Chairman and Chief Executive Officer and President

Mr. Weeks joined Corning in 1983.1983 in the finance group.  He has held a variety of financial, business development, commercial, and general management roles.  He was named vice president and general manager of the Optical Fiber business in 1996 senior vice president in 1997, senior viceand president of Opto-Electronics in 1998, executive vice president in 1999, and president, CorningCorning’s Optical Communications division in 2001.  Mr. Weeks was namedHe became Corning’s president and chief operating officer of Corning in 2002, president and chief executiveoperation officer in 2005 and chairman and chief executive officer on April 26, 2007.  He added the title of president in December 2010.  Mr. Weeks is a director of Merck & Co. Inc. and Amazon.com, Inc.2002. Mr. Weeks has been a member of Corning’s Board of Directors since December 2000.  He was named chief executive officer in April 2005 and chairman of the board in April 2007.  Mr. Weeks is a director of Amazon.com, Inc.  Age 58.61.

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John Z. Zhang  Senior Vice President & General Manager, Display

Mr. Zhang joined Corning in 2008 as director, corporate development. In 2009, he was appointed director, corporate development Asia Pacific. In 2010, he further expanded his role to lead the strategy & corporate development organization of Corning International. In 2014, he was named deputy general manager, Corning Display Technologies. In 2015, he was elected as senior vice president and general manager, Corning Display Technologies. Age 48.

Document Availability

A copy of Corning’s 20172020 Annual Report on Form 10-K filed with the Securities and Exchange Commission is available upon written request to Corporate Secretary, Corning Incorporated, One Riverfront Plaza, Corning, NY 14831. The Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments pursuant to Section 13(a) or 15(d) of the Exchange Act of 1934 and other filings are available as soon as reasonably practicable after such material is electronically filed or furnished to the SEC, and can be accessed electronically free of charge at www.SEC.gov, or through the Investor Relations page on Corning’s website at www.corning.com. The information contained on the Company’s website is not included in, or incorporated by reference into, this Annual Report on Form 10-K.

Other

Additional information in response to Item 1 is found in Note 20 (Reportable Segments) to the Consolidated Financial Statements and in Item 6 (Selected Financial Data).consolidated financial statements. 

Item 1A. Risk Factors

We operate in rapidly changing economic, political, and technological environments that present numerous risks, many of which are driven by factors that we cannot control or predict.risks. Our operations and financial results are subject to various risks and uncertainties, including those described below, that could adversely affect our business, financial condition, results of operations, cash flows, our ability to successfully execute our strategy and capital allocation framework,Strategy & Growth Framework and the trading price of our common stock or debt. The following discussion of “risk factors” identifies the most significant factors that may adversely affect our business, operations, financial position or future financial performance. This information should be read in conjunction with our MD&A and the consolidated financial statements and related notes incorporated by reference into this report. The following discussion of risks is not all inclusive but is designed to highlight what we believe are important factors to consider, as these factors could cause our future results to differ from those in our forward-looking statements and from historical trends.

As a global company, we face many risks which couldRisks Related to Our Business

The ongoing COVID-19 pandemic has, and may continue to, adversely impact the global economy and disrupt our operations and reportedsupply chains, which may have an adverse effect on our results of operations.

COVID-19 has impacted and may further impact the global economy and could have additional impacts on economic growth, the proper functioning of financial results 

We are a global company and derive a substantial portioncapital markets, foreign currency exchange rates, and interest rates. The pandemic has resulted in authorities around the world implementing numerous unprecedented measures such as travel restrictions, quarantines, shelter in place orders, and facility shutdowns. These measures have impacted, and may continue to impact our workforce and operations, and those of our revenues from,customers, contract manufacturers and havesuppliers, particularly in the event of a significant operations, outsideglobal resurgence of the United States.  Our international operations include manufacturing, assembly, sales, researchillness. There is considerable uncertainty regarding the duration, scope and development, customer support,severity of the pandemic and shared administrative service centers.

Compliance with laws and regulations increases our costs.  We are subject to both U.S. laws and local laws which, among other things, include data privacy requirements, employment and labor laws, tax laws, anti-competition regulations, prohibitionsthe impacts on payments to governmental officials, import and trade restrictions and export requirements.  Non-compliance or violations could result in fines, criminal sanctions against us, our officers or our employees, and prohibitions on the conduct of our business.  Such violations could result in prohibitions on our ability to offer our products and services in one or more countries and could also materially damage our reputation, our brand, our international expansion efforts, our ability to attract and retain employees, our business and our operating results.  Our success depends, in part, on our ability to anticipatethe global economy from the effects of the ongoing pandemic and manage these risks.response measures.  

We are also subject to a variety of other risks in managing a global organization, including those related to:

Corning’s Display Technologies segment generates a significant amount of the Company’s profits and cash flow. Any significant decrease in LCDdisplay glass pricing or market share could have a material and negative impact on our financial results

Corning’s ability to generate profits and operating cash flow depends largely uponon the profitability of our LCDdisplay glass business, which is subject to continuous pricing pressure due to intense industry competition, potential over-capacity, and development of new technologies. If we are not able to achieve proportionate reductions in costs or sustain our current rate of cost reductionand increases in volume to offset potentialongoing pricing pressurespressure it could have a material adverse impact on our financial results.

Because we have a concentrated customer base in each of our businesses, our sales could be negatively impacted by the actions or insolvency of one or more key customers, as well as our ability to retain these customers

A relatively small number of end customers accounted for a high percentage of net sales in each of our reportable segments. This concentration subjects us to a variety of risks including:

Lower sales and cash flow that could result from the loss of one or more of our key customers;

Mergers and consolidations between customers could result in further concentration of Corning’s customer base.  If further concentration occursbase;

The loss or a key customer becomes insolvent, the lossinsolvency of a key customer, could result in a substantial loss of sales and reduction in anticipated cash flows; and

Customers may possess substantial leverage in cash flows.  Unforeseen events or actions on the part of Corning could also result in the loss of customers, resulting in further customer concentration.negotiating contractual obligations, including liability provisions.

The following table details the number of combined customers of our segments that accounted for a large percentage of segment net sales:

We may experience difficulties in enforcing our intellectual property rights, which could result in loss of market share, and we may be subject to claims of infringement of the intellectual property rights of others

We rely on patent and trade secret laws, copyright, trademark, confidentiality procedures, controls and contractual commitments to protect our intellectual property rights. Despite our efforts, these protections may be limited and we may encounter difficulties in protecting our intellectual property rights or obtaining rights to additional intellectual property necessary to permit us to continue or expand our businesses. We cannot provide assurance that the patents that we hold or may obtain will provide meaningful protection against our competitors. Changes in or enforcement of laws concerning intellectual property worldwide, may affect our ability to prevent or address the misappropriation of, or the unauthorized use of, our intellectual property, potentially resulting in loss of market share. Litigation may be necessary to enforce our intellectual property rights. Litigation is inherently uncertain and outcomes are often unpredictable. If we cannot protect our intellectual property rights against unauthorized copying or use, or other misappropriation, we may not remain competitive.

The intellectual property rights of others could inhibit our ability to introduce new products. Other companies hold patents on technologies used in our industries and are aggressively seeking to expand, enforce and license their patent portfolios. We periodically receive notices from, or have lawsuits filed against us by third parties claiming infringement, misappropriation or other misuse of their intellectual property rights and/or breach of our agreements with them. These third parties often include entities that do not have the capabilities to design, manufacture, or distribute products or that acquire intellectual property like patents for the sole purpose of monetizing their acquired intellectual property through asserting claims of infringement and misuse. Such claims of infringement or misappropriation may result in loss of revenue, substantial costs, or lead to monetary damages or injunctive relief against us.

Information technology dependency and cyber security vulnerabilities could lead to reduced revenue, liability claims, or competitive harm

The Company is dependent on information technology (“IT”) systems and infrastructure, forincluding cloud-based services (“IT systems”) to conduct its business and manufacturing controls.business. Our IT systems may be vulnerable to disruptions from human error, outdated applications, computer viruses, natural disasters, unauthorized access, cyber-attack and other similar disruptions. We have measures and defenses in place against such events, but we may not be able to prevent, immediately detect, or remediate all instances of such events. Any significant disruption, breakdown, intrusion, interruption or corruption of these systems or data breaches could cause the loss of data or intellectual property, equipment damage, downtime, and/or safety related issues and could have a material adverse effect on our business. Like other global companies, we have, from time to time, experienced incidents related to our IT systems, and expect that such incidents will continue, including malware and computer virus attacks, unauthorized access, systems failures and disruptions.  We have measures and defenses in place against unauthorized access, but we may not be able to prevent, immediately detect, or remediate such events.    A material security breach in the securityor disruption of our IT systems could include the theft of our intellectual property or trade secrets.  Such disruptions or security breaches could result in the theft, unauthorized use, or publication of our intellectual property and/or confidential business information, harm our competitive position, disrupt our manufacturing, reduce the value of our investment in research and development and other strategic initiatives, impair our ability to access vendors, suppliers and cloud-based services, or otherwise adversely affect our business.

Additionally, we believe that utilities and other operators of critical infrastructure that serve our facilities face heightened security risks, including cyber-attack. In the event of such an attack, disruption in service from our utility providers could disrupt our manufacturing operations which rely on a continuous source of power (electrical, gas, etc.).

We may not earn a positive return from our research, development and engineering investments

Developing our products through our innovation model of research and development is expensive and often involves a long investment cycle. We make significant expenditures and investments in research, and development and four process engineering platforms that may not earn an economic return. If our investments do not provide a pipeline of newproducts or technologies that our customers demand or lower costour manufacturing platforms,costs, it could negatively impact our revenuesrevenue and operating margins both near- and long-term.

If we are unable to obtain certain specialized equipment, raw and batch materials or natural resources required in our products or processes, our business will suffer

Our ability to meet customer demand depends, in part, on our ability to obtain timely and adequate delivery of equipment, parts, components and componentsraw materials from our suppliers. We may experience shortages that could adversely affect our operations. There can be no assurances that we will not encounter problems in the future.  Certain manufacturing equipment, components and componentsraw materials are available only from single or limited sources, and we may not be able to find alternate sources in a timely manner. A reduction, interruption or delay of supply, or a significant increase in the price for supplies, such as manufacturing equipment, precious metals, raw materials, utilities including energy and industrial water, could have a material adverse effect on our businesses.

We use specialized raw materials from single-source suppliers (e.g., specific mines or quarries) and natural resources (e.g., helium) in certain products and processes. If a supplier is unable to provide the required raw materials or the natural resource is in scarce supply or not readily available, we may be unable to change our product composition or manufacturing process in order to prevent a disruption to our business.

We have incurred, and may in the future incur, goodwill and other intangible asset impairment charges

At December 31, 2017, Corning had goodwill and other intangible assets of approximately  $2.6 billion.  While we believe the estimates and judgments about future cash flows used in the goodwill impairment tests are reasonable, we cannot provide assurance that additional impairment charges in the future will not be required if the expected cash flow estimates as projected by management do not occur, especially if an economic recession occurs and continues for a lengthy period or becomes severe, or if acquisitions and investments made by the Company fail to achieve expected returns.

Changes in our effective tax rate or tax liability may have an adverse effect on our results of operations

Our effective tax rate could be adversely impacted by several factors, including:

We may have additional tax liabilities

We are subject to income taxes in the U.S. and many foreign jurisdictions and are commonly audited by various tax authorities.  In the ordinary course of our business, there are many transactions and calculations where the ultimate tax determination is uncertain.  Significant judgment is required in determining our worldwide provision for income taxes.  Although we believe our tax estimates are reasonable, the final determination of tax audits and any related litigation could be materially different from our historical income tax provisions and accruals.  The results of an audit or litigation could have a material effect on our financial statements in the period or periods for which that determination is made.

The recent 2017 Tax Act could significantly impact how U.S. global corporations are taxed.  We are in the process of evaluating the impact of this new legislation and certain changes could have a material adverse impact on our tax expense and cash flow.  Among other things, the 2017 Tax Act requires companies to pay a one-time mandatory tax on unrepatriated earnings of certain foreign subsidiaries that were previously tax deferred (the “toll charge”) and creates new taxes on certain foreign sourced earnings.  The toll charge resulted in an additional $1.1 billion provisional tax expense.  However, settlement of the toll charge will occur almost entirely through the use of existing foreign tax credit carryovers of $1.1 billion.

Our innovation model depends on our ability to attract and retain specialized experts in our core technologies

Our innovation model requires us to employ highly specialized experts in glass science, ceramic science, and optical physics to conduct our research and development and engineer our products and design our manufacturing facilities. The loss of the services of any member of our key research and development or engineering team without adequate replacement, or the inability to attract new qualified personnel, could have a material adverse effect on our operations and financial performance.

We are subject to strict environmental regulations and regulatory changes that could result in fines or restrictions that interrupt our operations

Some of our manufacturing processes generate chemical waste, waste water, other industrial waste or greenhouse gases, and we are subject to numerous laws and regulations relating to the use, storage, discharge and disposal of such substances. We have installed anti-pollution equipment for the treatment of chemical waste and waste water at our facilities. We have taken steps to control the amount of greenhouse gases created by our manufacturing operations. However, we cannot provide assurance that environmental claims will not be brought against us or that government regulators will not take steps to adopt more stringent environmental standards.

Any failure on our part to comply with any present or future environmental regulations could result in the assessment of damages or imposition of fines against us, or the suspension/cessation of production or operations. In addition, environmental regulations could require us to acquire costly equipment, incur other significant compliance expenses or limit or restrict production or operations and thus materially and negatively affect our financial condition and results of operations.

Changes in regulations and the regulatory environment in the U.S. and other countries, such as those resulting from the regulation and impact of global warming and CO₂ abatement, may affect our businesses and their results in adverse ways by, among other things, substantially increasing manufacturing costs, limiting availability of scarce resources, especially energy, or requiring limitations on production and sale of our products or those of our customers.

General Risk Factors

We may have additional tax liabilities

We are subject to income taxes in the U.S. and many foreign jurisdictions, and are commonly audited by various tax authorities.  There are many transactions and calculations where the ultimate tax treatment is uncertain.  Judgment is required in determining our worldwide provision for income taxes.  Although we believe our tax estimates are reasonable, the final determination of tax audits and any related litigation could be materially different from our historical income tax provisions and accruals.  The results of an audit or litigation could have a material effect on our financial statements in the period or periods for which that determination is made.

The 2017 Tax Act significantly impacted how U.S. global corporations are taxed. Significant guidance has been issued with the intention of clarifying the new tax provisions. To date, some of the regulations had been finalized and clarified but a considerable amount of this guidance is still in the form of proposed regulations. Due to the volume and complexity of both the final and proposed regulations, we continue to evaluate any development and impact of the 2017 Tax Act that could have a material adverse impact on our tax expense and cash flow. In addition to the 2017 Tax Act, other foreign countries and international organizations, such as Organisation for Economic Co-operation and Development (“OECD”), may have law changes and issue new international tax standards that may also impact our taxes.

As a global company, we face many risks which could adversely impact our operations and financial results

We are a global company and derive a substantial portion of our revenue from, and have significant operations, outside of the United States. Our international operations include manufacturing, assembly, sales, research and development, customer support, and shared administrative service centers. Additionally, we rely on a global supply chain for key components and capabilities that are central to our ability to invent, make and sell products.

Compliance with laws and regulations increases our costs. We are subject to both U.S. laws and the local laws where we operate which, among other things, include data privacy requirements, employment and labor laws, tax laws, anti-competition regulations, prohibitions on payments to governmental officials, import and trade restrictions and export requirements. Non-compliance or violations could result in fines, criminal sanctions against us, our officers or employees, and prohibitions on the conduct of our business. Such violations could result in prohibitions on our ability to offer our products and services in one or more countries and could also materially damage our reputation, our brand, our international expansion efforts, our ability to attract and retain employees, our business and operating results. Our success depends, in part, on our ability to anticipate and manage these risks.

We are also subject to a variety of other risks in managing a global organization, including those related to:

The economic and political conditions in each country or region and among countries;

Complex regulatory requirements affecting international trade and investment, including anti-dumping laws, export controls, the Foreign Corrupt Practices Act and local laws prohibiting improper payments. Our operations may be adversely affected by changes in the substance or enforcement of these regulatory requirements, and by actual or alleged violations of them;

Fluctuations in currency exchange rates, convertibility of currencies and restrictions involving the movement of funds between jurisdictions and countries;

Governmental protectionist policies and sovereign and political risks that may adversely affect Corning’s profitability and assets;

Tariffs, trade duties and other trade barriers including anti-dumping duties;

Geographical concentration of our factories and operations, and regional shifts in our customer base;

Periodic health epidemic concerns;

Political unrest, confiscation or expropriation of assets by foreign governments, terrorism and the potential for other hostilities;

Difficulty in protecting intellectual property, sensitive commercial and operations data, and information technology systems;

Differing legal systems, including protection and treatment of intellectual property and patents;

Complex, changing or competing tax regimes;

Difficulty in collecting obligations owed to us;

Natural disasters such as floods, earthquakes, tsunamis and windstorms; and

Potential loss of utilities or other disruption affecting manufacturing.

We have significant exposure to foreign currency movements

A large portion of our sales, profit and cash flows are transacted in non-U.S. dollar currencies. The Company expects to continue to experience fluctuations in the U.S. dollar value of these activities if it is not possible, cost-effective or should we not elect to hedge certain currency exposure.  Additionally, gains or losses may be experienced if the underlying exposure which has been hedged increases or decreases significantly.

The ultimate realized loss or gain with respect to currency fluctuations will generally depend on the size and type of cross-currency exposure that we have, the changes in exchange rates associated with those exposures, whether we have entered into foreign currency contracts to offset these exposures and other factors. 

Foreign currency movements may impact our competitive cost position relative to our largest, Japan-based competitors in the Display Technologies segment.  The profitability of customers may also be impacted as they typically purchase from us in Japanese yen and sell in various currencies.

These factors, which are variable and generally outside of our control, could materially impact our results of operations, anticipated future results, financial position and cash flows.

We may have significant exposure to counterparties of our related derivatives portfolio

We maintain a significant portfolio of over the counter derivatives to hedge our projected currency and periodically may utilize interest rate derivatives, equity derivatives, and commodities. We are exposed to potential losses in the event of non-performance by our counterparties to these derivative contracts. Any failure of a counterparty to pay on such a contract when due could materially impact our results of operations, financial position, and cash flows.

Current or future litigation or regulatory investigations may harm our financial condition or results of operations

As a global technology and manufacturing company, we are engaged in various litigation and regulatory matters. Litigation and regulatory proceedings may be uncertain, and adverse rulings could occur, resulting in significant liabilities, penalties or damages. Such current or futureAny such substantial legal liabilitiesliability or regulatory actionsaction could have a material adverse effect on our business, financial condition, cash flows and reputation.

Our global operations are subject to extensive trade and anti-corruption laws and regulations

Due to the international scope of our operations, we are subject to a complex system of import- and export-related laws and regulations, including U.S. regulations issued by Customs and Border Protection, the Bureau of Industry and Security, the Office of Anti-boycott Compliance, the Directorate of Defense Trade Controls and the Office of Foreign Assets Control, as well as the counterparts of these agencies in other countries. Any alleged or actual violation by an employee or the Company may subject us to government scrutiny, investigation and civil and criminal penalties, and may limit our ability to import or export our products or to provide services outside the United States. We cannot predict the nature, scope or effect of future regulatory requirements to which our operations might be subject or the manner in whichway existing laws might be administered or interpreted.

In addition, the U.S. Foreign Corrupt Practices Act and similar foreign anti-corruption laws generally prohibit companies and their intermediaries from making improper payments or providing anything of value to improperly influence foreign government officials for the purpose of obtainingto obtain or retainingretain business, or obtaining an unfair advantage. Recent years have seen a substantial increase in the global enforcement of anti-corruption laws. Our continued operation and expansion outside the United States, including in developing countries, could increase the risk of alleged violations. Violations of these laws may result in severe criminal or civil sanctions, could disrupt our business, and result in an adverse effect on our reputation, business and results of operations or financial condition.

Moreover, several of our related partnerskey customers are domiciled in areas of the world with laws, rules and business practices that may notably differ from those in the United States, and we face the reputational and legal risk that our related partners may violate applicable laws, rules and business practices.

International trade policies may negatively impact our ability to sell and manufacture our products outside of the U.S.

Government policies on international trade and investment such as import quotas, tariffs, and capital controls, whether adopted by individual governments or addressed by regional trade blocs, can affect the demand for our products and services, impact the competitive position of our products or prevent us, (including our equity affiliates/affiliates or joint ventures)ventures, from being able to sell and/orand manufacture products in certain countries. The implementation of more restrictive trade policies, such as higher tariffs or new barriers to entry, in countries in which we sell large quantities of products and services could negatively impact our business, results of operations and financial condition. For example, a government’s adoption of “buy national” policies or retaliation by another government against such policies could have a negative impact on our results of operations.  These policies also affect our equity companies.    

Item 1B. Unresolved Staff Comments

None.

Item 2. Properties

Corning operates 105122 manufacturing plants and processing facilities in 15 countries, of which approximately 33%32% are located in the U.S. We own 68%approximately 60% of our executive and corporate buildings, of which 77% arewith 95% located in and around Corning, New York. The Company also owns over 65%approximately 69% of our sales and administrative office square footage, 88%83% of our research and development square footage, 74%66% of our manufacturing square footage, and over 13%8% of our warehousing square footage.

For the years ended 2017,  20162020 and 2015,2019, we invested a total of $4.2$3.4 billion, primarily in facilities outside of the U.S. in our Display Technologies segment. United States.

Manufacturing, sales and administrative, and research and development facilities have an aggregate floor space of approximately 39.564.9 million square feet. Distribution of this total area is as follows:

Environmental Litigation

Environmental Litigation.

Corning has been named by the Environmental Protection Agency (the Agency) under the Superfund Act, or by state governments under similar state laws, as a potentially responsible party for 15 active hazardous waste sites. Under the Superfund Act, all parties who may have contributed any waste to a hazardous waste site, identified by the Agency, are jointly and severally liable for the cost of cleanup unless the Agency agrees otherwise. It is Corning’s policy to accrue for its estimated liability related to Superfund sites and other environmental liabilities related to property owned by Corning based on expert analysis and continual monitoring by both internal and external consultants. At December 31, 20172020 and December 31, 2016,2019, Corning had accrued approximately $38$68 million (undiscounted) and $43$41 million (undiscounted), respectively, for the estimated 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 and that the risk of an additional loss in an amount materially higher than that accrued is remote.

Item 4. Mine Safety Disclosure

None.
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PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

The following table sets forth the high and low sales price of Corning’s common stock as reported on the New York Stock Exchange Composite Tape.Exchange. In addition, it is traded on the Boston, Midwest and Philadelphia stock exchanges. Common stock options are traded on the Chicago Board Options Exchange. The ticker symbol for Corning Incorporated is “GLW”.

As of December 31, 2017,2020, there were approximately 15,20512,090 registered holders of common stock and approximately 474,059515,000 beneficial shareholders.

On February 3, 2016, Corning’s Board of Directors declared a 12.5% increase in the Company’s quarterly common stock dividend, which increased the quarterly dividend from $0.12 to $0.135 per share of common stock, beginning with the dividend paid in the first quarter of 2016. 

On February 1, 2017, Corning’s Board of Directors declared a 14.8% increase in the Company’s quarterly common stock dividend, which increased the quarterly dividend from $0.135 to $0.155 per share of common stock, beginning with the dividend paid in the first quarter of 2017. 

On February 6, 2018, Corning’s Board of Directors declared a 16.1% increase in the Company’s quarterly common stock dividend, which increased the quarterly dividend from $0.155 to $0.18 per share of common stock, beginning with the dividend paid in the first quarter of 2018.  This increase marks the seventh dividend increase since October 2011.    

Performance Graph

The following graph illustrates the cumulative total shareholder return over the last five years of Corning's common stock, the S&P 500 and the S&P Communications Equipment Companies. The graph includes the capital weighted performancecapital-weighted-performance results of those companies in the communications equipment company classification that are also included in the S&P 500.

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

For discussion of 2019 results year-over-year comparison with 2018 results refer to "Management's Discussion and Analysis of Financial Conditions and Results of Operations" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019.

Organization of Information

Management’s Discussion and Analysis provides a historical and prospective narrative on the Company’s financial condition and results of operations. This discussion includes the following sections:

OVERVIEWOverview

Results of Operations

Core Performance Measures

Reportable Segments

Liquidity and Capital Resources

Environment

Critical Accounting Estimates

New Accounting Standards

Forward-Looking Statements

OVERVIEW

In response to the COVID-19 pandemic and the ensuing economic uncertainty, including changing market conditions, the Company has and will continue to focus on three core priorities: preserving the financial health of the Company; protecting employees and communities; and delivering on customer commitments.

Strategy & Growth Framework

In 2019, we successfully completed our 2016 - 2019 Strategy and Capital Allocation Framework

In October 2015, Corning announced a strategy and capital allocation framework (the “Framework”) that reflects the Company’s financial and operational strengths, as well as its ongoing commitment to increasing shareholder value.  The Framework outlines our leadership priorities, and articulates the opportunities we see across our businesses.  We designed the Framework to create significant value for shareholders by focusing our portfolio and leveraging our financial strength.Framework. Under the Framework, we target generating $26 billion to $30 billion of cash through 2019, returning more than $12.5 billion to shareholdersoutlined and investing $10 billion to extend our leadership positions and deliver growth.

Ourdemonstrated how Corning’s probability of success increases as we invest in our world-class capabilities. Corning is concentratingWe concentrate approximately 80% of itsour research, development and engineering investment andalong with capital spending on a cohesive set of three core technologies, four manufacturing and engineering platforms, and five market-access platforms.Market-Access Platforms. This strategy will allowallows us to quickly apply our talents and repurpose our assets across the company, as needed.needed, to capture high-return opportunities.

Performance againstBuilding on the Framework

Since introducingsuccess of the 2016 - 2019 Framework, we have distributed $9 billionannounced our 2020 - 2023 Strategy & Growth Framework, highlighting significant opportunities to shareholderssell more Corning content through share repurchases and dividends, and increased the annual dividend by 16.1% in 2018, 14.8% in 2017 and 12.5% in 2016 as parteach of our ongoing commitmentMarket-Access Platforms. Under this new Framework, our leadership priorities and our fundamental approach to returncapital allocation remain the same. We continue to focus our portfolio and utilize our financial strength. We expect to generate strong operating cash flow as we move forward. We will continue to use our cash to grow, extend our investors.leadership, and reward shareholders.

While 2020, brought unprecedented challenges to our end markets and operations, driven by the COVID-19 pandemic, economic uncertainty, and social unrest, Corning adapted rapidly and remained resilient. We also utilized ourexecuted well to preserve financial strength, while advancing major innovations with industry leaders. We effectively applied our focused and cohesive portfolio to create value and outperform our underlying markets, contributing to growth in 2017 to continue our focus on innovation, advancing key programs across our market platforms.  Somethe second half of our achievements in 2017 included:this year.

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20172020 Results

Net sales in the year ended December 31, 20172020 were $10,116 million, an increase$11.3 billion, a net decrease of $726$200 million, or 8%2%, when compared to the year ended December 31, 2016.  The increase was2019, driven by lower sales in the Display Technologies, Optical Communications, and the Specialty Materials segments, up $540 million and $279 million, respectively.  The Environmental Technologies and Life Sciences segments also increased, up $74 million and $40 million, respectively.  A decline in net sales of $241 million in the Display Technologies segment partially offset these increases, driven by price declines of approximately 10%higher sales the Specialty Materials segment and “All Other”.

For the year ended December 31, 2017,2020, we generated a  net lossincome of $497$512 million, or $(0.66)$0.54 per share, compared to a net income of $3,695$960 million, or $3.23$1.07 per share, for 2016.2019. When compared to last year,2019, the $4.2 billion$448 million decrease in net income was primarily due to the following items (amounts presented after tax):

The negative impact of mark-to-market translated earnings contract losses of $226 million;

Higher costs of $170 million for an asset impairment loss related to investments in research and development programs within “All Other”;

Higher costs for litigation and environmental reserves of $133 million;

Higher expenses of $117 million, primarily driven by severance costs for the Display Technologies segment;

The negative impact of a cumulative adjustment recorded during the first quarter of 2020 to reduce revenue in the amount of $105 million.  The adjustment was associated with a previously recorded commercial benefit asset, reflected as a prepayment, to a customer with a long-term supply agreement that is exiting its production of LCD panels; and

Lower segment net income of $73 million mainly driven by lower volumes in the first half of 2020.

Partially offsetting these events were the following items:

Gain on a previously held equity investment in HSG of $387 million; and

An $83 million gain recognized from the initial public offering of an investment in the fourth quarter of 2020.

Diluted earnings per share decreased in 2020 by $0.53 per share, or 50%, when compared to 2019, primarily driven by the decrease in net income described above. The impact of share repurchases did not materially impact the change in diluted earnings per share.

The translation impact of fluctuations in foreign currency exchange rates, including the impact of hedges realized in 2017, did not materially impactthe current year, positively impacted Corning’s consolidated net income by approximately $51 million in the year ended December 30, 201731, 2020, when compared to the year ended December 31, 2016.same period in 2019.

20182021 Corporate Outlook

We believe 20182021 will be anothera year of strong growth and investment, consistent with our Strategy and Capital Allocation Framework, and anticipate that core saleswe will grow to approximately $11 billion.  In our Display Technologies segment, we expect pricing to continue to improve, with year-over-year declines reaching mid-single digits, an important milestone toward our goal of stabilizing returns.  We anticipate Corning’s LCD glass volume will grow faster than the expected LCD glass market growth of mid-single digits, driven by television screen size growthfocus on operational excellence, cash-flow generation and the ramp of our Gen 10.5 facility in China.  In the Optical Communications segment, we expect sales to increase by about 10%, excluding any contribution from the pending acquisition of 3M’s Communications Market Division, driven by strong demand from carrier and enterprise network customers.prudent capital allocation. We expect high-single digityear-over-year sales growth in our Environmental Technologies segment, driven by continued strength in automotive product sales, on-going improvementsto accelerate in the heavy-duty diesel market and from the commercial launchfirst quarter of gas-particulate filters.  We expect growth in the Specialty Materials segment, the rate2021, with approximately $3.0 - $3.2 billion of which will depend on new model launches and the adoption of our innovations, and anticipate mid-single digit growth in the Life Sciences segment.net sales.

RESULTS OF OPERATIONS

Selected highlights from our operations follow (in millions):