Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | Apr. 13, 2018 | |
Document And Entity Information | ||
Entity Registrant Name | CORNING INC /NY | |
Entity Central Index Key | 24,741 | |
Trading Symbol | glw | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 830,348,853 |
Consolidated Statements of (Los
Consolidated Statements of (Loss) Income - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Consolidated Statements of (Loss) Income [Abstract] | ||
Net sales | $ 2,500 | $ 2,375 |
Cost of sales | 1,545 | 1,424 |
Gross margin | 955 | 951 |
Operating expenses: | ||
Selling, general and administrative expenses | 501 | 319 |
Research, development and engineering expenses | 241 | 202 |
Amortization of purchased intangibles | 19 | 17 |
Operating income | 194 | 413 |
Equity in earnings of affiliated companies | 39 | 80 |
Interest income | 13 | 12 |
Interest expense | (52) | (37) |
Translated earnings contract loss, net | (622) | (438) |
Other expense, net | (37) | (10) |
(Loss) income before income taxes | (465) | 20 |
(Provision) benefit for income taxes (Note 5) | (124) | 66 |
Net (loss) income attributable to Corning Incorporated | $ (589) | $ 86 |
(Loss) earnings per common share attributable to Corning Incorporated: | ||
Basic (Note 6) | $ (0.72) | $ 0.07 |
Diluted (Note 6) | (0.72) | 0.07 |
Dividends declared per common share | $ 0.18 | $ 0.155 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Consolidated Statements of Comprehensive Income [Abstract] | ||
Net (loss) income attributable to Corning Incorporated | $ (589) | $ 86 |
Foreign currency translation adjustments and other | 264 | 450 |
Net unrealized gains on investments | 3 | |
Unamortized gains (losses) and prior service credits for postretirement benefit plans | 1 | 1 |
Net unrealized gains on designated hedges | 26 | |
Other comprehensive income, net of tax (Note 13) | 265 | 480 |
Comprehensive (loss) income attributable to Corning Incorporated | $ (324) | $ 566 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 3,096 | $ 4,317 |
Trade accounts receivable, net of doubtful accounts and allowances - $61 and $60 | 1,747 | 1,807 |
Inventories, net of inventory reserves - $161 and $169 (Note 7) | 1,834 | 1,712 |
Other current assets | 986 | 991 |
Total current assets | 7,663 | 8,827 |
Investments | 345 | 340 |
Property, plant and equipment, net of accumulated depreciation - $11,265 and $10,809 | 14,416 | 14,017 |
Goodwill, net (Note 8) | 1,698 | 1,694 |
Other intangible assets, net (Note 8) | 851 | 869 |
Deferred income taxes (Note 5) | 909 | 813 |
Other assets | 952 | 934 |
Total Assets | 26,834 | 27,494 |
Current liabilities: | ||
Current portion of long-term debt and short-term borrowings | 380 | 379 |
Accounts payable | 1,164 | 1,439 |
Other accrued liabilities (Note 3 and Note 10) | 1,451 | 1,391 |
Total current liabilities | 2,995 | 3,209 |
Long-term debt (Note 4) | 4,808 | 4,749 |
Postretirement benefits other than pensions (Note 9) | 746 | 749 |
Other liabilities (Note 3 and Note 10) | 3,797 | 3,017 |
Total liabilities | 12,346 | 11,724 |
Commitments, contingencies and guarantees (Note 3) | ||
Shareholders’ equity (Note 13): | ||
Convertible preferred stock, Series A – Par value $100 per share; Shares authorized 3,100; Shares issued: 2,300 | 2,300 | 2,300 |
Common stock – Par value $0.50 per share; Shares authorized 3.8 billion; Shares issued: 1,709 million and 1,708 million | 854 | 854 |
Additional paid-in capital – common stock | 14,119 | 14,089 |
Retained earnings | 15,166 | 15,930 |
Treasury stock, at cost; Shares held: 877 million and 850 million | (17,449) | (16,633) |
Accumulated other comprehensive loss | (577) | (842) |
Total Corning Incorporated shareholders’ equity | 14,413 | 15,698 |
Noncontrolling interests | 75 | 72 |
Total equity | 14,488 | 15,770 |
Total Liabilities and Equity | $ 26,834 | $ 27,494 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Consolidated Balance Sheets [Abstract] | ||
Doubtful accounts and allowances | $ 61 | $ 60 |
Inventory reserves | 161 | 169 |
Accumulated depreciation | $ 11,265 | $ 10,809 |
Convertible preferred stock, par value (in dollars per share) | $ 100 | $ 100 |
Convertible preferred stock, shares authorized (in shares) | 3,100 | 3,100 |
Convertible preferred stock, shares issued (in shares) | 2,300 | 2,300 |
Common stock, par value (in dollars per share) | $ 0.50 | $ 0.50 |
Common stock, shares authorized (in shares) | 3,800,000,000 | 3,800,000,000 |
Common stock, shares issued (in shares) | 1,709,000,000 | 1,708,000,000 |
Treasury stock, shares held (in shares) | 877,000,000 | 850,000,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Cash Flows from Operating Activities: | ||
Net (loss) income | $ (589) | $ 86 |
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | ||
Depreciation | 304 | 260 |
Amortization of purchased intangibles | 19 | 17 |
Equity in earnings of affiliated companies | (39) | (80) |
Dividends received from affiliated companies | 34 | |
Deferred tax provision (benefit) | 16 | (121) |
Customer incentives and deposits | 276 | |
Translated earnings contract loss | 622 | 438 |
Unrealized translation gains on transactions | (63) | (67) |
Changes in certain working capital items: | ||
Trade accounts receivable | 94 | (54) |
Inventories | (98) | (49) |
Other current assets | (92) | (60) |
Accounts payable and other current liabilities | (162) | (230) |
Other, net | 32 | 17 |
Net cash provided by operating activities | 320 | 191 |
Cash Flows from Investing Activities: | ||
Capital expenditures | (655) | (364) |
Acquisitions of businesses, net of cash received | (35) | |
Realized gains on translated earnings contracts | 13 | 80 |
Other, net | (2) | (7) |
Net cash used in investing activities | (644) | (326) |
Cash Flows from Financing Activities: | ||
Principal payments under capital lease obligations | (1) | |
Payments of employee withholding tax on stock awards | (2) | (2) |
Proceeds from the exercise of stock options | 21 | 182 |
Repurchases of common stock for treasury | (800) | (400) |
Dividends paid | (177) | (168) |
Net cash used in financing activities | (959) | (388) |
Effect of exchange rates on cash | 62 | 76 |
Net decrease in cash and cash equivalents | (1,221) | (447) |
Cash and cash equivalents at beginning of year | 4,317 | 5,291 |
Cash and cash equivalents at end of year | $ 3,096 | $ 4,844 |
Significant Accounting Policies
Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2018 | |
Significant Accounting Policies [Abstract] | |
Significant Accounting Policies | 1. Significant Accounting Policies Basis of Presentation In these notes, the terms “Corning,” “Company,” “we,” “us,” or “our” mean Corning Incorporated and its subsidiary companies. The accompanying unaudited consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”) for interim financial information. Certain information and note disclosures normally included in financial statements prepared in accordance with GAAP have been omitted or condensed. These interim consolidated financial statements should be read in conjunction with Corning’s consolidated financial statements and notes thereto included in its Annual Report on Form 10-K for the year ended December 31, 2017 (“ 2017 Form 10-K”). The unaudited consolidated financial statements reflect all adjustments which, in the opinion of management, are necessary for a fair statement of the results of operations, financial position and cash flows for the interim periods presented. All such adjustments are of a normal recurring nature. The results for interim periods are not necessarily indicative of results which may be expected for any other interim period or for the full year. On January 1, 2018, we adopted Accounting Standards Update (“ASU”) No. 2014-09 ASC (Topic 606), Revenue from Contracts with Customers, and applied the modified retrospective method of accounting to those contracts which were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting under ASC Topic 605 “Revenue Recognition”. Because the impact of adopting the standard on Corning’s financial statements was immaterial, we have not made an adjustment to opening retained earnings. One of Corning’s equity affiliates is currently assessing the potential impact of adopting ASU 2014-09 on its financial statements and will adopt the standard on January 1, 2019. Preliminary analysis indicates that the impact of adoption will not have a material impact on Corning’s financial statements. On January 1, 2018, Corning adopted ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, which refines the classification of certain aspects of the cash flow statement in regards to debt prepayment, settlement of debt instruments, contingent consideration payments, proceeds from insurance claims and life insurance policies, distribution from equity method investees, beneficial interests in securitization transactions and separately identifiable cash flows. The impact of adopting the standard on Corning’s financial statements was not material. On January 1, 2018, we adopted ASU No. 2017-07, Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. The service cost component of net periodic pension and postretirement benefit cost is presented with other current compensation costs in operating income. The remaining components are included in the line item Other expense, net, in the consolidated statements of (loss) income. Corning has applied the practical expedient which permits it to use the amounts disclosed in its pension and other postretirement benefit plan note for the prior comparative periods as the estimation basis for applying the retrospective presentation requirements . The impact of adopting the standard on Corning’s financial statements was not material. Certain prior year amounts have been reclassified to conform to the current-year presentation. These reclassifications had no impact on our results of operations, financial position, or changes in shareholders’ equity. New Accounting Standards In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which supersedes all existing guidance on accounting for leases in ASC Topic 840. ASU 2016-02 will continue to classify leases as either finance or operating, with classification affecting the pattern of expense recognition in the statement of income. This standard will be effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. ASU 2016-02 is required to be applied with a modified retrospective approach to each prior reporting period presented with various optional practical expedients. We are currently assessing the potential impact of adopting this standard on our financial statements and related disclosures. One of Corning’s equity affiliates is currently assessing the potential impact of adopting this standard on its financial statements and elected to adopt the standard on January 1, 2020. In February 2018, the FASB issued ASU 2018-02, Income Statement - Reporting Comprehensive Income, which allows for reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act. ASU 2018-02 is effective for annual reporting periods beginning after December 15, 2018, and interim periods within those annual periods. Early adoption is permitted. We are currently assessing the potential impact of adopting ASU 2018-02 on our financial statements . |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2018 | |
Revenue [Abstract] | |
Revenue | 2. Revenue On January 1, 2018, we adopted ASC Topic 606 “Revenue from Contracts with Customer”, and all related amendments, using the modified retrospective method applied to those contracts which were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting under ASC Topic 605 “Revenue Recognition”. We have determined that the impact of transition to the new standard is immaterial to our revenue recognition model since the vast majority of our recognition is based on point in time transfer of control. Accordingly, we have not made any adjustment to opening retained earnings. Product Revenue (Point in Time) The majority of our revenues are generated by delivery of products to our customers and recognized at a point in time based on our evaluation of when the customer obtains control of the products. Revenue is recognized when all performance obligations under the terms of a contract with our customer are satisfied, and control of the product has been transferred to the customer. If customer acceptance clauses are present and it cannot be objectively determined that control has been transferred, revenue is only recorded when customer acceptance is received and all performance obligations have been satisfied. Sales of goods typically do not include multiple product and/or service elements. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods or providing services. Sales tax, value-added tax, and other taxes we collect concurrent with revenue-producing activities are excluded from revenue. Incidental contract costs that are not material in the context of the delivery of goods and services are recognized as expense. At the time revenue is recognized, allowances are recorded, with the related reduction to revenue, for estimated product returns, allowances and price discounts based upon historical experience and related terms of customer arrangements. Where we have offered product warranties, we also establish liabilities for estimated warranty costs based upon historical experience and specific warranty provisions. Warranty liabilities are adjusted when experience indicates the expected outcome will differ from initial estimates of the liability. Product warranty liabilities are not material at March 31, 2018 and December 31, 2017. Other Revenue (Over Time) Corning’s over time revenues are mainly related to Telecommunications products, and are comprised of design, install, training and software maintenance services. The performance obligations under these contracts generally require services to be performed over time, resulting in either a straight-line amortization method or an input method using incurred and forecasted expense to predict revenue recognition patterns which follows satisfaction of the performance obligation. Corning’s other revenue is inconsequential to our results. Revenue Disaggregation Table The following table shows revenues by major product categories, similar to our reportable segment disclosure. Within each product category, contract terms, conditions and economic factors affecting the nature, amount, timing and uncertainty around revenue recognition and cash flows are substantially similar. The commercial markets and selling channels are also similar. With the exception of an inconsequential amount of Telecommunications products, our product category revenues are recognized at point in time when control transfers to the customer. Prior year amounts are presented under the ASC 605 basis of revenue recognition. Three Months Ended March 31, Revenues by Product Category 2018 2017 Display products $ 732 $ 736 Telecommunication products 886 818 Specialty glass products 278 300 Environmental substrate and filter products 322 275 Life science products 232 210 All Other 50 36 $ 2,500 $ 2,375 Contract Assets and Liabilities Contract assets, such as costs to obtain or fulfill contracts, are an insignificant component of Corning’s revenue recognition process. The majority of Corning’s cost of fulfillment as a manufacturer of products is classified as inventory, fixed assets and intangible assets, which are accounted for under the respective guidance for those asset types. Other costs of contract fulfillment are immaterial due to the nature of our products and their respective manufacturing processes. Contract liabilities include deferred revenues, other advanced payments and customer deposits. Deferred revenue and other advanced payments are not significant to our operations and are classified as part of other current liabilities in our financial statements. Customer deposits are predominately related to Display products and are classified as part of other current liabilities and other long term liabilities as appropriate, and are disclosed below. Customer Deposits As of March 31, 2018 , Corning has customer deposits of $682 million, of which $276 million was received in the first quarter of 2018. These represent non-refundable cash deposits for customers to secure rights to an amount of glass produced by Corning unde r long- term supply agreements. The duration of these lo ng term supply agreements range up to ten years. As glass is shipped to customers, Corning will recognize revenue and issue credit memoranda to reduce the amount of the customer deposit liability, which are applied against customer receivables resulting from the sale of glass. In 2018, 2017 and 2016, no credit memoranda were issued. Practical Expedients and Exemptions We do not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed. We treat shipping and handling fees as a fulfillment cost and not as a separate performance obligation under the terms of our revenue contracts due to the perfunctory nature of the shipping and handling obligations. |
Commitments, Contingencies and
Commitments, Contingencies and Guarantees | 3 Months Ended |
Mar. 31, 2018 | |
Commitments, Contingencies and Guarantees [Abstract] | |
Commitments, Contingencies and Guarantees | 3. Commitments, Contingencies and Guarantees Asbestos Claims 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. At December 31, 2016, this estimated liability was $ 290 million, due to the Company’s contribution, in the second quarter of 2016, of its equity interests in PCC and Pittsburgh Corning Europe N.V. (“PCE”) in the total amount of $238 million, as required by the Plan. A payment of $70 million was made in June 2017. At March 31, 201 8 , the total amount of payments due in years 2018 through 2022 is $220 million. A $35 million payment is due in the second quarter of 2018 and is classified as a current liability. The remaining $ 185 million is classified as a non-current liability. Non-PCC Asbestos Claims Insurance Litigation Corning is a defendant in certain cases alleging injuries from asbestos unrelated to PCC (the “non-PCC asbestos claims”) which had been stayed pending the confirmation of the Plan. The stay was lifted on August 25, 2016. Corning previously established a $150 million reserve for these non-PCC asbestos claims. The estimated reserve represents the undiscounted projection of claims and related legal fees over the next 20 years. The amount may need to be adjusted in future periods as more data becomes available; however, we cannot estimate any lesser or greater liabilities at this time. At March 31, 2018 and December 31, 2017, the amount of the reserve for these non-PCC asbestos claims was $14 7 million. Several of Corning’s insurers have commenced litigation in state courts for a declaration of the rights and obligations of the parties under insurance policies related to Corning’s asbestos claims. Corning has resolved these issues with a majority of its relevant insurers, and is vigorously contesting these cases with the remaining relevant insurers. Management is unable to predict the outcome of the litigation with these remaining insurers. Dow Corning Chapter 11 Related Matters Until June 1, 2016, Corning and The Dow Chemical Company (“Dow”) each owned 50% of the common stock of Dow Corning Corporation (“Dow Corning”). On May 31, 2016, Corning and Dow realigned their ownership interest in Dow Corning. In connection with the realignment, Corning retained its indirect ownership interest in the Hemlock Semiconductor Group and acquired HS Upstate, Inc. (now known as Corning Research & Development Corporation) which had been capitalized by Dow Corning with $4.8 billion . Following the realignment, Corning no longer owns any interest in Dow Corning. In connection with the realignment, Corning agreed to indemnify Dow Corning for 50% of Dow Corning’s non-ordinary course, pre-closing liabilities to the extent such liabilities exceed the amounts reserved for them by Dow Corning as of May 31, 2016, including two legacy Dow Corning matters: the Dow Corning Breast Implant Litigation, and the Dow Corning Bankruptcy Pendency Interest Claims. Dow Corning Breast Implant Litigation In May 1995, Dow Corning filed for bankruptcy protection to address pending and claimed liabilities arising from many thousands of breast implant product lawsuits. On June 1, 2004, Dow Corning emerged from Chapter 11 with a Plan of Reorganization (the “Plan”) which provided for the settlement or other resolution of implant claims. The Plan also includes releases for Corning and Dow as shareholders in exchange for contributions to the Plan. Under the terms of the Plan, Dow Corning has established and is funding a Settlement Trust and a Litigation Facility to provide a means for tort claimants to settle or litigate their claims. Inclusive of insurance, Dow Cornin g has paid approximately $1.8 billion to th e Settlement Trust. As of May 31, 2016, Dow Corning had recorded a reserve for brea st implant litigation of $290 million . In the event Dow Corning’s total liability for these claims exceeds such amount, Corning may be required to indemnify Dow Corning for up 50% of the excess liability. Dow Corning Bankruptcy Pendency Interest Claims As a separate matter arising from the bankruptcy proceedings, Dow Corning is defending claims asserted by a number of commercial creditors who claim additional interest at default rates and enforcement costs, during the period from May 199 5 through June 2004. At March 31, 2018 and December 31, 2017 , Dow Corning estimated the liability to commercial creditors to be within the range of $77 millio n to $260 million. As of May 31, 2016, Dow Corning had recorded a re serve for these claims of $107 million . In the event Dow Corning’s liability for these claims exceeds such amount, Corning may be required to indemnify Dow Corning for up 50% of the excess liability, subject to certain conditions and limits. Other Commitments and Contingencies Corning is a defendant in various lawsuits, including environmental and product-related suits, and is subject to various claims that arise in the normal course of business. In the opinion of management, the likelihood that the ultimate disposition of these matters will have a material adverse effect on Corning’s consolidated financial position, liquidity, or results of operations, is remote. Other than certain asbestos related claims, there are no other material loss contingencies related to 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 1 5 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 March 31, 2018 and December 31, 2017 , Corning had accrued approximately $ 38 million (undiscounted) 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. The ability of certain subsidiaries and affiliated companies to transfer funds is limited by provisions of foreign government regulations, affiliate agreements and certain loan agreements. At March 31, 2018 , the amount of equity subject to such restrictions for consolidated subsidiaries and affiliated companies was not significant. While this amount is legally restricted, it does not result in operational difficulties since we have generally permitted subsidiaries to retain a majority of equity to support their growth programs. |
Debt
Debt | 3 Months Ended |
Mar. 31, 2018 | |
Debt [Abstract] | |
Debt | 4. Debt Based on borrowing rates currently available to us for loans with similar terms and maturities, the fair value of long-term debt was $ 5.1 billion at March 31, 2018 and December 31, 2017 , compared to recorded book values of $4.8 billion at March 31, 2018 and $4.7 billion at December 31, 2017. The Company measures the fair value of its long-term debt using Level 2 inputs based primarily on current market yields for its existing debt traded in the secondary market. Corning did not have outstanding commercial paper at March 31, 2018 and December 31, 2017. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2018 | |
Income Taxes [Abstract] | |
Income Taxes | 5. Income Taxes Our (provision) benefit for income taxes and the related effective income tax rates were as follows (in millions): Three Months Ended March 31, 2018 2017 (Provision) benefit for income taxes $ (124) $ 66 Effective tax rate (benefit) 26.7% (330.0%) For the three months ended March 31, 2018, the effective income tax rate differed from the U.S. statutory rate of 21% primarily due to the following: · Additional tax expense of $172 million related to a preliminary agreement with the Internal Revenue Service (“IRS”) to settle the income tax audit of years 2013 and 2014; and · A reduction in the tax benefit of $37 million from domestic losses attributable to foreign exchange and losses on translated earnings contracts due to the impacts of the base erosion and anti-deferral tax (“BEAT”). For the three months ended March 31, 2017, the effective income tax benefit differed from the U.S. statutory rate of 35% primarily due to the following benefits: · Rate differences on income (loss) of consolidated foreign companies, including the benefit of excess foreign tax credits resulting from the inclusion of foreign earnings in U.S. income; and · The impact from domestic losses attributable to foreign exchange and losses on translated earnings contracts. The Tax Cuts and Jobs Act (the “2017 Tax Act”) was enacted on December 22, 2017. The 2017 Tax Act reduces the U.S. federal corporate income tax rate from 35% to 21%, and requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred and creates new taxes on certain foreign sourced earnings. We are applying the guidance in SAB 118 when accounting for the enactment-date effects of the Act. At March 31, 2018, we have not completed our accounting for all of the tax effects of the 2017 Tax Act. We have made a reasonable estimate of certain effects of the 2017 Tax Act. However, in other cases, we have not been able to make a reasonable estimate and continue to account for those items based on our existing accounting under ASC 740, Income Taxes , and the provisions of the tax laws that were in effect immediately prior to enactment. In all cases, we will continue to make and refine our calculations as additional analysis is completed. Our estimates may also be affected as we gain a more thorough understanding of the tax law. These changes could be material to income tax expense. At year end December 31, 2017, we remeasured certain deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future, which is generally 21% . We recorded a provisional amount of $347 million at that time. At December 31, 2017, we recorded a one-time toll charge based on our unrepatriated earnings of certain foreign subsidiaries that were previously deferred. This charge resulted in a provisional tax expense amount of $1.1 billion. We will continue to analyze and refine our calculations related to the measurement of these balances. As of March 31, 2018, Corning has not made sufficient progress on estimating the impact of tax reform on its assertion regarding its indefinitely reinvested foreign earnings; therefore, the Company will continue to follow its historic position while it continues to analyze this issue. While Corning is not changing its assertion at this time, the Company distributed approximately $2 billion in January 2018 from two of its foreign subsidiaries to the U.S. parent of those subsidiaries. There are no incremental taxes beyond the toll charge due with respect to this distribution of cash. Under its historic policy, Corning will continue to indefinitely reinvest substantially all of its foreign earnings, with the exception of an immaterial amount of current earnings that have very low or no tax cost associated with their repatriation. Our current analysis indicates that we have sufficient U.S. liquidity, including borrowing capacity, to fund foreseeable U.S. cash needs without requiring the repatriation of foreign cash. Under new guidance, a company can make a policy election to account for tax on global intangible low-taxed income (“GILTI”) as a period cost only or to also recognize deferred tax assets and liabilities when basis differences exist that are expected to affect the amount of GILTI inclusion upon reversal . Corning’s accounting for the impact of the GILTI provisions of the 2017 Tax Act is incomplete and, as a result, it has not yet elected a policy to account for the GILTI provisions. We will continue to monitor future guidance and to assess the impacts of the 2017 Tax Act. Corning has reached a preliminary agreement with the IRS Exam team to resolve the 2013 and 2014 audits. This agreement resulted in $172 million of additional tax expense in the first quarter of 2018, of which $12 million relates to interest expense, net of tax benefit. Corning will use tax attributes to cover most of the tax expense. |
(Loss) Earnings per Common Shar
(Loss) Earnings per Common Share | 3 Months Ended |
Mar. 31, 2018 | |
(Loss) Earnings per Common Share [Abstract] | |
(Loss) Earnings per Common Share | 6. (Loss) Earnings per Common Share The following table sets forth the computation of basic and diluted (loss) earnings per common share (in millions, except per share amounts): Three Months Ended March 31, 2018 2017 Net (loss) income attributable to Corning Incorporated $ (589) $ 86 Less: Series A convertible preferred stock dividend 24 24 Net (loss) income available to common stockholders – basic (613) 62 Net (loss) income available to common stockholders – diluted $ (613) $ 62 Weighted-average common shares outstanding – basic 848 925 Effect of dilutive securities: Stock options and other dilutive securities 11 Weighted-average common shares outstanding – diluted 848 936 Basic (loss) earnings per common share $ (0.72) $ 0.07 Diluted (loss) earnings per common share $ (0.72) $ 0.07 Antidilutive potential shares excluded from diluted earnings per common share: Series A convertible preferred stock (1) 115 115 Employee stock options and awards 11 2 Total 126 117 (1) In the three months ended March 31, 2018 and 2017, the Series A convertible preferred stock was anti-dilutive and therefore was excluded from the calculation of diluted earnings per share . |
Inventories, Net of Inventory R
Inventories, Net of Inventory Reserves | 3 Months Ended |
Mar. 31, 2018 | |
Inventories, Net of Inventory Reserves [Abstract] | |
Inventories, Net of Inventory Reserves | 7. Inventories, Net of Inventory Reserves Inventories, net of inventory reserves comprise the following (in millions): March 31, December 31, 2018 2017 Finished goods $ 786 $ 739 Work in process 340 322 Raw materials and accessories 350 306 Supplies and packing materials 358 345 Total inventories, net of inventory reserves $ 1,834 $ 1,712 |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and Other Intangible Assets [Abstract] | |
Goodwill and Other Intangible Assets | 8. Goodwill and Other Intangible Assets The carrying amount of goodwill by segment for the periods ended March 31, 2018 and December 31, 2017 is as follows (in millions): Display Optical Specialty Life All Technologies Communications Materials Sciences Other Total Balance at December 31, 2017 $ 136 $ 671 $ 150 $ 623 $ 114 $ 1,694 Foreign currency translation adjustment (2) 4 2 4 Balance at March 31, 2018 $ 136 $ 669 $ 150 $ 627 $ 116 $ 1,698 Corning’s gross goodwill balances for the periods ended March 31, 2018 and December 31, 2017 each were $ 8.2 billion, respectively. Accumulated impairment losses were $6.5 billion for the periods ended March 31, 2018 and December 31, 2017, and were generated primarily through goodwill impairments related to the Optical Communications segment. Other intangible assets are as follows (in millions): March 31, 2018 December 31, 2017 Accumulated Accumulated Gross amortization Net Gross amortization Net Amortized intangible assets: Patents, trademarks, and trade names $ 380 $ 191 $ 189 $ 382 $ 188 $ 194 Customer lists and other 886 224 662 884 209 675 Total $ 1,266 $ 415 $ 851 $ 1,266 $ 397 $ 869 Corning’s amortized intangible assets are primarily related to the Optical Communications and Life Sciences segments. The net carrying amount of intangible assets decreased in the first quarter of 2018, primarily due to amortization of $19 million, offset by foreign currency translation adjustments of $ 1 million. Amortization expense related to these intangible assets is estimated to be $ 72 million annually for 2019, $71 million annually from 20 20 to 2022 , and $ 70 million annually for 2023 . |
Employee Retirement Plans
Employee Retirement Plans | 3 Months Ended |
Mar. 31, 2018 | |
Employee Retirement Plans [Abstract] | |
Employee Retirement Plans | 9. Employee Retirement Plans The following table summarizes the components of net periodic benefit cost for Corning’s defined benefit pension and postretirement health care and life insurance plans (in millions): Pension Benefits Postretirement benefits Three months ended Three months ended March 31, March 31, 2018 2017 2018 2017 Service cost $ 25 $ 24 $ 3 $ 3 Interest cost 32 31 6 7 Expected return on plan assets (47) (43) Amortization of prior service cost (credit) 2 1 (1) (1) Total pension and postretirement benefit expense $ 12 $ 13 $ 8 $ 9 The components of net period benefit cost other than the service cost component are included in the line item “Other expense, net” in the consolidated statements of (loss) income. On January 1, 2018, we adopted Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. The service cost component of net periodic pension and postretirement benefit cost is presented with other current compensation costs in operating income. The remaining components are included in the line item Other expense, net, in the consolidated statements of (loss) income. Corning has applied the practical expedient which permits it to use the amounts disclosed in its pension and other postretirement benefit plan note for the prior comparative periods as the estimation basis for applying the retrospective presentation requirements . See Note 1 (Significant Accounting Policies) for additional information. |
Other Liabilities
Other Liabilities | 3 Months Ended |
Mar. 31, 2018 | |
Other Liabilities [Abstract] | |
Other Liabilities | 10. Other Liabilities Other liabilities follow (in millions): March 31, December 31, 2018 2017 Current liabilities: Wages and employee benefits $ 374 $ 620 Income taxes 192 148 Derivative instruments 122 42 Asbestos and other litigation (Note 3) 179 41 Other current liabilities 584 540 Other accrued liabilities $ 1,451 $ 1,391 Non-current liabilities: Defined benefit pension plan liabilities $ 724 $ 713 Derivative instruments 830 333 Asbestos and other litigation (Note 3) 330 338 Investment in Hemlock Semiconductor Group ("HSG") (1) 66 105 Customer deposits (Note 2) 682 382 Deferred tax liabilities 514 451 Other non-current liabilities 651 695 Other liabilities $ 3,797 $ 3,017 (1) The negative carrying value resulted from a one-time charge to this entity in 2014 for the permanent abandonment of certain assets. |
Hedging Activities
Hedging Activities | 3 Months Ended |
Mar. 31, 2018 | |
Hedging Activities [Abstract] | |
Hedging Activities | 11. Hedging Activities Undesignated Hedges The table below includes a total gross notional value for translated earnings contracts of $ 14.3 billion at March 31, 2018 and December 31, 2017 . The translated earnings contracts include average rate forwards of $13.1 billion and $ 13.0 billion and zero-cost collars of $ 1.2 billion and $ 1.3 billion at March 31, 2018 and December 31, 2017 , respectively. The majority of the average rate forward contracts hedge a significant portion of the Company’s exposure to the Japanese yen with maturities spanning the years 2017-2022 and with gross notional values of $ 11.0 billion and $ 11.7 billion at March 31, 2018 and December 31, 2017, respectively. The average rate forward contracts also partially hedge the impacts of the South Korean won, New Taiwan dollar, Chinese yuan, Euro and British pound translation on the Company’s projected net income. With respect to the zero-cost collars, the gross notional amount includes the value of both the put and call options. However, due to the nature of the zero-cost collars, only the put or the call option can be exercised at maturity. The following tables summarize the notional amounts and respective fair values of Corning’s derivative financial instruments on a gross basis for March 31, 2018 and December 31, 2017 (in millions): Asset derivatives Liability derivatives Gross notional amount Balance Fair value Balance Fair value March 31, Dec. 31, sheet March 31, Dec. 31, sheet March 31, Dec. 31, 2018 2017 location 2018 2017 location 2018 2017 Derivatives designated as hedging instruments Foreign exchange contracts (1) $ 313 $ 294 Other current assets $ 16 $ 20 Other assets 3 1 Interest rate contracts 550 550 Other liabilities $ (11) $ (8) Derivatives not designated as hedging instruments Foreign exchange contracts, other 1,431 599 Other current assets 3 2 Other accrued liabilities (14) (7) Translated earnings contracts 14,280 14,275 Other current assets 106 176 Other accrued liabilities (108) (34) Other assets 69 66 Other liabilities (819) (325) Total derivatives $ 16,574 $ 15,718 $ 197 $ 265 $ (952) $ (374) (1) Cash flow hedges with a typical duration of 24 months or less. The following table summarizes the effect of derivative financial instruments on Corning’s consolidated financial statements for the three months ended March 31, 2018 and 2017 (in millions): Effect of derivative instruments on the consolidated financial statements for the three months ended March 31, Gain recognized in other Location of gain/(loss) Gain/(loss) reclassified from comprehensive income reclassified from accumulated OCI into Derivatives in hedging (OCI) accumulated OCI into income (effective) (1) relationships 2018 2017 income (effective) 2018 2017 Cost of sales $ 4 $ (6) Foreign exchange contracts $ 2 $ 23 Total cash flow hedges $ 2 $ 23 $ 4 $ (6) (1) The amount of hedge ineffectiveness at March 31, 2018 and 2017 was insignificant. The following table summarizes the effect on the consolidated financial statements relating to Corning’s derivative financial instruments (in millions): Gain (loss) recognized in income Three months ended Location of gain/(loss) March 31, Undesignated derivatives recognized in income 2018 2017 Foreign exchange contracts – balance sheet and loans Other expense, net $ (19) $ 2 Foreign currency hedges related to translated earnings Translated earnings contract loss, net (622) (438) Total undesignated $ (641) $ (436) |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Measurements [Abstract] | |
Fair Value Measurements | 12. Fair Value Measurements Fair value standards under U.S. GAAP define fair value, establish a framework for measuring fair value in applying generally accepted accounting principles, and require disclosures about fair value measurements. The standards also identify two kinds of inputs that are used to determine the fair value of assets and liabilities: observable and unobservable. Observable inputs are based on market data or independent sources while unobservable inputs are based on the Company’s own market assumptions. Once inputs have been characterized, the inputs are prioritized into one of three broad levels (provided in the table below) used to measure fair value. Fair value standards apply whenever an entity is measuring fair value under other accounting pronouncements that require or permit fair value measurement and require the use of observable market data when available. The following tables provide fair value measurement information for the Company’s major categories of financial assets and liabilities measured on a recurring basis (in millions): Fair value measurements at reporting date using Quoted prices in Significant other Significant active markets for observable unobservable March 31, identical assets inputs inputs 2018 (Level 1) (Level 2) (Level 3) Current assets: Other current assets (1) $ 125 $ 125 Non-current assets: Other assets (1) $ 72 $ 72 Current liabilities: Other accrued liabilities (1) $ 122 $ 122 Non-current liabilities: Other liabilities (1)(2) $ 850 $ 830 $ 20 (1) Derivative assets and liabilities include foreign exchange contracts which are measured using observable quoted prices for similar assets and liabilities. (2) At March 31, 2018, other liabilities include contingent consideration that was measured using unobservable (level 3) inp uts, in the amount of $20 million. Fair value measurements at reporting date using Quoted prices in Significant other Significant active markets for observable unobservable December 31, identical assets inputs inputs 2017 (Level 1) (Level 2) (Level 3) Current assets: Other current assets (1)(2) $ 497 $ 197 $ 300 Non-current assets: Other assets (1) $ 68 $ 68 Current liabilities: Other accrued liabilities (1)(2) $ 44 $ 42 $ 2 Non-current liabilities: Other liabilities (1)(2) $ 353 $ 333 $ 20 (1) Derivative assets and liabilities include foreign exchange contracts which are measured using observable quoted prices for similar assets and liabilities. (2) At December 31, 2017, other current assets, other accrued liabilities and other liabilities include contingent consideration that was measured using unobservable (level 3) inp uts, in the amounts of $300 million, $2 million and $20 million, respectively. As a result of the acquisition of Samsung Corning Precision Materials in January 2014, the Company has contingent consideration that was measured using unobservable (Level 3) inputs in an option pricing model. The fair value of the potential receipt of the contingent consideration was calculated to be $ 300 million as of December 31, 2017. As of March 31, 2018, the value of this contingent consideration is based on a contractual value and no longer calculated using unobservable (Level 3) inputs in an option pricing model. The contractual value of this contingent consideration as of March 31, 2018 was $300 million. There were no significant financial assets and liabilities measured on a nonrecurring basis as of March 31, 2018 and December 31, 2017. |
Shareholders' Equity
Shareholders' Equity | 3 Months Ended |
Mar. 31, 2018 | |
Shareholders' Equity [Abstract] | |
Shareholders' Equity | 1 3 . Shareholders’ Equity Fixed Rate Cumulative Convertible Preferred Stock, Series A Corning has 2,300 outstanding shares of Fixed Rate Cumulative Convertible Preferred Stock, Series A. The Preferred Stock is convertible at the option of the holder and the Company upon certain events, at a conversion rate of 50,000 shares of Corning’s common stock per one share of Preferred Stock, subject to certain anti-dilution provisions. As of March 31, 2018 , the Preferred Stock has not been converted, and none of the anti-dilution provisions have been triggered. Share Repurchases 2017 Share Repurchases In December 2016, Corning’s Board of Directors approved a $4 billion share repurchase program with no expiration (the “2016 Repurchase Program”). In the year ended December 3 1 , 2017, Corning entered into two separate accelerated share repurchase agreements under this program (the “2017 ASR agreements”). In the second quarter of 2017, Corning entered into and finalized an accelerated share repurchase agreement under which we paid $500 million for a total of 17.1 million shares. In the third quarter of 2017, Corning entered into and finalized an additional accelerated share repurchase agreement under which we paid $500 million for a total of 17.2 million shares. In addition to the 2017 ASR agreements, during the year ended December 3 1 , 2017, the Company repurchased 50.1 million shares of common stock on th e open market for approximately $1.4 billion, res ulting in a total of 84.4 million shares repurchased for approximately $2.4 billion during 2017 . 201 8 Share Repurchases In the three months ended March 31, 2018, the Company repurchased 27.1 million shares of common stock on the open market for approximately $814.3 million as part of its 2016 Repurchase Program. On April 26, 2018, Corning’s Board of Directors approved a $2 billion share repurchase program with no expiration (the “2018 Repurchase Program”). The 2018 Repurchase Program will commence when the authorization under the 2016 Repurchase Program is exhausted. Accumulated Other Comprehensive Loss In the three months ended March 31, 2018 and 2017 , the change in accumulated other comprehensive loss w as primarily related to the foreign currency translation adjustment. A summary of changes in the foreign currency translation adjustment component of accumulated other comprehensive loss is as follows (in millions) (1) : Three months ended March 31, 2018 2017 Beginning balance $ (529) $ (1,275) Other comprehensive income (2) 260 434 Equity method affiliates (3) 4 16 Net current-period other comprehensive income 264 450 Ending balance $ (265) $ (825) (1) All amounts are after tax. Amounts in parentheses indicate debits to accumulated other comprehensive loss . (2) For the three months ended March 31, 2018 and 2017, amounts are n e t of tax expense of $10 million and $57 million, respectively. (3) Tax effects are not significant . |
Reportable Segments
Reportable Segments | 3 Months Ended |
Mar. 31, 2018 | |
Reportable Segments [Abstract] | |
Reportable Segments | 14. Reportable Segments Our reportable segments are as follows: · Display Technologies – manufactures glass substrates primarily for flat panel liquid crystal displays. · Optical Communications – manufactures carrier and enterprise network components for the telecommunications industry. · Specialty Materials – manufactures products that provide more than 150 material formulations for glass, glass ceramics and fluoride crystals to meet demand for unique customer needs. · Environmental Technologies – manufactures ceramic substrates and filters for automotive and diesel applications. · Life Sciences – manufactures glass and plastic labware, equipment, media and reagents enabling workflow solutions for scientific applications. 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 and new product lines and development projects, as well as certain corporate investments such as Eurokera and Keraglass equity affiliates. Effective beginning in the first quarter of 2018, the Company has changed its measurement of segment sales and segment net income , and has recast prior periods presented based on the new methodology . Included in this new measurement is a change in our segment tax rate to 21% to better reflect our new corporate tax rate under U.S. tax reform. Additionally, t he impact of changes in the Japanese yen, Korean wo n, Chinese yuan and New Taiwan d ollar will be excluded from segment sales and segment net income for the Display Technologies and Specialty Materials segments , and certain income and expenses that were previously allocated to our segments are now included in the unallocated amounts in the reconciliation of reportable segment net income to consolidated net income. These include items that are not used by our chief operating decision maker (“CODM”) in evaluating the results of or in allocating resources to our segments and include the following items: the impact of our translated earnings contracts; acquisition-related costs; discrete tax items and other tax-related adjustments; litigation, regulatory and other legal matters; restructuring, impairment and other charges; adjustments relating to acquisitions; and other non-recurring non-operational items. Although we exclude these amounts from segment results , they are included in reported consolidated results . We prepared the financial results for our reportable segments on a basis that is consistent with the manner in which we internally disaggregate financial information to assist the CODM in making internal operating decisions. We included the earnings of equity affiliates that are closely associated with our reportable segments in the respective segment’s net income. We have allocated certain common expenses among reportable segments differently than we would for stand-alone financial information. Segment net income may not be consistent with measures used by other companies. Reportable Segments (in millions) Display Optical Specialty Environmental Life All Technologies Communications Materials Technologies Sciences Other Total Three months ended March 31, 2018 Reportable segment net sales $ 745 $ 886 $ 278 $ 322 $ 232 $ 50 $ 2,513 Depreciation (1) $ 144 $ 52 $ 33 $ 29 $ 14 $ 11 $ 283 Research, development and engineering expenses (2) $ 23 $ 49 $ 39 $ 29 $ 5 $ 57 $ 202 Income tax (provision) benefit $ (49) $ (30) $ (12) $ (14) $ (7) $ 20 $ (92) Segment net income (loss) (3) $ 185 $ 109 $ 46 $ 52 $ 27 $ (74) $ 345 Display Optical Specialty Environmental Life All Technologies Communications Materials Technologies Sciences Other Total Three months ended March 31, 2017 Reportable segment net sales $ 782 $ 818 $ 300 $ 275 $ 210 $ 36 $ 2,421 Depreciation (1) $ 129 $ 45 $ 29 $ 31 $ 12 $ 12 $ 258 Research, development and engineering expenses (2) $ 19 $ 37 $ 36 $ 25 $ 6 $ 52 $ 175 Income tax (provision) benefit $ (65) $ (30) $ (15) $ (12) $ (6) $ 15 $ (113) Segment net income (loss) (3) $ 245 $ 110 $ 57 $ 44 $ 24 $ (60) $ 420 (1) Depreciation expense for Corning’s reportable segments includes an allocation of depreciation of corporate property not specifically identifiable to a segment . (2) Research , development and engineering expenses include direct project spending that is identifiable to a segment. (3) Many of Corning’s administrative and staff functions are performed on a centralized basis. Where practicable, Corning charges these expenses to segments based upon the extent to which each business uses a centralized function. Other staff functions , such as corporate finance, human resources and legal, are allocated to segments, primarily as a percentage of sales. Expenses that are not allocated to the segments are included in the reconciliation of reportable segment net income to consolidated net (loss) income below. A reconciliation of reportable segment and All Other net sales to consolidated net sales follows (in millions): Three months ended March 31, 2018 2017 Net sales of reportable segments and All Other $ 2,513 $ 2,421 Impact of foreign currency movements not included in segment net sales (1) (13) (46) Net sales $ 2,500 $ 2,375 (1) This amount primarily r epresents the impact of foreign currency adjustments in the Display Technologies segment. A reconciliation of reportable segment net income to consolidated net (loss) income follows (in millions): Three months ended March 31, 2018 2017 Net income of reportable segments $ 419 $ 480 Net loss of All Other (74) (60) Unallocated amounts: Impact of foreign currency movements not included in segment net income (loss) (31) (37) Unrealized loss on foreign currency hedges related to translated earnings (622) (438) Litigation expense (136) (3) Research, development, and engineering expense (39) (27) Equity in earnings of affiliated companies (1) (37) (79) Income tax (provision) benefit (32) 179 Other corporate items (37) 71 Net (loss) income $ (589) $ 86 (1) Primarily represents the equity earnings of HSG. |
Significant Accounting Polici21
Significant Accounting Policies (Policy) | 3 Months Ended |
Mar. 31, 2018 | |
Significant Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation In these notes, the terms “Corning,” “Company,” “we,” “us,” or “our” mean Corning Incorporated and its subsidiary companies. The accompanying unaudited consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”) for interim financial information. Certain information and note disclosures normally included in financial statements prepared in accordance with GAAP have been omitted or condensed. These interim consolidated financial statements should be read in conjunction with Corning’s consolidated financial statements and notes thereto included in its Annual Report on Form 10-K for the year ended December 31, 2017 (“ 2017 Form 10-K”). The unaudited consolidated financial statements reflect all adjustments which, in the opinion of management, are necessary for a fair statement of the results of operations, financial position and cash flows for the interim periods presented. All such adjustments are of a normal recurring nature. The results for interim periods are not necessarily indicative of results which may be expected for any other interim period or for the full year. On January 1, 2018, we adopted Accounting Standards Update (“ASU”) No. 2014-09 ASC (Topic 606), Revenue from Contracts with Customers, and applied the modified retrospective method of accounting to those contracts which were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting under ASC Topic 605 “Revenue Recognition”. Because the impact of adopting the standard on Corning’s financial statements was immaterial, we have not made an adjustment to opening retained earnings. One of Corning’s equity affiliates is currently assessing the potential impact of adopting ASU 2014-09 on its financial statements and will adopt the standard on January 1, 2019. Preliminary analysis indicates that the impact of adoption will not have a material impact on Corning’s financial statements. On January 1, 2018, Corning adopted ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, which refines the classification of certain aspects of the cash flow statement in regards to debt prepayment, settlement of debt instruments, contingent consideration payments, proceeds from insurance claims and life insurance policies, distribution from equity method investees, beneficial interests in securitization transactions and separately identifiable cash flows. The impact of adopting the standard on Corning’s financial statements was not material. On January 1, 2018, we adopted ASU No. 2017-07, Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. The service cost component of net periodic pension and postretirement benefit cost is presented with other current compensation costs in operating income. The remaining components are included in the line item Other expense, net, in the consolidated statements of (loss) income. Corning has applied the practical expedient which permits it to use the amounts disclosed in its pension and other postretirement benefit plan note for the prior comparative periods as the estimation basis for applying the retrospective presentation requirements . The impact of adopting the standard on Corning’s financial statements was not material. Certain prior year amounts have been reclassified to conform to the current-year presentation. These reclassifications had no impact on our results of operations, financial position, or changes in shareholders’ equity. |
New Accounting Standards | New Accounting Standards In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which supersedes all existing guidance on accounting for leases in ASC Topic 840. ASU 2016-02 will continue to classify leases as either finance or operating, with classification affecting the pattern of expense recognition in the statement of income. This standard will be effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. ASU 2016-02 is required to be applied with a modified retrospective approach to each prior reporting period presented with various optional practical expedients. We are currently assessing the potential impact of adopting this standard on our financial statements and related disclosures. One of Corning’s equity affiliates is currently assessing the potential impact of adopting this standard on its financial statements and elected to adopt the standard on January 1, 2020. In February 2018, the FASB issued ASU 2018-02, Income Statement - Reporting Comprehensive Income, which allows for reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act. ASU 2018-02 is effective for annual reporting periods beginning after December 15, 2018, and interim periods within those annual periods. Early adoption is permitted. We are currently assessing the potential impact of adopting ASU 2018-02 on our financial statements |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Revenue [Abstract] | |
Disaggregation of Revenue | Three Months Ended March 31, Revenues by Product Category 2018 2017 Display products $ 732 $ 736 Telecommunication products 886 818 Specialty glass products 278 300 Environmental substrate and filter products 322 275 Life science products 232 210 All Other 50 36 $ 2,500 $ 2,375 |
Income Taxes (Tables)
Income Taxes (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Income Taxes [Abstract] | |
Provision for Income Taxes | Three Months Ended March 31, 2018 2017 (Provision) benefit for income taxes $ (124) $ 66 Effective tax rate (benefit) 26.7% (330.0%) |
(Loss) Earnings per Common Sh24
(Loss) Earnings per Common Share (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
(Loss) Earnings per Common Share [Abstract] | |
Computation of Basic and Diluted Earnings per Common Share | Three Months Ended March 31, 2018 2017 Net (loss) income attributable to Corning Incorporated $ (589) $ 86 Less: Series A convertible preferred stock dividend 24 24 Net (loss) income available to common stockholders – basic (613) 62 Net (loss) income available to common stockholders – diluted $ (613) $ 62 Weighted-average common shares outstanding – basic 848 925 Effect of dilutive securities: Stock options and other dilutive securities 11 Weighted-average common shares outstanding – diluted 848 936 Basic (loss) earnings per common share $ (0.72) $ 0.07 Diluted (loss) earnings per common share $ (0.72) $ 0.07 Antidilutive potential shares excluded from diluted earnings per common share: Series A convertible preferred stock (1) 115 115 Employee stock options and awards 11 2 Total 126 117 In the three months ended March 31, 2018 and 2017, the Series A convertible preferred stock was anti-dilutive and therefore was excluded from the calculation of diluted earnings per share |
Inventories, Net of Inventory25
Inventories, Net of Inventory Reserves (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Inventories, Net of Inventory Reserves [Abstract] | |
Inventories, Net | March 31, December 31, 2018 2017 Finished goods $ 786 $ 739 Work in process 340 322 Raw materials and accessories 350 306 Supplies and packing materials 358 345 Total inventories, net of inventory reserves $ 1,834 $ 1,712 |
Goodwill and Other Intangible26
Goodwill and Other Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and Other Intangible Assets [Abstract] | |
Carrying Amount of Goodwill by Segment | Display Optical Specialty Life All Technologies Communications Materials Sciences Other Total Balance at December 31, 2017 $ 136 $ 671 $ 150 $ 623 $ 114 $ 1,694 Foreign currency translation adjustment (2) 4 2 4 Balance at March 31, 2018 $ 136 $ 669 $ 150 $ 627 $ 116 $ 1,698 |
Other Intangible Assets | March 31, 2018 December 31, 2017 Accumulated Accumulated Gross amortization Net Gross amortization Net Amortized intangible assets: Patents, trademarks, and trade names $ 380 $ 191 $ 189 $ 382 $ 188 $ 194 Customer lists and other 886 224 662 884 209 675 Total $ 1,266 $ 415 $ 851 $ 1,266 $ 397 $ 869 |
Employee Retirement Plans (Tabl
Employee Retirement Plans (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Employee Retirement Plans [Abstract] | |
Net Periodic Benefit Expense | Pension Benefits Postretirement benefits Three months ended Three months ended March 31, March 31, 2018 2017 2018 2017 Service cost $ 25 $ 24 $ 3 $ 3 Interest cost 32 31 6 7 Expected return on plan assets (47) (43) Amortization of prior service cost (credit) 2 1 (1) (1) Total pension and postretirement benefit expense $ 12 $ 13 $ 8 $ 9 |
Other Liabilities (Tables)
Other Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Other Liabilities [Abstract] | |
Other Liabilities | March 31, December 31, 2018 2017 Current liabilities: Wages and employee benefits $ 374 $ 620 Income taxes 192 148 Derivative instruments 122 42 Asbestos and other litigation (Note 3) 179 41 Other current liabilities 584 540 Other accrued liabilities $ 1,451 $ 1,391 Non-current liabilities: Defined benefit pension plan liabilities $ 724 $ 713 Derivative instruments 830 333 Asbestos and other litigation (Note 3) 330 338 Investment in Hemlock Semiconductor Group ("HSG") (1) 66 105 Customer deposits (Note 2) 682 382 Deferred tax liabilities 514 451 Other non-current liabilities 651 695 Other liabilities $ 3,797 $ 3,017 The negative carrying value resulted from a one-time charge to this entity in 2014 for the permanent abandonment of certain assets. |
Hedging Activities (Tables)
Hedging Activities (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Summary of Notional Amounts and Respective Fair Values of Derivative Financial Instruments | Asset derivatives Liability derivatives Gross notional amount Balance Fair value Balance Fair value March 31, Dec. 31, sheet March 31, Dec. 31, sheet March 31, Dec. 31, 2018 2017 location 2018 2017 location 2018 2017 Derivatives designated as hedging instruments Foreign exchange contracts (1) $ 313 $ 294 Other current assets $ 16 $ 20 Other assets 3 1 Interest rate contracts 550 550 Other liabilities $ (11) $ (8) Derivatives not designated as hedging instruments Foreign exchange contracts, other 1,431 599 Other current assets 3 2 Other accrued liabilities (14) (7) Translated earnings contracts 14,280 14,275 Other current assets 106 176 Other accrued liabilities (108) (34) Other assets 69 66 Other liabilities (819) (325) Total derivatives $ 16,574 $ 15,718 $ 197 $ 265 $ (952) $ (374) (1) Cash flow hedges with a typical duration of 24 months or less. |
Designated as Hedging Instrument [Member] | |
Effect on Consolidated Financial Statements | Effect of derivative instruments on the consolidated financial statements for the three months ended March 31, Gain recognized in other Location of gain/(loss) Gain/(loss) reclassified from comprehensive income reclassified from accumulated OCI into Derivatives in hedging (OCI) accumulated OCI into income (effective) (1) relationships 2018 2017 income (effective) 2018 2017 Cost of sales $ 4 $ (6) Foreign exchange contracts $ 2 $ 23 Total cash flow hedges $ 2 $ 23 $ 4 $ (6) (1) The amount of hedge ineffectiveness at March 31, 2018 and 2017 was insignificant. |
Not Designated as Hedging Instrument [Member] | |
Effect on Consolidated Financial Statements | Gain (loss) recognized in income Three months ended Location of gain/(loss) March 31, Undesignated derivatives recognized in income 2018 2017 Foreign exchange contracts – balance sheet and loans Other expense, net $ (19) $ 2 Foreign currency hedges related to translated earnings Translated earnings contract loss, net (622) (438) Total undesignated $ (641) $ (436) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Measurements [Abstract] | |
Major Categories of Financial Assets and Liabilities Measured on a Recurring Basis | Fair value measurements at reporting date using Quoted prices in Significant other Significant active markets for observable unobservable March 31, identical assets inputs inputs 2018 (Level 1) (Level 2) (Level 3) Current assets: Other current assets (1) $ 125 $ 125 Non-current assets: Other assets (1) $ 72 $ 72 Current liabilities: Other accrued liabilities (1) $ 122 $ 122 Non-current liabilities: Other liabilities (1)(2) $ 850 $ 830 $ 20 (1) Derivative assets and liabilities include foreign exchange contracts which are measured using observable quoted prices for similar assets and liabilities. (2) At March 31, 2018, other liabilities include contingent consideration that was measured using unobservable (level 3) inp uts, in the amount of $20 million. Fair value measurements at reporting date using Quoted prices in Significant other Significant active markets for observable unobservable December 31, identical assets inputs inputs 2017 (Level 1) (Level 2) (Level 3) Current assets: Other current assets (1)(2) $ 497 $ 197 $ 300 Non-current assets: Other assets (1) $ 68 $ 68 Current liabilities: Other accrued liabilities (1)(2) $ 44 $ 42 $ 2 Non-current liabilities: Other liabilities (1)(2) $ 353 $ 333 $ 20 (1) Derivative assets and liabilities include foreign exchange contracts which are measured using observable quoted prices for similar assets and liabilities. (2) At December 31, 2017, other current assets, other accrued liabilities and other liabilities include contingent consideration that was measured using unobservable (level 3) inp uts, in the amounts of $300 million, $2 million and $20 million, respectively. |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Accumulated Foreign Currency Adjustment Attributable to Parent [Member] | |
Accumulated Other Comprehensive Income (Loss) | Three months ended March 31, 2018 2017 Beginning balance $ (529) $ (1,275) Other comprehensive income (2) 260 434 Equity method affiliates (3) 4 16 Net current-period other comprehensive income 264 450 Ending balance $ (265) $ (825) (1) All amounts are after tax. Amounts in parentheses indicate debits to accumulated other comprehensive loss . (2) For the three months ended March 31, 2018 and 2017, amounts are n e t of tax expense of $10 million and $57 million, respectively. Tax effects are not significant |
Reportable Segments (Tables)
Reportable Segments (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Reportable Segments [Abstract] | |
Reportable Segments | Display Optical Specialty Environmental Life All Technologies Communications Materials Technologies Sciences Other Total Three months ended March 31, 2018 Reportable segment net sales $ 745 $ 886 $ 278 $ 322 $ 232 $ 50 $ 2,513 Depreciation (1) $ 144 $ 52 $ 33 $ 29 $ 14 $ 11 $ 283 Research, development and engineering expenses (2) $ 23 $ 49 $ 39 $ 29 $ 5 $ 57 $ 202 Income tax (provision) benefit $ (49) $ (30) $ (12) $ (14) $ (7) $ 20 $ (92) Segment net income (loss) (3) $ 185 $ 109 $ 46 $ 52 $ 27 $ (74) $ 345 Display Optical Specialty Environmental Life All Technologies Communications Materials Technologies Sciences Other Total Three months ended March 31, 2017 Reportable segment net sales $ 782 $ 818 $ 300 $ 275 $ 210 $ 36 $ 2,421 Depreciation (1) $ 129 $ 45 $ 29 $ 31 $ 12 $ 12 $ 258 Research, development and engineering expenses (2) $ 19 $ 37 $ 36 $ 25 $ 6 $ 52 $ 175 Income tax (provision) benefit $ (65) $ (30) $ (15) $ (12) $ (6) $ 15 $ (113) Segment net income (loss) (3) $ 245 $ 110 $ 57 $ 44 $ 24 $ (60) $ 420 (1) Depreciation expense for Corning’s reportable segments includes an allocation of depreciation of corporate property not specifically identifiable to a segment . (2) Research , development and engineering expenses include direct project spending that is identifiable to a segment. (3) Many of Corning’s administrative and staff functions are performed on a centralized basis. Where practicable, Corning charges these expenses to segments based upon the extent to which each business uses a centralized function. Other staff functions , such as corporate finance, human resources and legal, are allocated to segments, primarily as a percentage of sales. Expenses that are not allocated to the segments are included in the reconciliation of reportable segment net income to consolidated net (loss) income below. A reconciliation of reportable segment and All Other net sales to consolidated net sales follows (in millions): Three months ended March 31, 2018 2017 Net sales of reportable segments and All Other $ 2,513 $ 2,421 Impact of foreign currency movements not included in segment net sales (1) (13) (46) Net sales $ 2,500 $ 2,375 (1) This amount primarily r epresents the impact of foreign currency adjustments in the Display Technologies segment. |
Reconciliation of Reportable Segment and All Other Net Sales to Consolidated Net Sales) | Three months ended March 31, 2018 2017 Net sales of reportable segments and All Other $ 2,513 $ 2,421 Impact of foreign currency movements not included in segment net sales (1) (13) (46) Net sales $ 2,500 $ 2,375 (1) This amount primarily r epresents the impact of foreign currency adjustments in the Display Technologies segment. |
Reconciliation of Reportable Segment Net Income to Consolidated Net Income | Three months ended March 31, 2018 2017 Net income of reportable segments $ 419 $ 480 Net loss of All Other (74) (60) Unallocated amounts: Impact of foreign currency movements not included in segment net income (loss) (31) (37) Unrealized loss on foreign currency hedges related to translated earnings (622) (438) Litigation expense (136) (3) Research, development, and engineering expense (39) (27) Equity in earnings of affiliated companies (1) (37) (79) Income tax (provision) benefit (32) 179 Other corporate items (37) 71 Net (loss) income $ (589) $ 86 (1) Primarily represents the equity earnings of HSG. |
Revenue (Narrative) (Details)
Revenue (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenue [Abstract] | |||
Customer deposits | $ 682 | ||
Increase customer deposits | $ 276 | ||
Long-term supply commitment | 10 years | ||
Credit memoranda issued | $ 0 | $ 0 | $ 0 |
Revenue (Disaggregation of Reve
Revenue (Disaggregation of Revenue) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Revenues by Products Categories | $ 2,500 | $ 2,375 |
Display Products [Member] | ||
Revenues by Products Categories | 732 | 736 |
Telecommunication Products [Member] | ||
Revenues by Products Categories | 886 | 818 |
Specialty Glass Products [Member] | ||
Revenues by Products Categories | 278 | 300 |
Environmental Substrate and Filter Products [Member] | ||
Revenues by Products Categories | 322 | 275 |
Life Science Products [Member] | ||
Revenues by Products Categories | 232 | 210 |
All Other Products [Member] | ||
Revenues by Products Categories | $ 50 | $ 36 |
Commitments, Contingencies an35
Commitments, Contingencies and Guarantees (Narrative) (Details) $ in Millions | 1 Months Ended | 3 Months Ended | |||||
Jun. 30, 2017USD ($) | Mar. 31, 2018USD ($)item | Jun. 30, 2016USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Aug. 25, 2016USD ($) | May 31, 2016USD ($) | |
Loss Contingency, Accrual, Current | $ 122 | $ 42 | |||||
Loss Contingency, Accrual, Noncurrent | 330 | 338 | |||||
Dow Corning Breast Implant Litigation [Member] | |||||||
Payment of claims | $ 1,800 | ||||||
Loss Contingency, Accrual | $ 290 | ||||||
Indemnification of excess liability | 50.00% | ||||||
Dow Corning Bankruptcy Pendency Interest Claims [Member] | |||||||
Loss Contingency, Accrual | $ 107 | ||||||
Indemnification of excess liability | 50.00% | ||||||
Amended Pittsburgh Corning Corporation Plan [Member] | Asbestos Litigation [Member] | |||||||
Loss Contingency, Estimate of Possible Loss | $ 290 | ||||||
Payment of claims | $ 70 | ||||||
Loss Contingency, Accrual | $ 220 | ||||||
Loss Contingency, Accrual, Current | 35 | ||||||
Loss Contingency, Accrual, Noncurrent | $ 185 | ||||||
Loss Contingency Accrual, Period Increase (Decrease) | $ (238) | ||||||
Pittsburgh Corning Corporation PCC [Member] | |||||||
Equity Method Investment, Ownership Percentage | 50.00% | ||||||
Pittsburgh Corning Corporation PCC [Member] | PPG Industries, Inc. [Member] | |||||||
Equity Method Investment, Ownership Percentage | 50.00% | ||||||
Dow Corning Corporation [Member] | |||||||
Equity Method Investment, Ownership Percentage | 50.00% | ||||||
Investment in affiliated companies, at equity | $ 4,800 | ||||||
Environmental Cleanup and Related Litigation [Member] | |||||||
Number of Hazardous Waste Sites | item | 15 | ||||||
Accrual for Environmental Loss Contingencies | $ 38 | 38 | |||||
Non-PCC Asbestos Litigation [Member] | Asbestos Litigation [Member] | |||||||
Loss Contingency, Accrual, Noncurrent | $ 147 | $ 147 | $ 150 | ||||
Undiscounted Projection of Claims and Related Legal Fees Period | 20 years | ||||||
Minimum [Member] | Dow Corning Bankruptcy Pendency Interest Claims [Member] | |||||||
Loss Contingency, Estimate of Possible Loss | $ 77 | ||||||
Maximum [Member] | Dow Corning Bankruptcy Pendency Interest Claims [Member] | |||||||
Loss Contingency, Estimate of Possible Loss | $ 260 |
Debt (Narrative) (Details)
Debt (Narrative) (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Debt [Abstract] | ||
Debt Instrument, Fair Value Disclosure | $ 5,100 | $ 5,100 |
Long-term debt | 4,808 | 4,749 |
Commercial paper | $ 0 | $ 0 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Income Taxes [Abstract] | |||
Tax Cuts and Jobs Act of 2017, Incomplete Accounting, Change in Tax Rate, Deferred Tax Asset, Provisional Income Tax Expense (Benefit) | $ 347 | ||
Tax Cuts and Jobs Act of 2017, Incomplete Accounting, Transition Tax for Accumulated Foreign Earnings, Provisional Income Tax Expense (Benefit) | $ 1,100 | ||
Reduction of Tax Benefit, Due to Foreign Exchange Losses and Translation Adjustments | $ 37 | ||
Statutory U.S. income tax rate | 21.00% | 35.00% | |
Foreign Earnings Repatriated | $ 2,000 | ||
Income Tax as result of agreement | 172 | ||
Interest expense, net of tax benefit | $ 12 |
Income Taxes (Provision for Inc
Income Taxes (Provision for Income Taxes) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Income Taxes [Abstract] | ||
(Provision) benefit for income taxes | $ (124) | $ 66 |
Effective tax rate (benefit) | 26.70% | (330.00%) |
(Loss) Earnings per Common Sh39
(Loss) Earnings per Common Share (Computation of Basic and Diluted Earnings per Common Share) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | ||
Net (loss) income attributable to Corning Incorporated | $ (589) | $ 86 | |
Less: Series A convertible preferred stock dividend | 24 | 24 | |
Net (loss) income available to common stockholders – basic | (613) | 62 | |
Net (loss) income available to common stockholders – diluted | $ (613) | $ 62 | |
Weighted-average common shares outstanding - basic (in shares) | 848 | 925 | |
Effect of dilutive securities: | |||
Stock options and other dilutive securities (in shares) | 11 | ||
Weighted-average common shares outstanding - diluted (in shares) | 848 | 936 | |
Basic (loss) earnings per common share (in dollars per share) | $ (0.72) | $ 0.07 | |
Diluted (loss) earnings per common share (in dollars per share) | $ (0.72) | $ 0.07 | |
Anti-dilutive potential shares excluded from diluted earnings per common share: | |||
Antidilutive potential shares excluded from diluted earnings per common share (in shares) | 126 | 117 | |
Stock Compensation Plan [Member] | |||
Anti-dilutive potential shares excluded from diluted earnings per common share: | |||
Antidilutive potential shares excluded from diluted earnings per common share (in shares) | [1] | 115 | 115 |
Accelerated Share Repurchase Foward Contracts [Member] | |||
Anti-dilutive potential shares excluded from diluted earnings per common share: | |||
Antidilutive potential shares excluded from diluted earnings per common share (in shares) | 11 | 2 | |
[1] | In the three months ended March 31, 2018 and 2017, the Series A convertible preferred stock was anti-dilutive and therefore was excluded from the calculation of diluted earnings per share |
Inventories, Net of Inventory40
Inventories, Net of Inventory Reserves (Inventories, Net) (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Inventories, Net of Inventory Reserves [Abstract] | ||
Finished goods | $ 786 | $ 739 |
Work in process | 340 | 322 |
Raw materials and accessories | 350 | 306 |
Supplies and packing materials | 358 | 345 |
Total inventories, net of inventory reserves | $ 1,834 | $ 1,712 |
Goodwill and Other Intangible41
Goodwill and Other Intangible Assets (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Goodwill, Impairment Loss | $ 6,500 | $ 6,500 | |
Goodwill, Gross | 8,200 | $ 8,200 | |
Amortization of Intangible Assets | 19 | $ 17 | |
Finite-Lived Intangible Assets, Amortization Expense, 2019 | 72 | ||
Finite-Lived Intangible Assets, Amortization Expense, 2020 | 71 | ||
Finite-Lived Intangible Assets, Amortization Expense, 2021 | 71 | ||
Finite-Lived Intangible Assets, Amortization Expense, 2022 | 71 | ||
Finite-Lived Intangible Assets, Amortization Expense, 2023 | 70 | ||
Optical Communications [Member] | |||
Finite Lived Intangible Assets, Foreign Currency Translation Gain (Loss) | $ 1 |
Goodwill and Other Intangible42
Goodwill and Other Intangible Assets (Carrying Amount of Goodwill by Segment) (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Balance | $ 1,694 |
Foreign currency translation adjustment | 4 |
Balance | 1,698 |
Display Technologies [Member] | |
Balance | 136 |
Balance | 136 |
Optical Communications [Member] | |
Balance | 671 |
Foreign currency translation adjustment | (2) |
Balance | 669 |
Specialty Materials [Member] | |
Balance | 150 |
Balance | 150 |
Life Sciences [Member] | |
Balance | 623 |
Foreign currency translation adjustment | 4 |
Balance | 627 |
All Other [Member] | |
Balance | 114 |
Foreign currency translation adjustment | 2 |
Balance | $ 116 |
Goodwill and Other Intangible43
Goodwill and Other Intangible Assets (Other Intangible Assets) (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Amortized intangible assets: | ||
Other intangible assets, gross | $ 1,266 | $ 1,266 |
Other intangible assets, accumulated amortization | 415 | 397 |
Other intangible assets, net | 851 | 869 |
Patents, Trademarks, and Trade Names [Member] | ||
Amortized intangible assets: | ||
Other intangible assets, gross | 380 | 382 |
Other intangible assets, accumulated amortization | 191 | 188 |
Other intangible assets, net | 189 | 194 |
Customer Lists and Other [Member] | ||
Amortized intangible assets: | ||
Other intangible assets, gross | 886 | 884 |
Other intangible assets, accumulated amortization | 224 | 209 |
Other intangible assets, net | $ 662 | $ 675 |
Employee Retirement Plans (Net
Employee Retirement Plans (Net Periodic Benefit Expense) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Pension Benefits [Member] | ||
Service cost | $ 25 | $ 24 |
Interest cost | 32 | 31 |
Expected return on plan assets | (47) | (43) |
Amortization of prior service cost (credit) | 2 | 1 |
Total net periodic benefit cost | 12 | 13 |
Postretirement Benefits [Member] | ||
Service cost | 3 | 3 |
Interest cost | 6 | 7 |
Amortization of prior service cost (credit) | (1) | (1) |
Total net periodic benefit cost | $ 8 | $ 9 |
Other Liabilities (Other Liabil
Other Liabilities (Other Liabilities) (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 | |
Other Liabilities [Abstract] | |||
Wages and employee benefits | $ 374 | $ 620 | |
Income taxes | 192 | 148 | |
Derivative instruments | 179 | 41 | |
Asbestos and other litigation (Note 3) | 122 | 42 | |
Other current liabilities | 584 | 540 | |
Other accrued liabilities | 1,451 | 1,391 | |
Defined benefit pension plan liabilities | 724 | 713 | |
Derivative instruments | 830 | 333 | |
Asbestos and other litigation (Note 3) | 330 | 338 | |
Investment in Hemlock Semiconductor Group ("HSG") | [1] | 66 | 105 |
Customer deposits (Note 2) | 682 | 382 | |
Deferred tax liabilities | 514 | 451 | |
Other non-current liabilities | 651 | 695 | |
Other liabilities | $ 3,797 | $ 3,017 | |
[1] | The negative carrying value resulted from a one-time charge to this entity in 2014 for the permanent abandonment of certain assets. |
Hedging Activities (Narrative)
Hedging Activities (Narrative) (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Derivative Asset, Notional Amount | $ 16,574 | $ 15,718 |
Gross Notional Value, Translated Earnings Contracts [Member] | ||
Derivative Asset, Notional Amount | 14,300 | 14,300 |
Gross Notional Value, Collar Options [Member] | ||
Derivative Asset, Notional Amount | 1,200 | 1,300 |
Gross Notional Value, Foreign Exchange Forward [Member] | ||
Derivative Asset, Notional Amount | 13,100 | 13,000 |
Gross Notional Value, Foreign Exchange Forward [Member] | Not Designated as Hedging Instrument [Member] | ||
Derivative Asset, Notional Amount | $ 11,000 | $ 11,700 |
Hedging Activities (Summary of
Hedging Activities (Summary of Notional Amounts and Respective Fair Values of Derivative Financial Instruments) (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 | |
Notional amount | $ 16,574 | $ 15,718 | |
Asset derivatives, fair value | 197 | 265 | |
Liability derivatives, fair value | (952) | (374) | |
Foreign Exchange Contract [Member] | Other Assets [Member] | |||
Asset derivatives, fair value | 3 | 1 | |
Foreign Exchange Contract [Member] | Designated as Hedging Instrument [Member] | |||
Notional amount | [1] | 313 | 294 |
Foreign Exchange Contract [Member] | Designated as Hedging Instrument [Member] | Other Current Assets [Member] | |||
Asset derivatives, fair value | [1] | 16 | 20 |
Foreign Exchange Contract [Member] | Not Designated as Hedging Instrument [Member] | |||
Notional amount | 1,431 | 599 | |
Foreign Exchange Contract [Member] | Not Designated as Hedging Instrument [Member] | Other Current Assets [Member] | |||
Asset derivatives, fair value | 3 | 2 | |
Foreign Exchange Contract [Member] | Not Designated as Hedging Instrument [Member] | Other Accrued Liabilities [Member] | |||
Liability derivatives, fair value | (14) | (7) | |
Interest Rate Swap [Member] | Designated as Hedging Instrument [Member] | |||
Notional amount | 550 | 550 | |
Interest Rate Swap [Member] | Designated as Hedging Instrument [Member] | Other Liabilities [Member] | |||
Liability derivatives, fair value | (11) | (8) | |
Translated Earnings Contracts [Member] | Other Assets [Member] | |||
Asset derivatives, fair value | 69 | 66 | |
Translated Earnings Contracts [Member] | Other Liabilities [Member] | |||
Liability derivatives, fair value | (819) | (325) | |
Translated Earnings Contracts [Member] | Not Designated as Hedging Instrument [Member] | |||
Notional amount | 14,280 | 14,275 | |
Translated Earnings Contracts [Member] | Not Designated as Hedging Instrument [Member] | Other Current Assets [Member] | |||
Asset derivatives, fair value | 106 | 176 | |
Translated Earnings Contracts [Member] | Not Designated as Hedging Instrument [Member] | Other Accrued Liabilities [Member] | |||
Liability derivatives, fair value | $ (108) | $ (34) | |
[1] | Cash flow hedges with a typical duration of 24 months or less. |
Hedging Activities (Effect on C
Hedging Activities (Effect on Consolidated Financial Statements) (Details) - Cash Flow Hedging [Member] - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | ||
Gain recognized in other comprehensive income (OCI) | $ 2 | $ 23 | |
Gain/(loss) reclassified from accumulated OCI into income (effective) | 4 | (6) | [1] |
Foreign Exchange Contract [Member] | |||
Gain recognized in other comprehensive income (OCI) | 2 | 23 | |
Foreign Exchange Contract [Member] | Cost of Sales [Member] | |||
Gain/(loss) reclassified from accumulated OCI into income (effective) | $ 4 | $ (6) | [1] |
[1] | The amount of hedge ineffectiveness at March 31, 2018 and 2017 was insignificant. |
Hedging Activities (Effect on49
Hedging Activities (Effect on Consolidated Financial Statements) (Details) - Not Designated as Hedging Instrument [Member] - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Gain (loss) recognized in income | $ (641) | $ (436) |
Foreign Exchange Contracts, Balance Sheet [Member] | Foreign Currency Transaction and Hedge Gain (Loss), Net [Member] | ||
Gain (loss) recognized in income | (19) | 2 |
Translated Earnings Contracts [Member] | Foreign Currency Transaction and Hedge Gain (Loss), Net [Member] | ||
Gain (loss) recognized in income | $ (622) | $ (438) |
Fair Value Measurements (Narrat
Fair Value Measurements (Narrative) (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Fair Value Measurements [Abstract] | ||
Business Combination, Contingent Consideration, Asset | $ 300 | $ 300 |
Liabilities, Fair Value Disclosure, Nonrecurring | 0 | 0 |
Assets, Fair Value Disclosure, Nonrecurring | $ 0 | $ 0 |
Fair Value Measurements (Major
Fair Value Measurements (Major Categories of Financial Assets and Liabilities Measured on a Recurring Basis) (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 | |||
Other current assets | $ 125 | [1] | $ 497 | [2],[3] | |
Other assets | 72 | [1] | 68 | [3] | |
Other accrued liabilities | 122 | [1] | 44 | [2],[3] | |
Other liabilities | 850 | [1],[4] | 353 | [2],[3] | |
Significant Other Observable Inputs (Level 2) [Member] | |||||
Other current assets | 125 | [1] | 197 | [2],[3] | |
Other assets | 72 | [1] | 68 | [3] | |
Other accrued liabilities | 122 | [1] | 42 | [2],[3] | |
Other liabilities | 830 | [1],[4] | 333 | [2],[3] | |
Significant Unobservable Inputs (Level 3) [Member] | |||||
Other current assets | [2],[3] | 300 | |||
Other accrued liabilities | [2],[3] | 2 | |||
Other liabilities | 20 | [1],[4] | 20 | [2],[3] | |
Other Current Assets [Member] | |||||
Contingent consideration | 300 | ||||
Other Accrued Liabilities [Member] | |||||
Contingent consideration | 2 | ||||
Other Liabilities [Member] | |||||
Contingent consideration | $ 20 | $ 20 | |||
[1] | Derivative assets and liabilities include foreign exchange contracts which are measured using observable quoted prices for similar assets and liabilities. | ||||
[2] | At December 31, 2017, other current assets, other accrued liabilities and other liabilities include contingent consideration that was measured using unobservable (level 3) inputs, in the amounts of $300 million, $2 million and $20 million, respectively. | ||||
[3] | Derivative assets and liabilities include foreign exchange contracts which are measured using observable quoted prices for similar assets and liabilities. | ||||
[4] | At March 31, 2018, other liabilities include contingent consideration that was measured using unobservable (level 3) inputs, in the amount of $20 million. |
Shareholders' Equity (Narrative
Shareholders' Equity (Narrative) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | ||||
Mar. 31, 2018 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2017 | Apr. 26, 2018 | Dec. 31, 2016 | |
Preferred Stock, Par or Stated Value Per Share | $ 100 | $ 100 | ||||
Treasury Stock, Shares, Acquired | 84,400,000 | |||||
Treasury Stock, Value, Acquired | $ 2.4 | |||||
Payments for Repurchase of Common Stock | $ 800 | $ 400 | ||||
The 2016 Repurchase Program [Member] | ||||||
Stock Repurchase Program, Authorized Amount | $ 4,000 | |||||
The 2016 Repurchase Program [Member] | Open Market [Member] | ||||||
Treasury Stock, Shares, Acquired | 27,100,000 | |||||
Treasury Stock, Value, Acquired | $ 814.3 | |||||
The 2015 and 2016 Repurchase Program [Member] | Open Market [Member] | ||||||
Treasury Stock, Shares, Acquired | 50,100,000 | |||||
Treasury Stock, Value, Acquired | $ 1,400 | |||||
The 2017 ASR Agreement [Member] | ||||||
Treasury Stock, Shares, Acquired | 17,200,000 | 17,100,000 | ||||
Payments for Repurchase of Common Stock | $ 500 | $ 500 | ||||
The 2018 Repurchase Program [Member] | Subsequent Event [Member] | ||||||
Stock Repurchase Program, Authorized Amount | $ 2,000 | |||||
Common Stock [Member] | ||||||
Convertible Preferred Stock, Shares Issued upon Conversion | 50,000 | |||||
Series A Convertible Preferred Stock [Member] | Samsung Corning Precision Materials Co., Ltd. [Member] | ||||||
Convertible Preferred Stock, Shares Issued upon Conversion | 2,300 |
Shareholders' Equity (Accumulat
Shareholders' Equity (Accumulated Other Comprehensive Income (Loss)) (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | ||
Balance | $ 15,770 | ||
Net current-period other comprehensive income | 265 | $ 480 | |
Balance | 14,488 | ||
Accumulated Foreign Currency Adjustment Attributable to Parent [Member] | |||
Balance | [1] | (529) | (1,275) |
Other comprehensive income | [1],[2] | 260 | 434 |
Equity method affiliates | [1],[3] | 4 | 16 |
Net current-period other comprehensive income | [1] | 264 | 450 |
Balance | [1] | (265) | (825) |
Other Comprehensive Income, Tax | $ 10 | $ 57 | |
[1] | All amounts are after tax. Amounts in parentheses indicate debits to accumulated other comprehensive loss. | ||
[2] | For the three months ended March 31, 2018 and 2017, amounts are net of tax expense of $10 million and $57 million, respectively. | ||
[3] | Tax effects are not significant. |
Reportable Segments (Narrative)
Reportable Segments (Narrative) (Details) | 3 Months Ended |
Mar. 31, 2018item | |
Reportable Segments [Abstract] | |
Number of Material Formulations | 150 |
Segment tax rate | 21.00% |
Reportable Segments (Reportable
Reportable Segments (Reportable Segments) (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | ||
Net sales | $ 2,500 | $ 2,375 | |
Depreciation | 304 | 260 | |
Research, development and engineering expenses | 241 | 202 | |
Income tax (provision) benefit | (124) | 66 | |
Net (loss) income | (589) | 86 | |
Operating Segments [Member] | |||
Net sales | 2,513 | 2,421 | |
Depreciation | [1] | 283 | 258 |
Research, development and engineering expenses | [2] | 202 | 175 |
Income tax (provision) benefit | (92) | (113) | |
Net (loss) income | [3] | 345 | 420 |
Display Technologies [Member] | Operating Segments [Member] | |||
Net sales | 745 | 782 | |
Depreciation | [1] | 144 | 129 |
Research, development and engineering expenses | [2] | 23 | 19 |
Income tax (provision) benefit | (49) | (65) | |
Net (loss) income | [3] | 185 | 245 |
Optical Communications [Member] | Operating Segments [Member] | |||
Net sales | 886 | 818 | |
Depreciation | [1] | 52 | 45 |
Research, development and engineering expenses | [2] | 49 | 37 |
Income tax (provision) benefit | (30) | (30) | |
Net (loss) income | [3] | 109 | 110 |
Specialty Materials [Member] | Operating Segments [Member] | |||
Net sales | 278 | 300 | |
Depreciation | [1] | 33 | 29 |
Research, development and engineering expenses | [2] | 39 | 36 |
Income tax (provision) benefit | (12) | (15) | |
Net (loss) income | [3] | 46 | 57 |
Environmental Technologies [Member] | Operating Segments [Member] | |||
Net sales | 322 | 275 | |
Depreciation | [1] | 29 | 31 |
Research, development and engineering expenses | [2] | 29 | 25 |
Income tax (provision) benefit | (14) | (12) | |
Net (loss) income | [3] | 52 | 44 |
Life Sciences [Member] | Operating Segments [Member] | |||
Net sales | 232 | 210 | |
Depreciation | [1] | 14 | 12 |
Research, development and engineering expenses | [2] | 5 | 6 |
Income tax (provision) benefit | (7) | (6) | |
Net (loss) income | [3] | 27 | 24 |
All Other [Member] | Operating Segments [Member] | |||
Net sales | 50 | 36 | |
Depreciation | [1] | 11 | 12 |
Research, development and engineering expenses | [2] | 57 | 52 |
Income tax (provision) benefit | 20 | 15 | |
Net (loss) income | [3] | $ (74) | $ (60) |
[1] | Depreciation expense for Corning's reportable segments includes an allocation of depreciation of corporate property not specifically identifiable to a segment. | ||
[2] | Research, development and engineering expenses include direct project spending that is identifiable to a segment. | ||
[3] | Many of Corning's administrative and staff functions are performed on a centralized basis. Where practicable, Corning charges these expenses to segments based upon the extent to which each business uses a centralized function. Other staff functions, such as corporate finance, human resources and legal, are allocated to segments, primarily as a percentage of sales. Expenses that are not allocated to the segments are included in the reconciliation of reportable segment net income to consolidated net (loss) income below. |
Reportable Segments (Reconcilia
Reportable Segments (Reconciliation of Reportable Segment and All Other Net Sales to Consolidated Net Sales) (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | ||
Reportable Segments [Abstract] | |||
Net sales of reportable segments and All Other | $ 2,513 | $ 2,421 | |
Impact of foreign currency movements not included in segment net sales | [1] | (13) | (46) |
Net sales | $ 2,500 | $ 2,375 | |
[1] | This amount primarily represents the impact of foreign currency adjustments in the Display Technologies segment. |
Reportable Segments (Reconcil57
Reportable Segments (Reconciliation of Reportable Segment Net Income to Consolidated Net Income) (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Impact of foreign currency movements not included in segment net income (loss) | $ (31) | $ (37) | |
Research, development and engineering expenses | 241 | 202 | |
Equity in earnings of affiliated companies | 39 | 80 | |
Income tax (provision) benefit | (124) | 66 | |
Net (loss) income | (589) | 86 | |
Operating Segments [Member] | |||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Research, development and engineering expenses | [1] | 202 | 175 |
Income tax (provision) benefit | (92) | (113) | |
Net (loss) income | [2] | 345 | 420 |
Operating Segments [Member] | Reportable Segments [Member] | |||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Net (loss) income | 419 | 480 | |
Operating Segments [Member] | Non Reportable Segments [Member] | |||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Net (loss) income | (74) | (60) | |
Segment Reconciling Items [Member] | |||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Unrealized loss on foreign currency hedges related to translated earnings | (622) | (438) | |
Litigation expense | (136) | (3) | |
Research, development and engineering expenses | 39 | 27 | |
Equity in earnings of affiliated companies | [3] | 37 | 79 |
Income tax (provision) benefit | (32) | 179 | |
Other corporate items | $ (37) | $ 71 | |
[1] | Research, development and engineering expenses include direct project spending that is identifiable to a segment. | ||
[2] | Many of Corning's administrative and staff functions are performed on a centralized basis. Where practicable, Corning charges these expenses to segments based upon the extent to which each business uses a centralized function. Other staff functions, such as corporate finance, human resources and legal, are allocated to segments, primarily as a percentage of sales. Expenses that are not allocated to the segments are included in the reconciliation of reportable segment net income to consolidated net (loss) income below. | ||
[3] | Primarily represents the equity earnings of HSG. |