Note 15 - Shareholders' Equity

6 Months Ended

Jun. 30, 2016

Notes to Financial Statements

Stockholders' Equity Note Disclosure [Text Block]

15.      Shareholders’ Equity

Fixed Rate Cumulative Convertible Preferred Stock, Series A

On January 15, 2014, Corning designated a new series of its preferred stock as Fixed Rate Cumulative Convertible Preferred Stock, Series A, par value $100 per share, and issued 2,300 shares of Preferred Stock at an issue price of $1 million per share, for an aggregate issue price of $2.3 billion.  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 June 30, 2016, the Preferred Stock has not been converted, and none of the anti-dilution provisions have been triggered.

Share Repurchases

On July 15, 2015, Corning’s Board of Directors approved a $2 billion share repurchase program (the “July 2015 Repurchase Program”) and on October 26, 2015 the Board of Directors authorized an additional $4 billion share repurchase program (together with the July 2015 Repurchase Program, the “2015 Repurchase Program”).  The 2015 Repurchase Program permits Corning to effect repurchases from time to time through a combination of open market repurchases, privately negotiated transactions, accelerated repurchase agreements and/or other arrangements.

On October 28, 2015, Corning entered into an accelerated share repurchase agreement (“ASR”) with Morgan Stanley & Co. LLC (“Morgan Stanley”) to repurchase $1.25 billion of Corning’s common stock (the “2015 ASR agreement”).  The 2015 ASR agreement was executed under the July 2015 Repurchase Program.  On January 19, 2016, the 2015 ASR agreement was completed and Corning received an additional 15.9 million shares on January 22, 2016 to settle the 2015 ASR agreement.

In addition to the shares repurchased through the 2015 ASR agreement, during the three and six months ended June 30, 2016, we repurchased 40.9 million and 80.7 million shares of common stock for $810 million and $1,561 million, respectively, as part of the 2015 Repurchase Program.

Accumulated Other Comprehensive Income

In the three and six months ended June 30, 2016 and 2015, the primary changes in accumulated other comprehensive income (“AOCI”) were related to the foreign currency translation adjustment component and the unamortized actuarial losses component.

A summary of changes in the foreign currency translation adjustment component of AOCI is as follows (in millions):

	Three months ended June 30,				Six months ended June 30,
	2016		2015		2016		2015
Beginning balance	$	(743)	$	(837)	$	(1,171)	$	(581)
Other comprehensive income (loss)		240		(62)		625		(236)
Equity method affiliates		(44)		22		(1)		(60)
Net current-period other comprehensive income		196		(40)		624		(296)
Ending balance	$	(547)	$	(877)	$	(547)	$	(877)

In the second quarter of 2016, $45 million cumulative foreign currency translation gain was released as a result of the realignment of Dow Corning and included in the gain on realignment of equity investment.

In the second quarter of 2016, a $22 million cumulative foreign currency translation loss was released as a result of the contribution of our investment in PCE to the PCC litigation trust and included in selling, general and administrative expenses.

There were no material tax effects related to foreign currency translation gains and losses.

A summary of changes in the unamortized actuarial gains (losses) component of AOCI is as follows (in millions)

(1):

	Three months ended June 30,				Six months ended June 30,
	2016		2015		2016		2015
Beginning balance	$	(588)	$	(708)	$	(588)	$	(709)
Other comprehensive income (loss) before reclassifications  (2)		(29)		(9)		(35)
Amounts reclassified from accumulated other comprehensive income  (2)		29		8		36		10
Equity method affiliates  (3)		265		6		264		(4)
Net current-period other comprehensive income		265		5		265		6
Ending balance	$	(323)	$	(703)	$	(323)	$	(703)

(1) All amounts are after tax.  Amounts in parentheses indicate debits to accumulated other comprehensive income.

(2) Tax effects are not significant.

(3) For the three and six months ended June 30, 2016, amounts are net of total tax expense of $(19) million.  For the three and six months ended June 30, 2015, tax effects are not significant.

In the second quarter of 2016, a $260 million cumulative unamortized actuarial loss, net of tax of $19 million, was released as a result of the realignment of Dow Corning and included in the gain on realignment of equity investment.

In the second quarter of 2016, a $2 million cumulative unamortized actuarial loss was released as a result of the contribution of our investment in PCE to the PCC litigation trust and included in selling, general and administrative expenses.