Note 17 - Shareholders' Equity

12 Months Ended

Dec. 31, 2021

Notes to Financial Statements

Stockholders' Equity Note Disclosure [Text Block]

17.  Shareholders’ Equity

Common Stock Dividends 

On February 2, 2022, Corning’s Board of Directors declared a 13% increase in the Company’s quarterly common stock dividend, which increased the quarterly dividend from $0.24 to $0.27 per share of common stock, beginning with the dividend paid in the first quarter of 2022. This increase marks the eleventh dividend increase since October 2011.

On February 3, 2021, Corning’s Board of Directors declared a 9% increase in the Company’s quarterly common stock dividend, which increased the quarterly dividend from $0.22 to $0.24 per share of common stock, beginning with the dividend paid in the first quarter of 2021. 

On February 5, 2020, Corning’s Board of Directors declared a 10% increase in the Company’s quarterly common stock dividend, which increased the quarterly dividend from $0.20 to $0.22 per share of common stock, beginning with the dividend paid in the first quarter of 2020.

Fixed Rate Cumulative Convertible Preferred Stock, Series A

As of December 31, 2020, Corning had 2,300 outstanding shares of Preferred Stock.   

On January 16, 2021, the Preferred Stock became convertible into 115 million Common Shares, in whole or in part, at the option of Samsung Display Co., Ltd. ("SDC").  On April 5, 2021, Corning and SDC executed the Share Repurchase Agreement ("SRA"). 

Pursuant to the SRA, on the Initial Closing Date, the Preferred Stock was fully converted.  Immediately following the conversion, Corning repurchased and retired 35 million of the Common Shares held by SDC for an aggregate purchase price of approximately $1.5 billion, of which approximately $507 million was paid on the Initial Closing Date. Subsequent payments of approximately $507 million will be paid on each of the first and second anniversaries of the Initial Closing Date.

• The 35 million Common Shares repurchased by Corning were excluded from the weighted-average common shares outstanding for the calculation of the Company’s basic and diluted earnings per share starting on the Initial Closing Date.

• The Common Shares repurchased were accounted for as a redemption of Preferred Stock. The excess of the $1.5 billion consideration paid over the carrying value of the Preferred Stock reduced the net income available to common shareholders by $803 million.

The remaining 80 million Common Shares were accounted for as a conversion of Preferred Stock and resulted in an increase of common stock and additional paid-in-capital based on the carrying value of the Preferred Stock and were included in the weighted-average common shares outstanding for the calculation of the Company’s basic and diluted earnings per share.

Pursuant to the SRA, with respect to the 80 million Common Shares outstanding held by SDC:

• SDC has the option to sell an additional 22 million Common Shares to Corning in specified tranches from time to time in calendar years 2024 through 2027.  Corning may, at its sole discretion, elect to repurchase such Common Shares. If Corning elects not to repurchase the Common Shares and SDC sells the Common Shares on the open market, Corning will be required to pay SDC a make-whole payment, subject to a 5% cap of the repurchase proceeds that otherwise would have been paid by Corning. As of December 31, 2021, the fair value of the option was $17 million when measured using significant other observable inputs.

• The remaining 58 million shares of Common Shares are subject to a seven-year lock-up period expiring in 2027.

Refer to Note 16 (Fair Value Measurements) to the consolidated financial statements for additional information

Share Repurchases

2021 Share Repurchases

For the year ended December 31, 2021, the Company repurchased 7.3 million shares of common stock on the open market for approximately $274 million, as part of its 2019 Repurchase Program.

On April 8, 2021, the Company repurchased 35 million shares of common stock, under the 2018 and 2019 Repurchase Programs, for an aggregate purchase price of approximately $1.5 billion, of which approximately $507 million was paid on the Initial Closing Date. Subsequent payments of approximately $507 million will be paid on each of the first and second anniversaries of the Initial Closing Date.  These shares were repurchased immediately following the conversion of the Preferred Stock, as discussed above.

2020 Share Repurchases

For the year ended December 31, 2020, the Company repurchased 4.1 million shares of common stock on the open market for approximately $105 million, as part of its 2018 Repurchase Program.

2019 Share Repurchases

On April 26, 2018, Corning’s Board of Directors approved a $2 billion share repurchase program with no expiration date (the “2018 Repurchase Program”). On July 17, 2019, Corning’s Board of Directors authorized $5 billion in share repurchases with no expiration date (the “2019 Repurchase Program”). During the year ended December 31, 2019, the Company repurchased 31.0 million shares of common stock on the open market for approximately $925 million as part of its 2018 Repurchase Program.

The following table presents changes in capital stock (in millions):

	Common stock						Treasury stock
	Shares			Par value			Shares			Cost
Balance at December 31, 2018		1,713		$	857			(925	)	$	(18,870	)
Shares issued to benefit plans and for option exercises		5			2
Shares purchased for treasury								(31	)		(925	)
Other, net (1)											(17	)
Balance at December 31, 2019		1,718		$	859			(956	)	$	(19,812	)
Shares issued to benefit plans and for option exercises		8			4
Shares purchased for treasury								(4	)		(105	)
Other, net (1)								(1	)		(11	)
Balance at December 31, 2020		1,726		$	863			(961	)	$	(19,928	)
Shares issued to benefit plans and for option exercises		9			4
Shares purchased for treasury								(7	)		(274	)
Conversion of preferred stock to common stock		115			58
Repurchase of converted common stock		(35	)		(18	)
Other, net (1)								(2	)		(61	)
Balance at December 31, 2021		1,815		$	907			(970	)	$	(20,263	)

(1) Consists of tax withholdings on share repurchases.

Accumulated Other Comprehensive Loss 

A summary of changes in the components of accumulated other comprehensive loss, including the proportionate share of equity method investee’s accumulated other comprehensive loss, is as follows (in millions) ⁽¹⁾:

	Foreign currency translation adjustments and other			Unamortized actuarial gains (losses) and prior service (costs) credits			Net unrealized gains (losses) on investments			Net unrealized gains (losses) on designated hedges			Accumulated other comprehensive loss
Balance at December 31, 2018	$	(714	)	$	(298	)	$	(4	)	$	6		$	(1,010	)
Other comprehensive (loss) income before reclassifications (2)	$	(129	)	$	(79	)	$	1		$	54		$	(153	)
Amounts reclassified from accumulated other comprehensive income (loss) (5)					15						(9	)		6
Equity method affiliates (6)		(14	)											(14	)
Net current-period other comprehensive (loss) income		(143	)		(64	)		1			45			(161	)
Balance at December 31, 2019	$	(857	)	$	(362	)	$	(3	)	$	51		$	(1,171	)
Other comprehensive income (loss) before reclassifications (3)	$	511		$	(106	)				$	(14	)	$	391
Amounts reclassified from accumulated other comprehensive income (loss) (5)					18						5			23
Equity method affiliates (6)		17												17
Net current-period other comprehensive income (loss)		528			(88	)					(9	)		431
Balance at December 31, 2020	$	(329	)	$	(450	)	$	(3	)	$	42		$	(740	)
Other comprehensive (loss) income before reclassifications (4)	$	(582	)	$	178					$	43		$	(361	)
Amounts reclassified from accumulated other comprehensive (loss) income (5)											(52	)		(52	)
Equity method affiliates (6)		(22	)											(22	)
Net current-period other comprehensive (loss) income		(604	)		178						(9	)		(435	)
Balance at December 31, 2021	$	(933	)	$	(272	)	$	(3	)	$	33		$	(1,175	)

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

(2) Amounts are net of total tax benefit of $8 million, primarily driven by $7 million related to foreign currency translation adjustments; embedded in this number is the negative impact of $18 million related to the hedging component, offset by the positive impact of $19 million related to retirement plans.

(3) Amounts are net of total tax expense of $22 million, primarily driven by $55 million related to foreign currency translation adjustments; embedded in this number are positive impacts of $5 million related to the hedging component and $28 million related to retirement plans.

(4) Amounts are net of total tax expense of $4 million, primarily driven by $51 million related to retirement plans, offset by positive impacts of $44 million and $3 million related to foreign currency translation adjustments and the hedging component, respectively.

(5)	Tax effect of reclassifications are disclosed separately within the footnote.
(6)	Tax effects related to equity method affiliates are not significant in the reported periods.

(In millions)

Reclassifications Out of Accumulated Other Comprehensive Income ("AOCI") by Component (1)
	Amount reclassified from AOCI									Affected line item
	Year ended December 31,									in the consolidated
Details about AOCI Components	2021			2020			2019			statements of income
Amortization of net actuarial loss	$	(3	)	$	(23	)	$	(89	)	(2)
Amortization of prior service credit (cost)		3						1		(2)
					(23	)		(88	)	Total before tax
					5			73		Tax benefit (3)
	$	—		$	(18	)	$	(15	)	Net of tax
Realized gains (losses) on designated hedges	$	14		$	(6	)				Sales
		39			13		$	11		Cost of sales
					(14	)				Other expense, net
		53			(7	)		11		Total before tax
		(1	)		2			(2	)	Tax benefit (expense)
	$	52		$	(5	)	$	9		Net of tax
Total reclassifications for the period	$	52		$	(23	)	$	(6	)	Net of tax

(1) Amounts in parentheses indicate debits to the statement of income.

(2) These accumulated other comprehensive loss components are included in net periodic pension cost. Refer to Note 13 (Employee Retirement Plans) to the consolidated financial statements for additional details.

(3) Includes $52 million that was recognized during the first quarter of 2019 due to adoption of the new standard related to Income Statement - Reporting Comprehensive Income, which allows for reclassification from accumulated other comprehensive loss to retained earnings for stranded tax effects.