Note 16 - Shareholders' Equity

12 Months Ended

Dec. 31, 2022

Notes to Financial Statements

Stockholders' Equity Note Disclosure [Text Block]

16.  Shareholders’ Equity

Common Stock Dividends 

On February 8, 2023, Corning’s Board of Directors declared a $0.28 per share common stock dividend.

Fixed Rate Cumulative Convertible Preferred Stock, Series A

The Company had 2,300 outstanding shares of Fixed Rate Cumulative Convertible Preferred Stock, Series A (the “Preferred Stock”) as of December 31, 2020. On January 16, 2021, the Preferred Stock became convertible into 115 million common shares. On April 5, 2021 Corning and Samsung Display Co., Ltd. (“SDC”) executed the Share Repurchase Agreement (“SRA”), and the Preferred Stock was fully converted as of April 8, 2021. 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 both April 8, 2022 and 2021. The remaining payment of approximately $507 million will be paid on April 8, 2023. 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 April 8, 2021.

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. These common shares 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, 2022 and 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.

Share Repurchase Program

In 2019, the Board authorized the repurchase of up to $5.0 billion of additional common stock upon the completion of the 2018 repurchase plan (“2019 Authorization”).

In addition to the common shares repurchased under the SRA as discussed above, the Company repurchased 6.0 million, 7.3 million and 4.1 million shares of common stock under its 2019 Authorization for approximately $221 million, $274 million and $105 million, respectively, during the years ended December 31, 2022, 2021 and 2020, respectively.

As of December 31, 2022, approximately $3.3 billion remains available under the Company’s 2019 Authorization.

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

	Common stock						Treasury stock
	Shares			Par value			Shares			Cost
Balance as of 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 as of 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 as of December 31, 2021		1,815		$	907			(970	)	$	(20,263	)
Shares issued to benefit plans and for option exercises		5			3
Shares purchased for treasury								(6	)		(221	)
Other, net (1)								(1	)		(48	)
Balance as of December 31, 2022		1,820		$	910			(977	)	$	(20,532	)

(1) Includes the deemed surrender to the Company of common stock to satisfy employee tax withholding obligations

Accumulated Other Comprehensive Loss 

The following table presents the changes in the components of accumulated other comprehensive loss, including the proportionate share of equity method investee’s accumulated other comprehensive loss (in millions) ⁽¹⁾:

	Foreign currency translation adjustments and other			Unamortized actuarial gains (losses) and prior service (costs) credits			Net unrealized losses on investments			Realized and unrealized (losses) gains on derivatives			Accumulated other comprehensive loss
Balance as of December 31, 2019	$	(857	)	$	(362	)	$	(3	)	$	51		$	(1,171	)
Other comprehensive income (loss) before reclassifications (2)	$	511		$	(106	)				$	(14	)	$	391
Amounts reclassified from accumulated other comprehensive income (5)					18						5			23
Equity method affiliates (6)		17												17
Net current-period other comprehensive income (loss)		528			(88	)		—			(9	)		431
Balance as of December 31, 2020	$	(329	)	$	(450	)	$	(3	)	$	42		$	(740	)
Other comprehensive (loss) income before reclassifications (3)	$	(582	)	$	178					$	43		$	(361	)
Amounts reclassified from accumulated other comprehensive loss (5)											(52	)		(52	)
Equity method affiliates (6)		(22	)											(22	)
Net current-period other comprehensive (loss) income		(604	)		178			—			(9	)		(435	)
Balance as of December 31, 2021	$	(933	)	$	(272	)	$	(3	)	$	33		$	(1,175	)
Other comprehensive (loss) income before reclassifications (4)	$	(762	)	$	151					$	31		$	(580	)
Amounts reclassified from accumulated other comprehensive income (loss) (5)					3						(61	)		(58	)
Equity method affiliates (6)		(17	)											(17	)
Net current-period other comprehensive (loss) income		(779	)		154			—			(30	)		(655	)
Balance as of December 31, 2022	$	(1,712	)	$	(118	)	$	(3	)	$	3		$	(1,830	)

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

(2) 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.

(3) 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.

(4) Amounts are net of total tax benefit of $22 million, primarily driven by $29 million and $24 million related to foreign currency translation adjustments and the hedging component, respectively, offset by negative impacts of $31 million related to retirement plans.

(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.

The following table presents reclassifications out of accumulated other comprehensive income (“AOCI”) by component (in millions) ⁽¹⁾:

	Amount reclassified from AOCI									Affected line item
	Year ended December 31,									in the consolidated
Details about AOCI Components	2022			2021			2020			statements of income
Amortization of net actuarial loss	$	(4	)	$	(3	)	$	(23	)	(2)
Amortization of prior service credit					3					(2)
		(4	)		—			(23	)	Total before tax
		1						5		Tax benefit
	$	(3	)	$	—		$	(18	)	Net of tax
Realized gains (losses) on designated hedges	$	52		$	14		$	(6	)	Sales
		32			39			13		Cost of sales
		(3	)					(14	)	Other expense, net
		81			53			(7	)	Total before tax
		(20	)		(1	)		2		Tax (expense) benefit
	$	61		$	52		$	(5	)	Net of tax
Total reclassifications for the period	$	58		$	52		$	(23	)	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 12 (Employee Retirement Plans) in the notes to the consolidated financial statements for additional details.