Note 11 - Financial Instruments

3 Months Ended

Mar. 31, 2024

Notes to Financial Statements

Derivative Instruments and Hedging Activities Disclosure [Text Block]

11. Financial Instruments

The following table summarizes the notional amounts and respective fair values of Corning’s derivative financial instruments on a gross basis (in millions):

	March 31, 2024							December 31, 2023
	Notional amount		Fair value asset (1)		Fair value liability (1)			Notional amount		Fair value asset (1)		Fair value liability (1)
Derivatives designated as hedging instruments (2):
Foreign exchange and precious metals lease contracts (3)	$	236	$	245				$	241	$	287
Derivatives not designated as hedging instruments:
Foreign exchange contracts		2,780		20	$	(34	)		1,988		20	$	(17	)
Translated earnings contracts		5,390		360		(150	)		5,042		324		(80	)
Total derivatives	$	8,406	$	625	$	(184	)	$	7,271	$	631	$	(97	)
Current			$	521	$	(122	)			$	501	$	(66	)
Non-current				104		(62	)				130		(31	)
Total derivatives			$	625	$	(184	)			$	631	$	(97	)

(1)	All of the Company’s derivative contracts are measured at fair value and are classified as Level 2 within the fair value hierarchy. Derivative assets are presented in Other current assets or Other assets. Derivative liabilities are presented in Other current liabilities or Other liabilities.
(2)	The amounts above do not include €850 million of euro-denominated debt ($911 million equivalent as of March 31, 2024), which is a non-derivative financial instrument designated as a net investment hedge.
(3)	As of  March 31, 2024 and December 31, 2023, derivatives designated as hedging instruments include foreign exchange cash flow hedges with total notional amounts of $236 million and $241 million, respectively, and fair value hedges of leased precious metals with total notional amounts of 16,862 troy ounces and 20,160 troy ounces, respectively. Fair value assets include designated derivatives pertaining to precious metals lease contracts in the amounts of $184 million and $229 million as of  March 31, 2024 and December 31, 2023, respectively.

The following table summarizes the total gross notional values for translated earnings contracts (in millions):

	March 31,		December 31,
	2024		2023
Average rate forward contracts:
Chinese yuan-denominated	$	793	$	684
Japanese yen-denominated		408		463
South Korean won-denominated		1,417		1,609
Other foreign currencies (1)		487		198
Option contracts:
Japanese yen-denominated (2)		2,285		2,088
Total notional amount for translated earnings contracts	$	5,390	$	5,042

(1)	Denominational currencies for other average rate forward contracts include the New Taiwan dollar and euro.
(2)	Japanese yen-denominated option contracts include purchased put options and zero-cost collars. With respect to the zero-cost collars, the gross notional amount includes the value of 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 effect in the consolidated statements of income relating to Corning’s derivative financial instruments (in millions).  The accumulated derivative gain included in accumulated other comprehensive loss on the consolidated balance sheets as of March 31, 2024 and December 31, 2023 is $81 million and $54 million, respectively.

	Three months ended March 31,
					Location of gain (loss)
	Gain recognized				reclassified from	Gain (loss) reclassified
	in other comprehensive				accumulated	from accumulated
	income (OCI)				OCI into income	OCI into income
	2024		2023		effective (ineffective)	2024		2023
Derivative hedging relationships for cash flow and fair value hedges:
Foreign exchange and precious metals lease contracts	$	33	$	32	Cost of sales	$	6	$	7
					Other income, net				(1	)
Total cash flow and fair value hedges	$	33	$	32		$	6	$	6

	(Loss) gain recognized in income
	Three months ended
	March 31,
Undesignated derivatives	2024			2023			Location of gain (loss) recognized in income
Foreign exchange contracts	$	(22	)	$	13		Other income, net
Translated earnings contracts		39			(8	)	Translated earnings contract gain (loss), net
Total undesignated	$	17		$	5

Net Investment Hedges

In May 2023, the Company designated the full amount of its 2026 Notes and 2031 Notes with a total notional amount of €850 million, which are non-derivative financial instruments, as net investment hedges against our investments in certain European subsidiaries with euro functional currencies. As of March 31, 2024, the net investment hedges are deemed to be effective. During the three months ended March 31, 2024, foreign currency gain of $22 million associated with these net investment hedges were recognized in other comprehensive loss.

Leased Precious Metals Contracts

The carrying amount of the leased precious metals pool, which is included within property, plant and equipment, net of accumulated depreciation in the consolidated balance sheets, is $80 million and $90 million, respectively, as of  March 31, 2024 and December 31, 2023. The carrying amount of the leased precious metals pool includes cumulative fair value loss of $191 million and $239 million as of  March 31, 2024 and December 31, 2023, respectively. These losses are offset by changes in the fair value of the hedges.