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x
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the fiscal year ended December 31, 2015
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the transition period from ___ to ___
|
|
Commission file number: 1-3247
|
NEW YORK
|
16-0393470
|
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
ONE RIVERFRONT PLAZA, CORNING, NY
|
14831
|
|
(Address of principal executive offices)
|
(Zip Code)
|
Title of each class
|
Name of each exchange on which registered
|
|
Common Stock, $0.50 par value per share
|
New York Stock Exchange
|
Yes
|
x
|
No
|
o
|
Yes
|
o
|
No
|
x
|
Yes
|
x
|
No
|
o
|
Yes
|
x
|
No
|
o
|
Large accelerated filer
|
x
|
Accelerated filer
|
o
|
|||
Non-accelerated filer
|
o
|
(Do not check if a smaller reporting company)
|
Smaller reporting company
|
o
|
Yes
|
o
|
No
|
x
|
·
|
EAGLE XG®, the industry’s first LCD glass substrate that is free of heavy metals;
|
·
|
EAGLE XG® Slim glass, a line of thin glass substrates which enables lighter-weight portable devices and thinner televisions and monitors;
|
·
|
Corning® Willow™ Glass, our ultra-thin flexible glass for use in next-generation consumer electronic technologies, including curved displays for immersive viewing or mounting on non-flat surfaces. This glass is also used in a variety of non-display applications, such as decorative laminates for interior architecture and advanced semiconductor packaging; and
|
·
|
The family of Corning Lotus™ Glass, high-performance display glass developed to enable cutting-edge technologies, including organic light-emitting diode (“OLED”) displays and next generation LCDs. These substrate glasses provide industry-leading levels of low total pitch variation, resulting in brighter, more energy-efficient displays with higher resolutions for consumers and better yields for panel makers.
|
·
|
General economic conditions in each country or region;
|
·
|
Many complex regulatory requirements affecting international trade and investment, including anti-dumping laws, export controls, the Foreign Corrupt Practices Act and local laws prohibiting improper payments. Our operations may be adversely affected by changes in the substance or enforcement of these regulatory requirements, and by actual or alleged violations of them;
|
·
|
Fluctuations in currency exchange rates, convertibility of currencies and restrictions involving the movement of funds between jurisdictions and countries;
|
·
|
Sovereign and political risks that may adversely affect Corning’s profitability and assets;
|
·
|
Geographical concentration of our factories and operations and regional shifts in our customer base;
|
·
|
Periodic health epidemic concerns;
|
·
|
Political unrest, confiscation or expropriation of our assets by foreign governments, terrorism and the potential for other hostilities;
|
·
|
Difficulty in protecting intellectual property, sensitive commercial and operations data, and information technology systems generally;
|
·
|
Differing legal systems, including protection and treatment of intellectual property and patents;
|
·
|
Complex or unclear tax regimes;
|
·
|
Complex tariffs, trade duties and other trade barriers including anti-dumping duties;
|
·
|
Difficulty in collecting obligations owed to us such as accounts receivable;
|
·
|
Natural disasters such as floods, earthquakes, tsunamis and windstorms; and
|
·
|
Potential power loss or disruption affecting manufacturing.
|
·
|
our ability to introduce advantaged products such as glass substrates for liquid crystal displays, optical fiber and cable and hardware and equipment, and environmental substrate and filter products at competitive prices;
|
·
|
our ability to manufacture glass substrates and strengthened glass, to satisfy our customers’ technical requirements and our contractual obligations; and
|
·
|
our ability to develop new products in response to government regulations and laws.
|
·
|
changes in the relative amounts of income before taxes in the various jurisdictions in which we operate that have differing statutory tax rates;
|
·
|
changes in tax treaties and regulations or the interpretation of them;
|
·
|
changes to our assessment about the realizability of our deferred tax assets that are based on estimates of our future results, the prudence and feasibility of possible tax planning strategies, and the economic environments in which we do business;
|
·
|
the outcome of current and future tax audits, examinations, or administrative appeals;
|
·
|
changes in generally accepted accounting principles that affect the accounting for taxes; and
|
·
|
limitations or adverse findings regarding our ability to do business in some jurisdictions.
|
(million square feet)
|
Total
|
Domestic
|
Foreign
|
||
Manufacturing
|
29.5
|
7.6
|
21.9
|
||
Sales and administrative
|
2.3
|
1.9
|
0.4
|
||
Research and development
|
2.2
|
1.9
|
0.3
|
||
Warehouse
|
2.3
|
1.7
|
0.6
|
||
Total
|
36.3
|
13.1
|
23.2
|
(a)
|
Corning Incorporated common stock is listed on the New York Stock Exchange. In addition, it is traded on the Boston, Midwest, Pacific and Philadelphia stock exchanges. Common stock options are traded on the Chicago Board Options Exchange. The ticker symbol for Corning Incorporated is “GLW.”
|
First
quarter
|
Second
quarter
|
Third
quarter
|
Fourth
quarter
|
||||||||
2015
|
|||||||||||
Price range
|
|||||||||||
High
|
$
|
25.16
|
$
|
22.98
|
$
|
20.02
|
$
|
19.29
|
|||
Low
|
$
|
21.89
|
$
|
19.57
|
$
|
15.24
|
$
|
16.36
|
|||
2014
|
|||||||||||
Price range
|
|||||||||||
High
|
$
|
20.99
|
$
|
22.20
|
$
|
22.37
|
$
|
23.52
|
|||
Low
|
$
|
16.55
|
$
|
20.17
|
$
|
19.23
|
$
|
17.03
|
(b)
|
Not applicable.
|
(c)
|
The following table provides information about our purchases of our common stock during the fiscal fourth quarter of 2015:
|
Period
|
Number
of shares
purchased
(1)
|
Average
price paid
per share
(1)
|
Number
of shares
purchased as
part of publicly
announced
plans or
programs
(2)
|
Approximate
dollar value of
shares that
may yet be
purchased
under the plans
or programs
(2)
|
|||
October 1-31, 2015
|
54,513,746
|
$18.77
|
54,500,524
|
$4,521,528,007
|
|||
November 1-30, 2015
|
10,654
|
$18.82
|
$4,521,528,007
|
||||
December 1-31, 2015
|
141,145
|
$18.42
|
$4,521,528,007
|
||||
Total at December 31, 2015
|
54,665,545
|
$18.77
|
54,500,524
|
$4,521,528,007
|
(1)
|
These columns reflect the following transactions during the fourth quarter of 2015: (i) the deemed surrender to us of 86,015 shares of common stock to satisfy tax withholding obligations in connection with the vesting of employee restricted stock units; (ii) the surrender to us of 79,006 shares of common stock to satisfy tax withholding obligations in connection with the vesting of restricted stock issued to employees; and (iii) the purchase of 54,500,524 shares of common stock in conjunction with the repurchase programs announced on July 15, 2015.
|
(2)
|
On July 15, 2015, Corning’s Board of Directors authorized the repurchase of up to $2 billion worth of shares of common stock between the date of announcement and December 31, 2016. On October 26, 2015, Corning’s Board of Directors supplemented this program with the authorization to repurchase an additional $4 billion worth of shares of common stock.
|
Years ended December 31,
|
||||||||||||||
2015
|
2014
|
2013
|
2012
|
2011
|
||||||||||
Results of operations
|
||||||||||||||
Net sales
|
$
|
9,111
|
$
|
9,715
|
$
|
7,819
|
$
|
8,012
|
$
|
7,890
|
||||
Research, development and engineering expenses
|
$
|
769
|
$
|
815
|
$
|
710
|
$
|
769
|
$
|
668
|
||||
Equity in earnings of affiliated companies
|
$
|
299
|
$
|
266
|
$
|
547
|
$
|
810
|
$
|
1,471
|
||||
Net income attributable to Corning Incorporated
|
$
|
1,339
|
$
|
2,472
|
$
|
1,961
|
$
|
1,636
|
$
|
2,817
|
||||
Earnings per common share attributable to Corning Incorporated:
|
||||||||||||||
Basic
|
$
|
1.02
|
$
|
1.82
|
$
|
1.35
|
$
|
1.10
|
$
|
1.80
|
||||
Diluted
|
$
|
1.00
|
$
|
1.73
|
$
|
1.34
|
$
|
1.09
|
$
|
1.78
|
||||
Cash dividends declared per common share
|
$
|
0.36
|
$
|
0.52
|
$
|
0.39
|
$
|
0.32
|
$
|
0.23
|
||||
Shares used in computing per share amounts:
|
||||||||||||||
Basic earnings per common share
|
1,219
|
1,305
|
1,452
|
1,494
|
1,562
|
|||||||||
Diluted earnings per common share
|
1,343
|
1,427
|
1,462
|
1,506
|
1,583
|
|||||||||
Financial position
|
||||||||||||||
Working capital
|
$
|
5,455
|
$
|
7,914
|
$
|
7,145
|
$
|
7,739
|
$
|
6,580
|
||||
Total assets
|
$
|
28,547
|
$
|
30,063
|
$
|
28,478
|
$
|
29,375
|
$
|
27,848
|
||||
Long-term debt
|
$
|
3,910
|
$
|
3,227
|
$
|
3,272
|
$
|
3,382
|
$
|
2,364
|
||||
Total Corning Incorporated shareholders’ equity
|
$
|
18,788
|
$
|
21,579
|
$
|
21,162
|
$
|
21,486
|
$
|
21,078
|
||||
Selected data
|
||||||||||||||
Capital expenditures
|
$
|
1,250
|
$
|
1,076
|
$
|
1,019
|
$
|
1,801
|
$
|
2,432
|
||||
Depreciation and amortization
|
$
|
1,184
|
$
|
1,200
|
$
|
1,002
|
$
|
997
|
$
|
957
|
||||
Number of employees
|
35,700
|
34,600
|
30,400
|
28,700
|
28,800
|
·
|
Overview
|
·
|
Results of Operations
|
·
|
Core Performance Measures
|
·
|
Reportable Segments
|
·
|
Liquidity and Capital Resources
|
·
|
Environment
|
·
|
Critical Accounting Estimates
|
·
|
New Accounting Standards
|
·
|
Forward-Looking Statements
|
·
|
The decrease in the unrealized gains from our foreign currency hedges related to translated earnings in the amount of $1,054 million;
|
·
|
A decrease in net income of $301 million in the Display Technologies segment, driven by price declines in the low-teens in percentage terms more than offsetting a mid-single digit percentage increase in volume, continued softening in the television and IT retail markets and the impact of the change in the fair value of the contingent consideration resulting from the acquisition of Corning Precision Materials in the amount of $184 million;
|
·
|
The increase of $81 million in our defined benefit pension plans mark-to-market loss, driven by lower returns on our U.S. pension assets; and
|
·
|
The absence of a gain of $38 million recorded in 2014 related to the settlement of an intellectual property dispute.
|
·
|
The positive change in the amounts recorded related to tax law changes and valuation allowance adjustments of $204 million;
|
·
|
An increase of $43 million in the Optical Communications segment, due to higher sales volume for both carrier and enterprise network products, the favorable impact of several acquisitions completed this year and manufacturing efficiencies gained through cost reductions; and
|
·
|
An increase in equity earnings of $33 million, driven by higher earnings at Dow Corning.
|
2015
|
2014
|
2013
|
% change
|
|||||||||
15 vs. 14
|
14 vs. 13
|
|||||||||||
Net sales
|
$
|
9,111
|
$
|
9,715
|
$
|
7,819
|
(6)
|
24
|
||||
Gross margin
|
$
|
3,653
|
$
|
4,052
|
$
|
3,324
|
(10)
|
22
|
||||
(gross margin %)
|
40%
|
42%
|
43%
|
|||||||||
Selling, general and administrative expenses
|
$
|
1,523
|
$
|
1,211
|
$
|
1,126
|
26
|
8
|
||||
(as a % of net sales)
|
17%
|
12%
|
14%
|
|||||||||
Research, development and engineering expenses
|
$
|
769
|
$
|
815
|
$
|
710
|
(6)
|
15
|
||||
(as a % of net sales)
|
8%
|
8%
|
9%
|
|||||||||
Restructuring, impairment and other charges
|
$
|
71
|
$
|
67
|
*
|
6
|
||||||
(as a % of net sales)
|
1%
|
1%
|
||||||||||
Equity in earnings of affiliated companies
|
$
|
299
|
$
|
266
|
$
|
547
|
12
|
(51)
|
||||
(as a % of net sales)
|
3%
|
3%
|
7%
|
|||||||||
Transaction-related gain, net
|
$
|
74
|
*
|
*
|
||||||||
(as a % of net sales)
|
1%
|
|||||||||||
Foreign currency hedge gain, net
|
$
|
85
|
$
|
1,411
|
$
|
622
|
(94)
|
127
|
||||
(as a % of net sales)
|
1%
|
15%
|
8%
|
|||||||||
Income before income taxes
|
$
|
1,486
|
$
|
3,568
|
$
|
2,473
|
(58)
|
44
|
||||
(as a % of net sales)
|
16%
|
37%
|
32%
|
|||||||||
Provision for income taxes
|
$
|
(147)
|
$
|
(1,096)
|
$
|
(512)
|
(87)
|
114
|
||||
(as a % of net sales)
|
(2)%
|
(11)%
|
(7)%
|
|||||||||
Net income attributable to Corning Incorporated
|
$
|
1,339
|
$
|
2,472
|
$
|
1,961
|
(46)
|
26
|
||||
(as a % of net sales)
|
15%
|
25%
|
25%
|
*
|
Percent change not meaningful.
|
Year ended December 31,
|
%
Change
|
%
Change
|
||||||||||
2015
|
2014
|
2013
|
15 vs. 14
|
14 vs. 13
|
||||||||
Display Technologies
|
$
|
3,086
|
$
|
3,851
|
$
|
2,545
|
(20)%
|
51%
|
||||
Optical Communications
|
2,980
|
2,652
|
2,326
|
12%
|
14%
|
|||||||
Environmental Technologies
|
1,053
|
1,092
|
919
|
(4)%
|
19%
|
|||||||
Specialty Materials
|
1,107
|
1,205
|
1,170
|
(8)%
|
3%
|
|||||||
Life Sciences
|
821
|
862
|
851
|
(5)%
|
1%
|
|||||||
All Other
|
64
|
53
|
8
|
21%
|
563%
|
|||||||
Total net sales
|
$
|
9,111
|
$
|
9,715
|
$
|
7,819
|
(6)%
|
24%
|
·
|
A decrease of $765 million in the Display Technologies segment, driven by the depreciation of the Japanese yen versus the U.S. dollar, which adversely impacted net sales in the amount of $446 million, and price declines in the low-teens on a percentage basis. Although volume increased in the mid-single digits in percentage terms, growth was muted somewhat by weakness in demand for televisions, computer monitors and mobile computing products;
|
·
|
A decrease in the Environmental Technologies segment of $39 million, driven by the translation impact from movements in foreign currency exchange rates versus the U.S. dollar, primarily the euro, of $57 million and lower sales of light duty diesel products in Europe, partially offset by higher volume for heavy-duty diesel and light-duty substrate products;
|
·
|
A decrease of $98 million in the Specialty Materials segment, driven primarily by a decline in advanced optics sales; and
|
·
|
A decrease of $41 million in the Life Sciences segment due to the impact of unfavorable movements in foreign exchange rates of $43 million.
|
·
|
Display Technologies increased by $1.3 billion, due to the consolidation of Corning Precision Materials, which increased sales by $1.8 billion, and an increase in volume that was slightly more than 10% in percentage terms, partially offset by price declines in the mid-teens on a percentage basis and the negative impact of the Japanese yen versus the U.S. dollar exchange rate in the amount of $373 million;
|
·
|
Optical Communications increased by $326 million, driven by an increase in sales of carrier network products in the amount of $254 million, largely due to growth in North America and Europe, the impact of a full year of sales from a small acquisition and the consolidation of an investment due to a change in control that occurred at the end of the second quarter of 2013, which added $53 million, and an increase of $72 million in enterprise network products. These increases were offset slightly by a $52 million decrease in optical fiber sales in China;
|
·
|
An increase of $173 million in the Environmental Technologies segment, due mainly to an increase in demand for our heavy-duty diesel products, driven by new governmental regulations in Europe and China, and increased demand for Class 8 vehicles in North America. Automotive substrate sales were also strong, increasing 9%, due to increased demand in Europe and China;
|
·
|
Specialty Materials improved by $35 million, driven by an increase in sales of advanced optics products. Corning Gorilla Glass sales remained consistent with the prior year, with volume increases offset by an unfavorable shift in product mix and price declines; and
|
·
|
Life Sciences increased by $11 million, driven by growth in North America and China, up $12 million and $5 million, respectively.
|
Years ended December 31,
|
||||||||
2015
|
2014
|
2013
|
||||||
Samsung Corning Precision Materials
|
$
|
320
|
||||||
Dow Corning
|
$
|
281
|
$
|
252
|
196
|
|||
All other
|
18
|
14
|
31
|
|||||
Total equity earnings
|
$
|
299
|
$
|
266
|
$
|
547
|
Year ended December 31,
|
||||||||
2015
|
2014
|
2013
|
||||||
Silicones
|
$
|
160
|
$
|
653
|
$
|
166
|
||
Polysilicon (Hemlock Semiconductor Group)
|
121
|
(401)
|
30
|
|||||
Total Dow Corning
|
$
|
281
|
$
|
252
|
$
|
196
|
·
|
A decrease in equity earnings from the silicones business of $493 million, driven by the following items:
|
o
|
The absence of the gain resulting from the reduction of the Implant Liability in the amount of $393 million;
|
o
|
The absence of $46 million of favorable tax adjustments recorded in 2014;
|
o
|
The negative impact of the change in the mark-to-market of a derivative instrument in the amount of $56 million ($43 million loss in 2015 compared to $13 million gain in 2014); and
|
o
|
Lower volume and unfavorable movements in foreign exchange rates.
|
·
|
A significant increase in equity earnings from the polysilicon business in the amount of $522 million, driven by the absence of the $465 million charge for the abandonment of a polycrystalline silicon plant expansion recorded in 2014 and an increase in Corning’s share of settlements of long-term sales agreements in the amount of $40 million ($49 million in the first quarter of 2015 compared to $9 million in the first quarter of 2014), partially offset by lower volume.
|
·
|
An increase in equity earnings of $487 million in the silicones segment, driven by the gain resulting from the reduction of the Implant Liability in the amount of $393 million, favorable tax adjustments in the amount of $46 million and a decrease in tax expense, offset somewhat by a $5 million decrease in the amount of gains recorded on the mark-to-market of a derivative instrument; and
|
·
|
A decrease in equity earnings of $431 million in the polysilicon segment, driven by Corning’s share of Dow Corning’s charge for the abandonment of a polycrystalline silicon plant expansion in the amount of $465 million, offset slightly by higher volume, the absence of $11 million in restructuring charges incurred in the first half of 2013, a gain in the amount of $6 million related to energy tax credits and the settlement of a long-term sales agreement in the first quarter of 2014 in the amount of $9 million.
|
Year ended
December 31, 2015
|
Year ended
December 31, 2014
|
Change
2015 vs. 2014
|
|||||||||||||||
(in millions)
|
Income
before
income
taxes
|
Net
income
|
Income
before
income
taxes
|
Net
income
|
Income
before
income
taxes
|
Net
income
|
|||||||||||
Hedges related to translated earnings:
|
|||||||||||||||||
Realized gains, net
|
$
|
653
|
$
|
410
|
$
|
274
|
$
|
224
|
$
|
379
|
$
|
186
|
|||||
Unrealized (losses) gains
|
(573)
|
(362)
|
1,095
|
692
|
(1,668)
|
(1,054)
|
|||||||||||
Total translated earnings contract gain
|
80
|
48
|
1,369
|
916
|
(1,289)
|
(868)
|
|||||||||||
Foreign currency hedges, other
|
5
|
3
|
42
|
27
|
(37)
|
(24)
|
|||||||||||
Foreign Currency Hedge Gain, Net
|
$
|
85
|
$
|
51
|
$
|
1,411
|
$
|
943
|
$
|
(1,326)
|
$
|
(892)
|
Year ended
December 31, 2014
|
Year ended
December 31, 2013
|
Change
2014 vs. 2013
|
|||||||||||||||
(in millions)
|
Income
before
income
taxes
|
Net
income
|
Income
before
income
taxes
|
Net
income
|
Income
before
income
taxes
|
Net
income
|
|||||||||||
Hedges related to translated earnings:
|
|||||||||||||||||
Realized gains, net
|
$
|
274
|
$
|
224
|
$
|
67
|
$
|
55
|
$
|
207
|
$
|
169
|
|||||
Unrealized gains
|
1,095
|
692
|
368
|
232
|
727
|
460
|
|||||||||||
Total translated earnings contract gain
|
1,369
|
916
|
435
|
287
|
934
|
629
|
|||||||||||
Foreign currency hedges, other
|
42
|
27
|
187
|
118
|
(145)
|
(91)
|
|||||||||||
Foreign Currency Hedge Gain, Net
|
$
|
1,411
|
$
|
943
|
$
|
622
|
$
|
405
|
$
|
789
|
$
|
538
|
Years ended December 31,
|
||||||||
2015
|
2014
|
2013
|
||||||
Provision for income taxes
|
$
|
147
|
$
|
1,096
|
$
|
512
|
||
Effective tax rate
|
9.9%
|
30.7%
|
20.7%
|
·
|
Rate differences on income (loss) of consolidated foreign companies, including the benefit of excess foreign tax credits resulting from the inclusion of high-taxed foreign earnings in U.S. income;
|
·
|
The impact of equity in earnings of nonconsolidated affiliates reported in the financials, net of tax;
|
·
|
$63 million tax expense for unrecognized tax benefit primarily for positions taken related to net transfer pricing adjustments (offset with benefit for competent authority relief); and
|
·
|
$100 million tax benefit primarily related to change in judgment on the realizability of Germany and Japan deferred tax assets which is partially offset with tax expense from U.S. state and China deferred tax allowances increases.
|
·
|
Rate differences on income (loss) of consolidated foreign companies, including the benefit of excess foreign tax credits resulting from the inclusion of high-taxed foreign earnings in U.S. income; and
|
·
|
The impact of equity in earnings of nonconsolidated affiliates reported in the financials, net of tax.
|
Years ended December 31,
|
||||||||
2015
|
2014
|
2013
|
||||||
Net income attributable to Corning Incorporated
|
$
|
1,339
|
$
|
2,472
|
$
|
1,961
|
||
Net income attributable to Corning Incorporated used in basic earnings per common share calculation
(1)
|
$
|
1,241
|
$
|
2,378
|
$
|
1,961
|
||
Net income attributable to Corning Incorporated used in diluted earnings per common share calculation
(1)
|
$
|
1,339
|
$
|
2,472
|
$
|
1,961
|
||
Basic earnings per common share
|
$
|
1.02
|
$
|
1.82
|
$
|
1.35
|
||
Diluted earnings per common share
|
$
|
1.00
|
$
|
1.73
|
$
|
1.34
|
||
Shares used in computing per share amounts
|
||||||||
Basic earnings per common share
|
1,219
|
1,305
|
1,452
|
|||||
Diluted earnings per common share
|
1,343
|
1,427
|
1,462
|
(1)
|
Refer to Note 18 (Earnings per Common Share) to the Consolidated Financial Statements for additional information.
|
Years ended December 31,
|
||||||||
(In millions)
|
2015
|
2014
|
2013
|
|||||
Net income attributable to Corning Incorporated
|
$
|
1,339
|
$
|
2,472
|
$
|
1,961
|
||
Foreign currency translation adjustments and other
|
(590)
|
(1,073)
|
(682)
|
|||||
Net unrealized gains (losses) on investments
|
1
|
(1)
|
2
|
|||||
Unamortized gains (losses) and prior service (costs) credits for postretirement benefit plans
|
121
|
(281)
|
392
|
|||||
Net unrealized (losses) gains on designated hedges
|
(36)
|
4
|
(24)
|
|||||
Other comprehensive loss, net of tax (Note 17)
|
(504)
|
(1,351)
|
(312)
|
|||||
Comprehensive income attributable to Corning Incorporated
|
$
|
835
|
$
|
1,121
|
$
|
1,649
|
2015
|
2014
|
2013
|
% change
|
|||||||||
15 vs. 14
|
14 vs. 13
|
|||||||||||
Core net sales
|
$
|
9,800
|
$
|
9,955
|
$
|
7,780
|
(2)%
|
28%
|
||||
Core equity in earnings of affiliated companies
|
$
|
269
|
$
|
310
|
$
|
531
|
(13)%
|
(42)%
|
||||
Core earnings attributable to Corning Incorporated
|
$
|
1,882
|
$
|
2,023
|
$
|
1,656
|
(7)%
|
22%
|
Year ended December 31,
|
%
Change
|
%
Change
|
||||||||||
2015
|
2014
|
2013
|
15 vs. 14
|
14 vs. 13
|
||||||||
Display Technologies
|
$
|
3,774
|
$
|
4,092
|
$
|
2,507
|
(8)%
|
63%
|
||||
Optical Communications
|
2,980
|
2,652
|
2,326
|
12%
|
14%
|
|||||||
Environmental Technologies
|
1,053
|
1,092
|
919
|
(4)%
|
19%
|
|||||||
Specialty Materials
|
1,107
|
1,205
|
1,170
|
(8)%
|
3%
|
|||||||
Life Sciences
|
821
|
862
|
851
|
(5)%
|
1%
|
|||||||
All Other
|
65
|
52
|
7
|
25%
|
643%
|
|||||||
Total core net sales
|
$
|
9,800
|
$
|
9,955
|
$
|
7,780
|
(2)%
|
28%
|
·
|
A decrease of $318 million in the Display Technologies segment, driven by price declines in the low-teens on a percentage basis. Although volume increased in the mid-single digits in percentage terms, growth was muted somewhat by weakness in demand for televisions, computer monitors and mobile computing products;
|
·
|
A decrease in the Environmental Technologies segment of $39 million, driven by the translation impact from movements in foreign currency exchange rates versus the U.S. dollar, primarily the euro, of $57 million and lower sales of light duty diesel products in Europe, partially offset by higher volume for heavy duty diesel and light duty substrate products;
|
·
|
A decrease of $98 million in the Specialty Materials segment, driven primarily by a decline in advanced optics sales; and
|
·
|
A decrease of $41 million in the Life Sciences segment due to the impact of unfavorable movements in foreign exchange rates of $43 million.
|
·
|
Display Technologies increased by $1,585 million, due to the consolidation of Corning Precision Materials and an increase in volume that was slightly more than 10% in percentage terms, offset somewhat by price declines in the mid-teens;
|
·
|
Optical Communications increased by $326 million, driven by an increase in sales of carrier network products in the amount of $254 million, largely due to growth in North America and Europe, the impact of a full year of sales from a small acquisition and the consolidation of an investment due to a change in control that occurred at the end of the second quarter of 2013, which added $53 million, and an increase of $72 million in enterprise network products. These increases were offset slightly by a $52 million decrease in optical fiber sales in China;
|
·
|
An increase of $173 million in the Environmental Technologies segment, due mainly to an increase in demand for our heavy duty diesel products, driven by new governmental regulations in Europe and China, and increased demand for Class 8 vehicles in North America. Automotive substrate sales were also strong, increasing 9%, on increased demand in Europe and China;
|
·
|
Specialty Materials improved by $35 million, driven by an increase in sales of advanced optics products. Corning Gorilla Glass sales remained consistent with the prior year, with volume increases offset by an unfavorable shift in product mix and price declines; and
|
·
|
Life Sciences increased by $11 million, driven by growth in North America and China, up $12 million and $5 million, respectively.
|
2015
|
2014
|
2013
|
% change
|
|||||||||
15 vs. 14
|
14 vs. 13
|
|||||||||||
Samsung Corning Precision Materials
|
$
|
356
|
||||||||||
Dow Corning *
|
$
|
245
|
$
|
287
|
145
|
(15)%
|
98%
|
|||||
All other
|
24
|
23
|
30
|
4%
|
(23)%
|
|||||||
Total core equity earnings
|
$
|
269
|
$
|
310
|
$
|
531
|
(13)%
|
(42)%
|
*
|
In 2013, we excluded the operating results of Dow Corning’s consolidated subsidiary Hemlock Semiconductor, a producer of polycrystalline silicon, to remove the impact of the severe unpredictability and instability in the polysilicon market.
|
Year ended December 31,
|
||||||||
2015
|
2014
|
2013
|
||||||
Silicones
|
$
|
176
|
$
|
197
|
$
|
145
|
||
Polysilicon (Hemlock Semiconductor Group)
|
69
|
90
|
31
|
|||||
Total Dow Corning
|
$
|
245
|
$
|
287
|
$
|
176
|
2015
|
2014
|
2013
|
||||||
As reported
|
$
|
281
|
$
|
252
|
$
|
196
|
||
Hemlock Semiconductor operating results
(8)
|
(31)
|
|||||||
Hemlock Semiconductor non-operating results
(8)
|
(1)
|
|||||||
Equity in earnings of affiliated companies
(8)
|
(36)
|
35
|
(19)
|
|||||
Core Performance measures
|
$
|
245
|
$
|
287
|
$
|
145
|
·
|
The impact of the consolidation of Corning Precision Materials and the resulting cost reductions and efficiencies gained through synergies;
|
·
|
An increase in core equity earnings from Dow Corning, driven by a decrease in tax expense, improved manufacturing efficiency and an increase in volume;
|
·
|
An increase of $58 million in the Environmental Technologies segment, driven by an increase in demand for our diesel products and improved manufacturing efficiency; and
|
·
|
An increase of $34 million in the Optical Communications segment, driven by higher sales of carrier network and enterprise network products.
|
2015
|
2014
|
2013
|
||||||
Core earnings attributable to Corning Incorporated
|
$
|
1,882
|
$
|
2,023
|
$
|
1,656
|
||
Less: Series A convertible preferred stock dividend
|
98
|
94
|
||||||
Core earnings available to common stockholders - basic
|
1,784
|
1,929
|
1,656
|
|||||
Add: Series A convertible preferred stock dividend
|
98
|
94
|
||||||
Core earnings available to common stockholders - diluted
|
$
|
1,882
|
$
|
2,023
|
$
|
1,656
|
||
Weighted-average common shares outstanding - basic
|
1,219
|
1,305
|
1,452
|
|||||
Effect of dilutive securities:
|
||||||||
Stock options and other dilutive securities
|
9
|
12
|
10
|
|||||
Series A convertible preferred stock
|
115
|
110
|
||||||
Weighted-average common shares outstanding - diluted
|
1,343
|
1,427
|
1,462
|
|||||
Core basic earnings per common share
|
$
|
1.46
|
$
|
1.48
|
$
|
1.14
|
||
Core diluted earnings per common share
|
$
|
1.40
|
$
|
1.42
|
$
|
1.13
|
Year ended December 31, 2015
|
||||||||||||||||
Net
sales
|
Equity
earnings
|
Income
before
income
taxes
|
Net
income
|
Effective
tax
rate
|
Earnings
per
share
|
|||||||||||
As reported
|
$
|
9,111
|
$
|
299
|
$
|
1,486
|
$
|
1,339
|
9.9%
|
$
|
1.00
|
|||||
Constant-yen
(1)
|
687
|
6
|
567
|
423
|
0.31
|
|||||||||||
Constant-won
(1)
|
2
|
(2)
|
(25)
|
(19)
|
(0.01)
|
|||||||||||
Foreign currency hedges related to translated earnings
(2)
|
(80)
|
(48)
|
(0.04)
|
|||||||||||||
Acquisition-related costs
(3)
|
55
|
36
|
0.03
|
|||||||||||||
Discrete tax items and other tax-related adjustments
(4)
|
36
|
0.03
|
||||||||||||||
Litigation, regulatory and other legal matters
(5)
|
5
|
3
|
||||||||||||||
Restructuring, impairment and other charges
(6)
|
46
|
42
|
0.03
|
|||||||||||||
Liquidation of subsidiary
(7)
|
||||||||||||||||
Equity in earnings of affiliated companies
(8)
|
(34)
|
(34)
|
(33)
|
(0.02)
|
||||||||||||
Impacts from the acquisition of Samsung Corning Precision Materials
(9)
|
(20)
|
(18)
|
(0.01)
|
|||||||||||||
Post-combination expenses
(10)
|
25
|
16
|
0.01
|
|||||||||||||
Pension mark-to-market adjustment
(11)
|
165
|
105
|
0.08
|
|||||||||||||
Core performance measures
|
$
|
9,800
|
$
|
269
|
$
|
2,190
|
$
|
1,882
|
14.1%
|
$
|
1.40
|
Year ended December 31, 2014
|
||||||||||||||||
Net
sales
|
Equity
earnings
|
Income
before
income
taxes
|
Net
income
|
Effective
tax
rate
|
Earnings
per
share
|
|||||||||||
As reported
|
$
|
9,715
|
$
|
266
|
$
|
3,568
|
$
|
2,472
|
30.7%
|
$
|
1.73
|
|||||
Constant-yen
(1)*
|
240
|
1
|
197
|
144
|
0.10
|
|||||||||||
Constant-won
(1)
|
37
|
26
|
0.02
|
|||||||||||||
Foreign currency hedges related to translated earnings
(2)
|
(1,369)
|
(916)
|
(0.64)
|
|||||||||||||
Acquisition-related costs
(3)
|
74
|
57
|
0.04
|
|||||||||||||
Discrete tax items and other tax-related adjustments
(4)
|
240
|
0.17
|
||||||||||||||
Litigation, regulatory and other legal matters
(5)
|
(1)
|
(2)
|
||||||||||||||
Restructuring, impairment and other charges
(6)
|
86
|
66
|
0.05
|
|||||||||||||
Liquidation of subsidiary
(7)
|
(3)
|
|||||||||||||||
Equity in earnings of affiliated companies
(8)
|
43
|
43
|
38
|
0.03
|
||||||||||||
Gain on previously held equity investment
(9)
|
(394)
|
(292)
|
(0.20)
|
|||||||||||||
Settlement of pre-existing contract
(9)
|
320
|
320
|
0.22
|
|||||||||||||
Contingent consideration fair value adjustment
(9)
|
(249)
|
(194)
|
(0.14)
|
|||||||||||||
Post-combination expenses
(9)
|
72
|
55
|
0.04
|
|||||||||||||
Impacts from the acquisition of Samsung Corning Precision Materials
(9)
|
(9)
|
(12)
|
(0.01)
|
|||||||||||||
Pension mark-to-market adjustment
(11)
|
29
|
24
|
0.02
|
|||||||||||||
Core performance measures
|
$
|
9,955
|
$
|
310
|
$
|
2,404
|
$
|
2,023
|
15.8%
|
$
|
1.42
|
*
|
In the first quarter of 2015, we changed the yen-to-dollar management rate from ¥93 to ¥99 to closely align with the yen-denominated hedges entered into for the years 2015 through 2017. Prior periods presented have been recast based on the new rate.
|
Year ended December 31, 2013
|
||||||||||||||||
(in millions)
|
Net
sales
|
Equity
earnings
|
Income
before
income
taxes
|
Net
income
|
Effective
tax
rate
|
Per
share
|
||||||||||
As reported
|
$
|
7,819
|
$
|
547
|
$
|
2,473
|
$
|
1,961
|
20.7%
|
$
|
1.34
|
|||||
Constant-yen
(1)*
|
(39)
|
(28)
|
(53)
|
(45)
|
(0.03)
|
|||||||||||
Foreign currency hedges related to translated earnings
(2)
|
(435)
|
(287)
|
(0.20)
|
|||||||||||||
Other yen-related transactions
(2)
|
(99)
|
(69)
|
(0.05)
|
|||||||||||||
Acquisition-related costs
(3)
|
54
|
40
|
0.03
|
|||||||||||||
Discrete tax items and other tax-related adjustments
(4)
|
9
|
0.01
|
||||||||||||||
Litigation, regulatory and other legal matters
(5)
|
19
|
13
|
0.01
|
|||||||||||||
Restructuring, impairment and other charges
(6)
|
67
|
46
|
0.03
|
|||||||||||||
Equity in earnings of affiliated companies
(8)
|
42
|
42
|
44
|
0.02
|
||||||||||||
Hemlock Semiconductor operating results
(8)
|
(31)
|
(31)
|
(30)
|
(0.02)
|
||||||||||||
Hemlock Semiconductor non-operating results
(8)
|
1
|
1
|
1
|
|||||||||||||
Pension mark-to-market adjustment
(11)
|
(30)
|
(17)
|
(0.01)
|
|||||||||||||
Gain on change in control of equity investment
(12)
|
(17)
|
(12)
|
(0.01)
|
|||||||||||||
Other
|
4
|
2
|
||||||||||||||
Core performance measures
|
$
|
7,780
|
$
|
531
|
$
|
1,995
|
$
|
1,656
|
17.0%
|
$
|
1.13
|
*
|
In the first quarter of 2015, we changed the yen-to-dollar management rate from ¥93 to ¥99 to closely align with the yen-denominated hedges entered into for the years 2015 through 2017. Prior periods presented have been recast based on the new rate.
|
(1)
|
Constant-currency adjustments:
|
Constant-yen
:
Because a significant portion of Display Technologies segment revenues and manufacturing costs are denominated in Japanese yen, management believes it is important to understand the impact on core earnings of translating yen into dollars. Presenting results on a constant-yen basis mitigates the translation impact of the Japanese yen, and allows management to evaluate performance period over period, analyze underlying trends in our businesses, and establish operational goals and forecasts. As of January 1, 2015, we used an internally derived management rate of ¥99, which is closely aligned to our current yen portfolio of foreign currency hedges, and have recast all periods presented based on this rate in order to effectively remove the impact of changes in the Japanese yen.
|
|
Constant-won
:
Following the acquisition of Samsung Corning Precision Materials and because a significant portion of Corning Precision Materials’ costs are denominated in South Korean won, management believes it is important to understand the impact on core earnings from translating won into dollars. Presenting results on a constant-won basis mitigates the translation impact of the South Korean won, and allows management to evaluate performance period over period, analyze underlying trends in our businesses, and establish operational goals and forecasts without the variability caused by the fluctuations caused by changes in the rate of this currency. We use an internally derived management rate of 1,100, which is consistent with historical prior period averages of the won.
|
|
(2)
|
Foreign currency hedges related to translated earnings
:
We have excluded the impact of the gains and losses of our foreign currency hedges related to translated earnings for each period presented.
|
(3)
|
Acquisition-related costs
:
These expenses include intangible amortization, inventory valuation adjustments and external acquisition-related deal costs.
|
(4)
|
Discrete tax items and other tax-related adjustments
:
This represents the removal of discrete adjustments attributable to changes in tax law and changes in judgment about the realizability of certain deferred tax assets, as well as other non-operational tax-related adjustments, including the tax effect of transfer pricing out-of-period adjustments in 2014 and 2015.
|
(5)
|
Litigation, regulatory and other legal matters
:
Includes amounts related to the Pittsburgh Corning Corporation (PCC) asbestos litigation, adjustments to our estimated liability for environmental-related items and other legal matters.
|
(6)
|
Restructuring, impairment and other charges
:
This amount includes restructuring, impairment and other charges, including goodwill impairment charges and other expenses and disposal costs not classified as restructuring expense.
|
(7)
|
Liquidation of subsidiary
:
The partial impact of non-restructuring related items due to the decision to liquidate a consolidated subsidiary that is not significant.
|
(8)
|
Equity in earnings of affiliated companies
:
These adjustments relate to items which do not reflect expected on-going operating results of our affiliated companies, such as restructuring, impairment and other charges and settlements under “take-or-pay” contracts. In 2013, we excluded the operating results of Dow Corning’s consolidated subsidiary Hemlock Semiconductor, a producer of polycrystalline silicon, to remove the impact of the severe unpredictability and instability in the polysilicon market.
|
(9)
|
Impacts from the acquisition of Samsung Corning Precision Materials
:
Pre-acquisition gains and losses on previously held equity investment and other gains and losses related to the acquisition, including post-combination expenses, fair value adjustments to the indemnity asset related to contingent consideration and the impact of the withholding tax on a dividend from Samsung Corning Precision Materials.
|
(10)
|
Post-combination expenses
:
Post-combination expenses incurred as a result of an acquisition in the first quarter of 2015.
|
(11)
|
Pension mark-to-market adjustment
:
Mark-to-market pension gains and losses, which arise from changes in actuarial assumptions and the difference between actual and expected returns on plan assets and discount rates.
|
(12)
|
Gain on change in control of equity investment
:
Gain as a result of certain changes to the shareholder agreement of an equity company, resulting in Corning having a controlling interest that requires consolidation of this investment.
|
·
|
Display Technologies – manufactures glass substrates for flat panel liquid crystal displays.
|
·
|
Optical Communications – manufactures carrier network and enterprise network components for the telecommunications industry.
|
·
|
Environmental Technologies – manufactures ceramic substrates and filters for automotive and diesel applications.
|
·
|
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.
|
·
|
Life Sciences – manufactures glass and plastic labware, equipment, media and reagents to provide workflow solutions for scientific applications.
|
Year ended
December 31, 2015
|
Year ended
December 31, 2014
|
Year ended
December 31, 2013
|
|||||||||||||||
(in millions)
|
Sales
|
Net
income
|
Sales
|
Net
income
|
Sales
|
Net
income
|
|||||||||||
As reported
|
$
|
3,086
|
$
|
1,095
|
$
|
3,851
|
$
|
1,396
|
$
|
2,545
|
$
|
1,293
|
|||||
Constant-yen
(1)*
|
686
|
419
|
240
|
142
|
(38)
|
(47)
|
|||||||||||
Constant-won
(1)
|
2
|
(17)
|
27
|
||||||||||||||
Foreign currency hedges related to translated earnings
(2)
|
(416)
|
(290)
|
(90)
|
||||||||||||||
Other yen-related transactions
(2)
|
(67)
|
||||||||||||||||
Acquisition-related costs
(3)
|
37
|
8
|
|||||||||||||||
Discrete tax items and other tax-related adjustments
(4)
|
4
|
10
|
|||||||||||||||
Restructuring, impairment and other charges
(6)
|
40
|
6
|
|||||||||||||||
Equity in earnings of affiliated companies
(8)
|
6
|
28
|
|||||||||||||||
Impacts from the acquisition of Samsung Corning Precision Materials
(9)
|
(10)
|
1
|
(121)
|
||||||||||||||
Pension mark-to-market adjustment
(11)
|
4
|
2
|
(8)
|
||||||||||||||
Core performance measures
|
$
|
3,774
|
$
|
1,075
|
$
|
4,092
|
$
|
1,243
|
$
|
2,507
|
$
|
1,133
|
*
|
In the first quarter of 2015, we changed the yen-to-dollar management rate from ¥93 to ¥99 to closely align with the yen-denominated hedges entered into for the years 2015 through 2017. Prior periods presented have been recast based on the new rate.
|
·
|
The impact of price declines in the low-teens in percentage terms that more than offset the mid-single digit percent increase in volume;
|
·
|
A decrease of $184 million in the gain on the fair value adjustment of the contingent consideration resulting from the acquisition of Corning Precision Materials; and
|
·
|
The absence of a gain on the settlement of an intellectual property dispute recorded in 2014 in the amount of $38 million.
|
·
|
Improvements in manufacturing efficiency of $79 million;
|
·
|
A decline in transaction and acquisition-related costs in the amounts of $73 million and $37 million, respectively;
|
·
|
A decrease of $40 million in restructuring, impairment and other charges; and
|
·
|
A decline in operating expenses.
|
·
|
The impact of the acquisition of Corning Precision Materials and the resulting cost reductions gained through synergies;
|
·
|
The fair value adjustment of the contingent consideration resulting from the acquisition of Corning Precision Materials in the amount of $194 million; and
|
·
|
Improvements in manufacturing efficiency of $46 million.
|
·
|
The impact of price declines in the mid-teens in percentage terms that more than offset the increase in volume;
|
·
|
The absence of the $67 million gain from our yen-denominated cash flow hedging program;
|
·
|
The increase in transaction and acquisition-related costs related to the acquisition of Corning Precision Materials in the amounts of $73 million and $29 million, respectively; and
|
·
|
An increase of $34 million in restructuring, impairment and other charges.
|
Year ended
December 31, 2015
|
Year ended
December 31, 2014
|
Year ended
December 31, 2013
|
|||||||||||||||
(in millions)
|
Sales
|
Net
income
|
Sales
|
Net
income
|
Sales
|
Net
income
|
|||||||||||
As reported
|
$
|
2,980
|
$
|
237
|
$
|
2,652
|
$
|
194
|
$
|
2,326
|
$
|
189
|
|||||
Acquisition-related costs
(3)
|
16
|
(2)
|
9
|
||||||||||||||
Litigation, regulatory and other legal matters
(5)
|
13
|
||||||||||||||||
Restructuring, impairment and other charges
(6)
|
(1)
|
17
|
8
|
||||||||||||||
Liquidation of subsidiary
(7)
|
(2)
|
||||||||||||||||
Post-combination expenses
(10)
|
16
|
||||||||||||||||
Pension mark-to-market adjustment
(11)
|
13
|
(9)
|
|||||||||||||||
Gain on change in control of equity investment
(12)
|
(11)
|
||||||||||||||||
Core performance measures
|
$
|
2,980
|
$
|
281
|
$
|
2,652
|
$
|
220
|
$
|
2,326
|
$
|
186
|
·
|
Higher sales of cable and hardware and equipment products primarily used in fiber-to-the-home solutions in North America and Europe, up $113 million and $46 million, respectively;
|
·
|
The impact of a full year of sales from a small acquisition and the consolidation of an investment due to a change in control which occurred at the end of the second quarter of 2013, which added approximately $53 million; and
|
·
|
An increase of $11 million in sales of optical fiber, driven by higher sales in North America and Europe, partially offset by a decrease in China.
|
Year ended
December 31, 2015
|
Year ended
December 31, 2014
|
Year ended
December 31, 2013
|
|||||||||||||||
(in millions)
|
Sales
|
Net
income
|
Sales
|
Net
income
|
Sales
|
Net
income
|
|||||||||||
As reported
|
$
|
1,053
|
$
|
161
|
$
|
1,092
|
$
|
178
|
$
|
919
|
$
|
127
|
|||||
Restructuring, impairment and other charges
(6)
|
1
|
||||||||||||||||
Pension mark-to-market adjustment
(11)
|
5
|
(3)
|
|||||||||||||||
Core performance measures
|
$
|
1,053
|
$
|
161
|
$
|
1,092
|
$
|
183
|
$
|
919
|
$
|
125
|
Year ended
December 31, 2015
|
Year ended
December 31, 2014
|
Year ended
December 31, 2013
|
|||||||||||||||
(in millions)
|
Sales
|
Net
income
|
Sales
|
Net
income
|
Sales
|
Net
income
|
|||||||||||
As reported
|
$
|
1,107
|
$
|
167
|
$
|
1,205
|
$
|
138
|
$
|
1,170
|
$
|
181
|
|||||
Constant-yen
(1)*
|
(6)
|
(3)
|
2
|
||||||||||||||
Constant-won
(1)
|
(2)
|
||||||||||||||||
Foreign currency hedges related to translated earnings
(2)
|
5
|
14
|
|||||||||||||||
Acquisition-related costs
(3)
|
(1)
|
1
|
|||||||||||||||
Restructuring, impairment and other charges
(6)
|
14
|
12
|
12
|
||||||||||||||
Pension mark-to-market adjustment
(11)
|
(2)
|
||||||||||||||||
Core performance measures
|
$
|
1,107
|
$
|
178
|
$
|
1,205
|
$
|
160
|
$
|
1,170
|
$
|
194
|
*
|
In the first quarter of 2015, we changed the yen-to-dollar management rate from ¥93 to ¥99 to closely align with the yen-denominated hedges entered into for the years 2015 through 2017. Prior periods presented have been recast based on the new rate.
|
Year ended
December 31, 2015
|
Year ended
December 31, 2014
|
Year ended
December 31, 2013
|
|||||||||||||||
(in millions)
|
Sales
|
Net
income
|
Sales
|
Net
income
|
Sales
|
Net
income
|
|||||||||||
As reported
|
$
|
821
|
$
|
61
|
$
|
862
|
$
|
67
|
$
|
851
|
$
|
68
|
|||||
Acquisition-related costs
(3)
|
12
|
14
|
21
|
||||||||||||||
Restructuring, impairment and other charges
(6)
|
2
|
3
|
|||||||||||||||
Pension mark-to-market adjustment
(11)
|
(3)
|
||||||||||||||||
Core performance measures
|
$
|
821
|
$
|
73
|
$
|
862
|
$
|
83
|
$
|
851
|
$
|
89
|
% change
|
||||||||||||
As Reported
|
2015
|
2014
|
2013
|
15 vs. 14
|
14 vs. 13
|
|||||||
Net sales
|
$
|
64
|
$
|
53
|
$
|
8
|
21
|
563
|
||||
Research, development and engineering expenses
|
$
|
186
|
$
|
177
|
$
|
116
|
5
|
53
|
||||
Equity earnings of affiliated companies
|
$
|
17
|
$
|
18
|
$
|
(24)
|
(6)
|
*
|
||||
Net loss
|
$
|
(202)
|
$
|
(198)
|
$
|
(165)
|
(2)
|
20
|
*
|
Percent change not meaningful
|
·
|
In the second quarter of 2015, we issued $375 million of 1.50% senior unsecured notes that mature on May 8, 2018 and $375 million of 2.90% senior unsecured notes that mature on May 15, 2022. The net proceeds of $745 million will be used for general corporate purposes. We can redeem these notes at any time, subject to certain customary terms and conditions.
|
·
|
In the third quarter of 2014, we amended and restated our existing revolving credit facility. The amended facility provides a $2 billion unsecured multi-currency line of credit and expires on September 30, 2019. At December 31, 2015, there were no outstanding amounts under this credit facility. The facility includes affirmative and negative covenants that Corning must comply with, including a leverage (debt to capital ratio) financial covenant. As of December 31, 2015, we were in compliance with all of the covenants.
|
·
|
In the first quarter of 2013, we amended and restated our then-existing revolving credit facility. The 2013 amended facility provided a $1 billion unsecured multi-currency line of credit that would have expired in March 2018. This facility was amended and restated by the $2 billion facility entered into in the third quarter of 2014.
|
·
|
In the first quarter of 2013, Corning repaid the aggregate principal amount and accrued interest outstanding on the credit facility entered into in the second quarter of 2011 that allowed Corning to borrow up to Chinese renminbi (RMB) 4 billion. The total amount repaid was approximately $500 million. Upon repayment, this facility was terminated.
|
·
|
In the second quarter of 2013, the Company established a commercial paper program on a private placement basis, pursuant to which we may issue short-term, unsecured commercial paper notes up to a maximum aggregate principal amount outstanding at any time of $1 billion. Under this program, the Company may issue the notes from time to time and will use the proceeds for general corporate purposes. The maturities of the notes will vary, but may not exceed 390 days from the date of issue. The interest rates will vary based on market conditions and the ratings assigned to the notes by credit rating agencies at the time of issuance. The Company’s revolving credit facility is available to support obligations under the commercial paper program, if needed.
|
·
|
In the fourth quarter of 2013, we issued $250 million of 3.70% senior unsecured notes that mature on November 15, 2023. The net proceeds of approximately $248 million were used for general corporate purposes.
|
·
|
In the fourth quarter of 2013, we recorded a financing obligation in the approximate amount of $230 million for a new LCD glass substrate facility in China.
|
Years ended December 31,
|
||||||||
2015
|
2014
|
2013
|
||||||
Net cash provided by operating activities
|
$
|
2,809
|
$
|
4,709
|
$
|
2,787
|
||
Net cash used in investing activities
|
$
|
(685)
|
$
|
(962)
|
$
|
(1,004)
|
||
Net cash used in financing activities
|
$
|
(2,603)
|
$
|
(2,586)
|
$
|
(2,063)
|
December 31,
|
|||||
2015
|
2014
|
||||
Working capital
|
$
|
5,455
|
$
|
7,914
|
|
Current ratio
|
2.9:1
|
4.4:1
|
|||
Trade accounts receivable, net of allowances
|
$
|
1,372
|
$
|
1,501
|
|
Days sales outstanding
|
55
|
56
|
|||
Inventories
|
$
|
1,385
|
$
|
1,322
|
|
Inventory turns
|
4.0
|
4.2
|
|||
Days payable outstanding
(1)
|
42
|
41
|
|||
Long-term debt
|
$
|
3,910
|
$
|
3,227
|
|
Total debt to total capital
|
19%
|
13%
|
(1)
|
Includes trade payables only.
|
RATING AGENCY
|
Rating
long-term debt
|
Outlook
last update
|
|
Fitch
|
BBB+
|
Stable
|
|
October 29, 2015
|
|||
Standard & Poor’s
|
BBB+
|
Stable
|
|
October 27, 2015
|
|||
Moody’s
|
Baa1
|
Stable
|
|
October 28, 2015
|
Amount of commitment and contingency expiration per period
|
||||||||||||||
Total
|
Less than
1 year
|
1 to 3
years
|
3 to 5
years
|
5 years and
thereafter
|
||||||||||
Performance bonds and guarantees
|
$
|
92
|
$
|
25
|
$
|
6
|
$
|
1
|
$
|
60
|
||||
Stand-by letters of credit
(1)
|
47
|
44
|
3
|
|||||||||||
Credit Facility to Equity Company
|
31
|
27
|
4
|
|||||||||||
Loan guarantees
|
14
|
14
|
||||||||||||
Subtotal of commitment expirations per period
|
$
|
184
|
$
|
96
|
$
|
6
|
$
|
1
|
$
|
81
|
||||
Purchase obligations
(6)
|
$
|
220
|
$
|
106
|
$
|
77
|
$
|
33
|
$
|
4
|
||||
Capital expenditure obligations
(2)
|
298
|
298
|
||||||||||||
Total debt
(3)
|
4,122
|
565
|
625
|
550
|
2,382
|
|||||||||
Interest on long-term debt
(4)
|
2,385
|
165
|
316
|
280
|
1,624
|
|||||||||
Capital leases and financing obligations
(3)
|
355
|
7
|
10
|
7
|
331
|
|||||||||
Imputed interest on capital leases and financing obligations
|
240
|
19
|
37
|
36
|
148
|
|||||||||
Minimum rental commitments
|
573
|
49
|
110
|
77
|
337
|
|||||||||
Uncertain tax positions
(5)
|
58
|
|||||||||||||
Subtotal of contractual obligation payments due by period
(5)
|
8,251
|
1,209
|
1,175
|
983
|
4,826
|
|||||||||
Total commitments and contingencies
(5)
|
$
|
8,435
|
$
|
1,305
|
$
|
1,181
|
$
|
984
|
$
|
4,907
|
(1)
|
At December 31, 2015, $38 million of the $47 million was included in other accrued liabilities on our consolidated balance sheets.
|
(2)
|
Capital expenditure obligations primarily reflect amounts associated with our capital expansion activities.
|
(3)
|
Total debt above is stated at maturity value, and excludes interest rate swap gains and bond discounts.
|
(4)
|
The estimate of interest payments assumes interest is paid through the date of maturity or expiration of the related debt, based upon stated rates in the respective debt instruments.
|
(5)
|
At December 31, 2015, $58 million was included on our balance sheet related to uncertain tax positions. Of this amount, we are unable to estimate when any of that amount will become payable.
|
(6)
|
Purchase obligations are enforceable and legally binding obligations which primarily consist of raw material and energy-related take-or-pay contracts.
|
·
|
A significant decrease in the market price of an asset;
|
·
|
A significant change in the extent or manner in which a long-lived asset is being used or in its physical condition;
|
·
|
A significant adverse change in legal factors or in the business climate that could affect the value of the asset, including an adverse action or assessment by a regulator;
|
·
|
An accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of an asset;
|
·
|
A current-period operating or cash flow loss combined with a history of operating or cash flow losses or a projection or forecast that demonstrates continuing losses associated with the use of an asset; and
|
·
|
A current expectation that, more likely than not, an asset will be sold or otherwise disposed of significantly before the end of its previously estimated useful life.
|
·
|
We assess qualitative factors in each of our reporting units which carry goodwill to determine whether it is necessary to perform the first step of the two-step quantitative goodwill impairment test.
|
·
|
The following events and circumstances are considered when evaluating whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount:
|
o
|
Macroeconomic conditions, such as a deterioration in general economic conditions, fluctuations in foreign exchange rates and/or other developments in equity and credit markets;
|
o
|
Market capital in relation to book value;
|
o
|
Industry and market considerations, such as a deterioration in the environment in which an entity operates, material loss in market share and significant declines in product pricing;
|
o
|
Cost factors, such as an increase in raw materials, labor or other costs;
|
o
|
Overall financial performance, such as negative or declining cash flows or a decline in actual or forecasted revenue;
|
o
|
Other relevant entity-specific events, such as material changes in management or key personnel; and
|
o
|
Events affecting a reporting unit, such as a change in the composition or carrying amount of its net assets including acquisitions and dispositions.
|
December 31,
|
||||||||
(In millions)
|
2015
|
2014
|
2013
|
|||||
Actual return on plan assets – Domestic plans
|
$
|
(111)
|
$
|
287
|
$
|
65
|
||
Expected return on plan assets – Domestic plans
|
166
|
159
|
158
|
|||||
Actual return on plan assets – International plans
|
3
|
68
|
6
|
|||||
Expected return on plan assets – International plans
|
12
|
15
|
11
|
|||||
December 31,
|
||||||||
2015
|
2014
|
2013
|
||||||
Weighted-average actual and expected return on assets:
|
||||||||
Actual return on plan assets – Domestic plans
|
(4.23%)
|
10.82%
|
2.67%
|
|||||
Expected return on plan assets – Domestic plans
|
6.00%
|
6.25%
|
6.00%
|
|||||
Actual return on plan assets – International plans
|
0.59%
|
17.15%
|
2.73%
|
|||||
Expected return on plan assets – International plans
|
2.97%
|
4.12%
|
3.73%
|
Change in assumption
|
Effect on 2016
pre-tax pension
expense
|
Effect on
December 31, 2015
PBO
|
|
25 basis point decrease in each spot rate
|
- 2 million
|
+ 87 million
|
|
25 basis point increase in each spot rate
|
+ 2 million
|
- 83 million
|
|
25 basis point decrease in expected return on assets
|
+ 6 million
|
||
25 basis point increase in expected return on assets
|
- 6 million
|
Change in assumption
|
Effect on 2016
pre-tax OPEB
expense
|
Effect on
December 31, 2015
APBO*
|
|
25 basis point decrease in each spot rate
|
+ 0 million
|
+ 23 million
|
|
25 basis point increase in each spot rate
|
- 0 million
|
- 22 million
|
*
|
Accumulated Postretirement Benefit Obligation (APBO).
|
-
|
global business, financial, economic and political conditions;
|
-
|
tariffs and import duties;
|
-
|
currency fluctuations between the U.S. dollar and other currencies, primarily the Japanese yen, New Taiwan dollar, euro, Chinese renminbi and South Korean won;
|
-
|
product demand and industry capacity;
|
-
|
competitive products and pricing;
|
-
|
availability and costs of critical components and materials;
|
-
|
new product development and commercialization;
|
-
|
order activity and demand from major customers;
|
-
|
fluctuations in capital spending by customers;
|
-
|
possible disruption in commercial activities due to terrorist activity, cyber attack, armed conflict, political or financial instability, natural disasters, or major health concerns;
|
-
|
unanticipated disruption to equipment, facilities, or operations;
|
-
|
facility expansions and new plant start-up costs;
|
-
|
effect of regulatory and legal developments;
|
-
|
ability to pace capital spending to anticipated levels of customer demand;
|
-
|
credit rating and ability to obtain financing and capital on commercially reasonable terms;
|
-
|
adequacy and availability of insurance;
|
-
|
financial risk management;
|
-
|
acquisition and divestiture activities;
|
-
|
rate of technology change;
|
-
|
level of excess or obsolete inventory;
|
-
|
ability to enforce patents and protect intellectual property and trade secrets;
|
-
|
adverse litigation;
|
-
|
product and components performance issues;
|
-
|
retention of key personnel;
|
-
|
stock price fluctuations;
|
-
|
trends for the continued growth of the Company’s businesses;
|
-
|
the ability of research and development projects to produce revenues in future periods;
|
-
|
a downturn in demand or decline in growth rates for LCD glass substrates;
|
-
|
customer ability, most notably in the Display Technologies segment, to maintain profitable operations and obtain financing to fund their ongoing operations and manufacturing expansions and pay their receivables when due;
|
-
|
loss of significant customers;
|
-
|
fluctuations in supply chain inventory levels;
|
-
|
equity company activities, principally at Dow Corning;
|
-
|
changes in tax laws and regulations;
|
-
|
changes in accounting rules and standards;
|
-
|
the potential impact of legislation, government regulations, and other government action and investigations;
|
-
|
temporary idling of capacity or delaying expansion;
|
-
|
the ability to implement productivity, consolidation and cost reduction efforts, and to realize anticipated benefits;
|
-
|
restructuring actions and charges; and
|
-
|
other risks detailed in Corning’s SEC filings.
|
·
|
Exchange rate movements on financial instruments and transactions denominated in foreign currencies that impact earnings; and
|
·
|
Exchange rate movements upon conversion of net assets and net income of foreign subsidiaries for which the functional currency is not the U.S. dollar, which impact our net equity.
|
(a)
|
Management’s Annual Report on Internal Control Over Financial Reporting
|
(b)
|
Attestation Report of the Independent Registered Public Accounting Firm
|
(c)
|
Changes in Internal Control Over Financial Reporting
|
A
|
B
|
C
|
|||
Plan category
|
Number of
securities to
be issued
upon exercise
of outstanding
options, warrants
and rights
|
Weighted-average
exercise price
of outstanding
options, warrants
and rights
|
Number of securities
remaining available for
future issuance under
equity compensation
plans (excluding
securities reflected
in column A)
|
||
Equity compensation plans approved by security holders
(1)
|
42,738,000
|
$19.40
|
71,841,896
|
||
Equity compensation plans not approved by security holders
|
|||||
Total
|
42,738,000
|
$19.40
|
71,841,896
|
(1)
|
Shares indicated are total grants under the most recent shareholder approved plans as well as any shares remaining outstanding from any prior shareholder approved plans.
|
(a)
|
Documents filed as part of this report:
|
||||
Page
|
|||||
1.
|
Financial statements
|
||||
2.
|
Financial statement schedule:
|
||||
(i)
|
Valuation accounts and reserves
|
||||
See separate index to financial statements and financial statement schedules
|
(b)
|
Exhibits filed as part of this report:
|
|
2.1
|
Framework Agreement, dated as of October 22, 2013, by and among Samsung Display Co., Ltd.; Corning Incorporated and the other parties thereto. (Incorporated by reference to Exhibit 10.65 to Corning’s Form 10-K filed on February 10, 2014, as amended by its Form 10-K/A filed on March 21, 2014). The Company has omitted certain schedules, exhibits and similar attachments to the Framework Agreement pursuant to Item 601(b)(2) of Regulation S-K.
|
|
2.2
|
Transaction Agreement, dated December 10, 2015, by and between Corning Incorporated, The Dow Chemical Company, Dow Corning Corporation and HS Upstate Inc. (Incorporated by reference to Exhibit 2.1 of Corning’s Form 8-K filed on December 11, 2015).
|
|
2.3
|
Assignment Agreement, dated as of December 29, 2015, between Samsung Display Co., Ltd., Corning Incorporated, Corning Precision Materials Co., Ltd., and Corning Luxembourg S.àr.l., Corning Hungary Data Services Limited Liability Company, Corning Japan K.K., and Samsung Corning Advanced Glass LLC (Incorporated by reference to Exhibit 2.1 of Corning’s Form 8-K filed on December 29, 2015).
|
|
3 (i)
|
Restated Certificate of Incorporation dated April 27, 2012, filed with the Secretary of State of the State of New York on April 27, 2012 (Incorporated by reference to Exhibit 3(i) 1 of Corning’s Form 8-K filed on May 1, 2012).
|
|
3 (i)(1)
|
Certificate of Amendment to the Restated Certificate of Incorporation dated January 14, 2014, filed with the Secretary of State of the State of New York on January 14, 2014 (Incorporated by reference to Exhibit 3(i) of Corning’s Form 8-K filed on January 15, 2014).
|
|
3 (ii)
|
Amended and Restated By-Laws of Corning Incorporated, effective as of December 7, 2015 (Incorporated by reference to Exhibit 3(ii) of Corning’s Form 8-K filed December 7, 2015).
|
|
4.1
|
Indenture, dated November 8, 2000, by and between the Company and of The Bank of New York Mellon Trust Company, N.A. (successor to J. P. Morgan Chase & Co., formerly The Chase Manhattan Bank), as trustee (Incorporated by reference to Exhibit 4.01 to Corning’s Registration Statement on Form S-3, Registration Statement No. 333-57082). The Company agrees to furnish to the Commission on request copies of other instruments with respect to long-term debt.
|
|
4.2
|
Form of certificate for shares of the common stock (Incorporated by reference to Exhibit 4 to Corning’s registration statement on Form S-8 dated May 7, 2010 (Registration Statement No. 333-166642)). The terms of the Company’s Fixed Rate Cumulative Convertible Preferred Stock, Series A are reflected in the Certificate of Amendment to the Restated Certificate of Incorporation dated January 14, 2014, filed with the Secretary of State of the State of New York on January 14, 2014 and included as Exhibit 3(i)(1) hereto.
|
|
4.3
|
Shareholder Agreement, dated as of October 22, 2013, by and between Samsung Display Co., Ltd. and Corning Incorporated (Incorporated by reference to Exhibit 10.66 to Corning’s Form 10-K filed on February 10, 2014, as amended by its Form 10-K/A filed on March 21, 2014).
|
|
4.4
|
Standstill Agreement, dated as of October 22, 2013, by and among Samsung Electronics Co., Ltd., Samsung Display Co., Ltd. and Corning Incorporated (Incorporated by reference to Exhibit 10.67 to Corning’s Form 10-K filed on February 10, 2014, as amended by its Form 10-K/A filed on March 21, 2014).
|
|
10.1
|
2000 Employee Equity Participation Program and 2003 Amendments (Incorporated by reference to Exhibit 1 of Corning Proxy Statement, Definitive 14A filed March 10, 2003 for April 24, 2003 Annual Meeting of Shareholders).
|
10.2
|
2003 Variable Compensation Plan (Incorporated by reference to Exhibit 2 of Corning Proxy Statement, Definitive 14A filed March 10, 2003 for April 24, 2003 Annual Meeting of Shareholders).
|
||
10.3
|
2003 Equity Plan for Non-Employee Directors (Incorporated by reference to Exhibit 3 of Corning Proxy Statement, Definitive 14A filed March 10, 2003 for April 24, 2003 Annual Meeting of Shareholders).
|
||
10.4
|
Form of Officer Severance Agreement dated as of February 1, 2004 between Corning Incorporated and each of the following individuals: James P. Clappin, James B. Flaws, Kirk P. Gregg, and Lawrence D. McRae (Incorporated by reference to Exhibit 10.1 of Corning’s Form 10-Q filed May 4, 2004).
|
||
10.5
|
Form of Amendment dated as of February 1, 2004 to Change In Control Agreement dated as of October 4, 2000 between Corning Incorporated and the following individuals: James P. Clappin, James B. Flaws, Kirk P. Gregg, and Lawrence D. McRae (Incorporated by reference to Exhibit 10.4 of Corning’s Form 10-Q filed May 4, 2004).
|
||
10.6
|
Form of Change In Control Amendment dated as of October 4, 2000 between Corning Incorporated and the following individuals: James P. Clappin, James B. Flaws, Kirk P. Gregg and Lawrence D. McRae (Incorporated by reference to Exhibit 10.5 of Corning’s Form 10-Q filed May 4, 2004).
|
||
10.7
|
Amendment dated as of February 1, 2004 to Change In Control Agreement dated as of April 23, 2002 between Corning Incorporated and Wendell P. Weeks (Incorporated by reference to Exhibit 10.8 of Corning’s Form 10-Q filed May 4, 2004).
|
||
10.8
|
Change In Control Agreement dated as of April 23, 2002 between Corning Incorporated and Wendell P. Weeks (Incorporated by reference to Exhibit 10.9 of Corning’s Form 10-Q filed May 4, 2004).
|
||
10.9
|
Form of Corning Incorporated Incentive Stock Plan Agreement for Restricted Stock Grants (Incorporated by reference to Exhibit 10.1 of Corning’s Form 10-Q filed October 28, 2004).
|
||
10.10
|
Form of Corning Incorporated Incentive Stock Plan Agreement for Restricted Stock Retention Grants (Incorporated by reference to Exhibit 10.2 of Corning’s Form 10-Q filed October 28, 2004).
|
||
10.11
|
Form of Corning Incorporated Incentive Stock Option Agreement (Incorporated by reference to Exhibit 10.3 of Corning’s Form 10-Q filed October 28, 2004).
|
||
10.12
|
Form of Corning Incorporated Non-Qualified Stock Option Agreement (Incorporated by reference to Exhibit 10.4 of Corning’s Form 10-Q filed October 28, 2004).
|
||
10.13
|
2005 Employee Equity Participation Program (Incorporated by reference to Exhibit I of Corning Proxy Statement, Definitive 14A filed March 1, 2005 for April 28, 2005 Annual Meeting of Shareholders).
|
||
10.14
|
2006 Variable Compensation Plan (Incorporated by reference to Appendix J of Corning Proxy Statement, Definitive 14A filed March 8, 2006 for April 27, 2006 Annual Meeting of Shareholders).
|
||
10.15
|
Amended 2003 Equity Plan for Non-Employee Directors (Incorporated by reference to Appendix K of Corning Proxy Statement, Definitive 14A filed March 8, 2006 for April 27, 2006 Annual Meeting of Shareholders).
|
||
10.16
|
Amended Corning Incorporated 2003 Equity Plan for Non-Employee Directors effective October 4, 2006 (Incorporated by reference to Exhibit 10.28 of Corning’s Form 10-K filed February 25, 2007).
|
||
10.17
|
Amended Corning Incorporated 2005 Employee Equity Participation Program effective October 4, 2006 (Incorporated by reference to Exhibit 10.29 of Corning’s Form 10-K filed February 25, 2007).
|
||
10.18
|
Form of Corning Incorporated Incentive Stock Plan Agreement for Restricted Stock Grants, amended effective December 6, 2006 (Incorporated by reference to Exhibit 10.30 of Corning’s Form 10-K filed February 25, 2007).
|
||
10.19
|
Executive Supplemental Pension Plan effective February 7, 2007 and signed February 12, 2007 (Incorporated by reference to Exhibit 10.31 of Corning’s Form 10-K filed February 25, 2007).
|
||
10.20
|
Executive Supplemental Pension Plan as restated and signed April 10, 2007 (Incorporated by reference to Exhibit 10 of Corning’s Form 10-Q filed April 27, 2007).
|
||
10.21
|
Amendment No. 1 to 2006 Variable Compensation Plan dated October 3, 2007 (Incorporated by reference to Exhibit 10.34 of Corning’s Form 10-K filed February 15, 2008).
|
||
10.22
|
Corning Incorporated Goalsharing Plan dated October 3, 2007 (Incorporated by reference to Exhibit 10.35 of Corning’s Form 10-K filed February 15, 2008).
|
10.23
|
Corning Incorporated Performance Incentive Plan dated October 3, 2007 (Incorporated by reference to Exhibit 10.36 of Corning’s Form 10-K filed February 15, 2008).
|
|
10.24
|
Amendment No. 1 to Deferred Compensation Plan for Directors dated October 3, 2007 (Incorporated by reference to Exhibit 10.37 of Corning’s Form 10-K filed February 15, 2008).
|
|
10.25
|
Corning Incorporated Supplemental Pension Plan dated October 3, 2007 (Incorporated by reference to Exhibit 10.38 of Corning’s Form 10-K filed February 15, 2008).
|
|
10.26
|
Corning Incorporated Supplemental Investment Plan dated October 3, 2007 (Incorporated by reference to Exhibit 10.39 of Corning’s Form 10-K filed February 15, 2008).
|
|
10.27
|
Form of Corning Incorporated Incentive Stock Plan Agreement for Restricted Stock Grants, amended effective December 5, 2007 (Incorporated by reference to Exhibit 10.40 of Corning’s Form 10-K filed February 15, 2008).
|
|
10.28
|
Form of Corning Incorporated Non-Qualified Stock Option Agreement, amended effective December 5, 2007 (Incorporated by reference to Exhibit 10.41 of Corning’s Form 10-K filed February 15, 2008).
|
|
10.29
|
Amendment No. 2 dated February 13, 2008 and Amendment dated as of February 1, 2004 to Letter of Understanding between Corning Incorporated and Wendell P. Weeks, and Letter of Understanding dated April 23, 2002 between Corning Incorporated and Wendell P. Weeks (Incorporated by reference to Exhibit 10.42 of Corning’s Form 10-K filed February 15, 2008).
|
|
10.30
|
Form of Change in Control Agreement Amendment No. 2, effective December 5, 2007 (Incorporated by reference to Exhibit 10.43 of Corning’s Form 10-K filed February 15, 2008).
|
|
10.31
|
Form of Officer Severance Agreement Amendment, effective December 5, 2007 (Incorporated by reference to Exhibit 10.44 of Corning’s Form 10-K filed February 15, 2008).
|
|
10.32
|
Amendment No. 1 to Corning Incorporated Supplemental Investment Plan, approved December 17, 2007 (Incorporated by reference to Exhibit 10.45 of Corning’s Form 10-K filed February 15, 2008).
|
|
10.33
|
Amendment No. 1 to Corning Incorporated Supplemental Pension Plan, approved December 17, 2007 (Incorporated by reference to Exhibit 10.46 of Corning’s Form 10-K filed February 15, 2008).
|
|
10.34
|
Amendment No. 1 to Corning Incorporated Executive Supplemental Pension Plan, approved December 17, 2007 (Incorporated by reference to Exhibit 10.47 of Corning’s Form 10-K filed February 15, 2008).
|
|
10.35
|
Second Amended 2005 Employee Equity Participation Program (Incorporated by reference to Exhibit 10 of Corning’s Form 8-K filed April 25, 2008).
|
|
10.36
|
Amendment No. 2 to Executive Supplemental Pension Plan effective July 16, 2008 (Incorporated by reference to Exhibit 10 of Corning’s Form 10-Q filed July 30, 2008).
|
|
10.37
|
Form of Corning Incorporated Non-Qualified Stock Option Agreement effective as of December 3, 2008 (Incorporated by reference to Exhibit 10.50 of Corning’s Form 10-K filed February 24, 2009).
|
|
10.38
|
Form of Corning Incorporated Incentive Stock Right Agreement effective as of December 3, 2008 (Incorporated by reference to Exhibit 10.51 of Corning’s Form 10-K filed February 24, 2009).
|
|
10.39
|
Form of Corning Incorporated Incentive Stock Plan Agreement for Restricted Stock Grants effective December 3, 2008 (Incorporated by reference to Exhibit 10.52 of Corning’s Form 10-K filed February 24, 2009).
|
|
10.40
|
Form of Change of Control Agreement Amendment No. 3 effective December 19, 2008 (Incorporated by reference to Exhibit 10.53 of Corning’s Form 10-K filed February 24, 2009).
|
|
10.41
|
Form of Officer Severance Agreement Amendment No. 2 effective December 19, 2008 (Incorporated by reference to Exhibit 10.54 of Corning’s Form 10-K filed February 24, 2009).
|
|
10.42
|
Amendment No. 3 dated December 19, 2008 to Letter of Understanding dated April 23, 2002 between Corning Incorporated and Wendell P. Weeks (Incorporated by reference to Exhibit 10.55 of Corning’s Form 10-K filed February 24, 2009).
|
|
10.43
|
Amendment No. 2 to Corning Incorporated Supplemental Investment Plan approved April 29, 2009 (Incorporated by reference to Exhibit 10.1 of Corning’s Form 10-Q filed July 29, 2009).
|
10.44
|
Amendment No. 2 to Deferred Compensation Plan dated April 29, 2009 (Incorporated by reference to Exhibit 10.2 of Corning’s Form 10-Q filed July 29, 2009).
|
|
10.45
|
Amendment No. 2 to 2006 Variable Compensation Plan dated December 2, 2009 (Incorporated by reference to Exhibit 10.58 of Corning’s Form 10-K filed February 10, 2010).
|
|
10.46
|
Form of Corning Incorporated Cash Performance Unit Agreement, effective December 2, 2009 (Incorporated by reference to Exhibit 10.59 of Corning’s Form 10-K filed February 10, 2010).
|
|
10.47
|
Form of Corning Incorporated Incentive Stock Right Agreement for Time-Based Restricted Stock Units, effective December 2, 2009 (Incorporated by reference to Exhibit 10.60 of Corning’s Form 10-K filed February 10, 2010).
|
|
10.48
|
2010 Variable Compensation Plan (Incorporated by reference to Appendix A of Corning’s Proxy Statement, Definitive 14A filed March 15, 2010 for April 29, 2010 Annual Meeting of Shareholders).
|
|
10.49
|
2010 Equity Plan for Non-Employee Directors (Incorporated by reference to Appendix B of Corning Proxy Statement, Definitive 14A filed March 15, 2010 for April 29, 2010 Annual Meeting of Shareholders).
|
|
10.50
|
Compensation Arrangement for Retention of James B. Flaws approved by the Corning Board Compensation Committee on January 3, 2011 (Incorporated by reference to Corning’s Form 8-K filed January 3, 2011).
|
|
10.51
|
Amendment No. 2 to Corning Incorporated Supplemental Pension Plan dated December 18, 2008 (Incorporated by reference to Exhibit 10.66 of Corning’s Form 10-K filed February 10, 2011).
|
|
10.52
|
Form of Corning Incorporated Incentive Stock Right Agreement for Time-Based Incentive Stock Rights, effective January 3, 2011 (Incorporated by reference to Exhibit 10.67 of Corning’s Form 10-K filed February 10, 2011).
|
|
10.53
|
Form of Corning Incorporated Cash Performance Unit Agreement, effective January 3, 2011 (Incorporated by reference to Exhibit 10.68 of Corning’s Form 10-K filed February 10, 2011).
|
|
10.54
|
Amendment No. 2 to Deferred Compensation Plan for Directors dated February 1, 2012 (Incorporated by reference to Exhibit 10.62 of Corning’s Form 10-K filed February 13, 2012).
|
|
10.55
|
Amendment No. 3 to Corning Incorporated Executive Supplemental Pension Plan effective December 31, 2008 (Incorporated by reference to Exhibit 10.59 of Corning’s Form 10-K filed February 13, 2013).
|
|
10.56
|
2012 Long-Term Incentive Plan (Incorporated by reference to Appendix A of Corning Proxy Statement, Definitive 14A filed March 13, 2012, for April 26, 2012 Annual Meeting of Shareholders).
|
|
10.57
|
Amendment No. 3 to Deferred Compensation Plan for Directors dated December 28, 2012 (Incorporated by reference to Exhibit 10.61 of Corning’s Form 10-K filed February 13, 2013).
|
|
10.58
|
Amendment No. 4 to Corning Incorporated Executive Supplemental Pension Plan effective December 31, 2012 (Incorporated by reference to Exhibit 10.62 of Corning’s Form 10-K filed February 13, 2013).
|
|
10.59
|
Form of Corning Incorporated Cash Performance Unit Agreement, effective January 1, 2014 (Incorporated by reference to Exhibit 10.69 to Corning’s Form 10-K filed on February 10, 2014, as amended by its Form 10-K/A filed on March 21, 2014).
|
|
10.60
|
Amendment No. 4 to Deferred Compensation Plan for Directors dated September 30, 2014. (Incorporated by reference to Exhibit 10.1 of Corning’s Form 10-Q filed on October 29, 2014).
|
|
10.61
|
Amended and Restated Credit Agreement dated as of September 30, 2014, among Corning Incorporated, JPMorgan Chase Bank, N.A., Citibank, N.A., Bank of America, N.A., Deutsche Bank AG New York Branch, The Bank of Tokyo-Mitsubishi UFJ, Ltd., HSBC Bank USA, National Association, Standard Chartered Bank, Sumitomo Mitsui Banking Corporation, Barclays Bank PLC, Goldman Sachs Bank USA, Wells Fargo Bank, National Association, Bank of China New York Branch, and The Bank of New York Mellon (Incorporated by reference to Exhibit 10.1 to Corning’s Form 8-K filed on October 3, 2014).
|
|
10.62
|
2014 Variable Compensation Plan (Incorporated by reference to Appendix B of Corning’s Proxy Statement, Definitive 14A filed March 13, 2014 for the April 29, 2014 Annual Meeting of Shareholders).
|
|
10.63
|
Form of Corning Incorporated Incentive Stock Rights Agreement, effective January 1, 2015. (Incorporated by reference to Exhibit 10.64 of Corning’s Form 10-K filed February 13, 2015).
|
10.64
|
Form of Corning Incorporated Cash Performance Unit Agreement, effective January 1, 2015 (Incorporated by reference to Exhibit 10.65 of Corning’s Form 10-K filed February 13, 2015).
|
|
10.65
|
Form of Officer Severance Agreement dated as of January 1, 2015 between Corning Incorporated and each of the following individuals: Martin J. Curran; Eric S. Musser; Christine M. Pambianchi; and R. Tony Tripeny (Incorporated by reference to Exhibit 10.1 of Corning’s Form 10-Q filed July 30, 2015).
|
|
10.66
|
Form of Change in Control Agreement dated as of January 1, 2015 between Corning Incorporated and each of the following individuals: Martin J. Curran; Eric S. Musser; Christine M. Pambianchi; and R. Tony Tripeny (Incorporated by reference to Exhibit 10.2 of Corning’s Form 10-Q filed July 30, 2015).
|
|
10.67
|
Master Confirmation – Uncollared Accelerated Share Repurchase, dated October 28, 2015 by and between Morgan Stanley & Co. LLC and Corning Incorporated.
|
|
10.68
|
Tax Matters Agreement, dated December 10, 2015, by and between Corning Incorporated, The Dow Chemical Company, Dow Corning Corporation and HS Upstate Inc. (Incorporated by reference to Exhibit 1.2 of Corning’s Form 8-K filed on December 11, 2015).
|
|
10.69
|
Form of Corning Incorporated Incentive Stock Rights Agreement, effective January 1, 2016.
|
|
10.70
|
Form of Corning Incorporated Cash Performance Unit Agreement, effective January 1, 2016.
|
|
12
|
Computation of Ratio of Earnings to Fixed Charges and
Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends.
|
|
14
|
Corning Incorporated Code of Ethics for Chief Executive Officer and Financial Executives, and Code of Conduct for Directors and Executive Officers (Incorporated by reference to Appendix G of Corning Proxy Statement, Definitive 14A filed March 13, 2012 for April 26, 2012 Annual Meeting of Shareholders).
|
|
21
|
Subsidiaries of the Registrant at December 31, 2015.
|
|
23.1
|
Consent of PricewaterhouseCoopers LLP, Independent Registered Public Accounting Firm.
|
|
23.2
|
Consent of PricewaterhouseCoopers LLP.
|
|
23.3
|
Consent of Samil PricewaterhouseCoopers.
|
|
24
|
Powers of Attorney.
|
|
31.1
|
Certification Pursuant to Rule 13a-15(e) and 15d-15(e), As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
31.2
|
Certification Pursuant to Rule 13a-15(e) and 15d-15(e), As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
32
|
Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
101.INS
|
XBRL Instance Document
|
|
101.SCH
|
XBRL Taxonomy Extension Schema Document
|
|
101.CAL
|
XBRL Taxonomy Calculation Linkbase Document
|
|
101.LAB
|
XBRL Taxonomy Label Linkbase Document
|
|
101.PRE
|
XBRL Taxonomy Presentation Linkbase Document
|
|
101.DEF
|
XBRL Taxonomy Definition Document
|
(c)
|
Financial Statements:
|
||
1.
|
|||
2.
|
By
|
/s/ Wendell P. Weeks
|
Chairman of the Board of Directors, Chief
|
February 12, 2016
|
|||
(Wendell P. Weeks)
|
Executive Officer and President
|
|||||
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the date indicated.
|
||||||
Capacity
|
Date
|
|||||
/s/ Wendell P. Weeks
|
Chairman of the Board of Directors, Chief Executive Officer and President
|
February 12, 2016
|
||||
(Wendell P. Weeks)
|
(Principal Executive Officer)
|
|||||
/s/ R. Tony Tripeny
|
Senior Vice President and Chief Financial Officer
|
February 12, 2016
|
||||
(R. Tony Tripeny)
|
(Principal Financial Officer)
|
|||||
/s/ Edward A. Schlesinger
|
Vice President and Corporate Controller
|
February 12, 2016
|
||||
(Edward A. Schlesinger)
|
(Principal Accounting Officer)
|
|||||
*
|
Director
|
February 12, 2016
|
||||
(Donald W. Blair)
|
||||||
*
|
Director
|
February 12, 2016
|
||||
(Stephanie A. Burns)
|
||||||
*
|
Director
|
February 12, 2016
|
||||
(John A. Canning, Jr.)
|
||||||
*
|
Director
|
February 12, 2016
|
||||
(Richard T. Clark)
|
||||||
*
|
Director
|
February 12, 2016
|
||||
(Robert F. Cummings, Jr.)
|
||||||
*
|
Director
|
February 12, 2016
|
||||
(Deborah A. Henretta)
|
||||||
*
|
Director
|
February 12, 2016
|
||||
(Daniel P. Huttenlocher)
|
||||||
*
|
Director
|
February 12, 2016
|
||||
(Kurt M. Landgraf)
|
||||||
*
|
Director
|
February 12, 2016
|
||||
(Kevin J. Martin)
|
*
|
Director
|
February 12, 2016
|
||||
(Deborah D. Rieman)
|
||||||
*
|
Director
|
February 12, 2016
|
||||
(Hansel E. Tookes II)
|
||||||
*
|
Director
|
February 12, 2016
|
||||
(Mark S. Wrighton)
|
||||||
*By
|
/s/ Lewis A. Steverson
|
|||||
(Lewis A. Steverson, Attorney-in-fact)
|
Page
|
|||||
1.
|
|||||
2.
|
|||||
3.
|
|||||
4.
|
|||||
5.
|
|||||
6.
|
|||||
7.
|
|||||
8.
|
|||||
9.
|
|||||
10.
|
|||||
11.
|
|||||
12
|
|||||
13.
|
|||||
14.
|
|||||
15.
|
|||||
16.
|
|||||
17.
|
|||||
18.
|
|||||
19.
|
|||||
20.
|
|||||
Financial Statement Schedule
|
|||||
II.
|
|||||
Corning Incorporated and Subsidiary Companies
|
Years ended December 31,
|
||||||||
(In millions, except per share amounts)
|
2015
|
2014
|
2013
|
|||||
Net sales
|
$
|
9,111
|
$
|
9,715
|
$
|
7,819
|
||
Cost of sales
|
5,458
|
5,663
|
4,495
|
|||||
Gross margin
|
3,653
|
4,052
|
3,324
|
|||||
Operating expenses:
|
||||||||
Selling, general and administrative expenses
|
1,523
|
1,211
|
1,126
|
|||||
Research, development and engineering expenses
|
769
|
815
|
710
|
|||||
Amortization of purchased intangibles
|
54
|
33
|
31
|
|||||
Restructuring, impairment and other charges (Note 2)
|
71
|
67
|
||||||
Asbestos litigation (credit) charges (Note 7)
|
(15)
|
(9)
|
19
|
|||||
Operating income
|
1,322
|
1,931
|
1,371
|
|||||
Equity in earnings of affiliated companies (Note 7)
|
299
|
266
|
547
|
|||||
Interest income
|
21
|
26
|
8
|
|||||
Interest expense
|
(140)
|
(123)
|
(120)
|
|||||
Transaction-related gain, net (Note 8)
|
74
|
|||||||
Foreign currency hedge gain, net
|
85
|
1,411
|
622
|
|||||
Other (expense) income, net
|
(101)
|
(17)
|
45
|
|||||
Income before income taxes
|
1,486
|
3,568
|
2,473
|
|||||
Provision for income taxes (Note 6)
|
(147)
|
(1,096)
|
(512)
|
|||||
Net income attributable to Corning Incorporated
|
$
|
1,339
|
$
|
2,472
|
$
|
1,961
|
||
Earnings per common share attributable to Corning Incorporated:
|
||||||||
Basic (Note 18)
|
$
|
1.02
|
$
|
1.82
|
$
|
1.35
|
||
Diluted (Note 18)
|
$
|
1.00
|
$
|
1.73
|
$
|
1.34
|
||
Dividends declared per common share
(1)
|
$
|
0.36
|
$
|
0.52
|
$
|
0.39
|
(1)
|
The first quarter 2015 dividend was declared on December 3, 2014.
|
Corning Incorporated and Subsidiary Companies
|
Years ended December 31,
|
||||||||
(In millions)
|
2015
|
2014
|
2013
|
|||||
Net income attributable to Corning Incorporated
|
$
|
1,339
|
$
|
2,472
|
$
|
1,961
|
||
Foreign currency translation adjustments and other
|
(590)
|
(1,073)
|
(682)
|
|||||
Net unrealized gains (losses) on investments
|
1
|
(1)
|
2
|
|||||
Unamortized gains (losses) and prior service (costs) credits for postretirement benefit plans
|
121
|
(281)
|
392
|
|||||
Net unrealized (losses) gains on designated hedges
|
(36)
|
4
|
(24)
|
|||||
Other comprehensive loss, net of tax (Note 17)
|
(504)
|
(1,351)
|
(312)
|
|||||
Comprehensive income attributable to Corning Incorporated
|
$
|
835
|
$
|
1,121
|
$
|
1,649
|
Corning Incorporated and Subsidiary Companies
|
December 31,
|
|||||
(In millions, except share and per share amounts)
|
2015
|
2014
|
|||
Assets
|
|||||
Current assets:
|
|||||
Cash and cash equivalents
|
$
|
4,500
|
$
|
5,309
|
|
Short-term investments, at fair value (Note 3)
|
100
|
759
|
|||
Total cash, cash equivalents and short-term investments
|
4,600
|
6,068
|
|||
Trade accounts receivable, net of doubtful accounts and allowances - $48 and $47
|
1,372
|
1,501
|
|||
Inventories, net of inventory reserves - $146 and $127 (Note 5)
|
1,385
|
1,322
|
|||
Deferred income taxes (Note 6)
|
248
|
||||
Other current assets (Note 11 and 15)
|
912
|
1,099
|
|||
Total current assets
|
8,269
|
10,238
|
|||
Investments (Note 7)
|
1,975
|
1,801
|
|||
Property, plant and equipment, net of accumulated depreciation - $9,188 and $8,332 (Note 9)
|
12,648
|
12,766
|
|||
Goodwill, net (Note 10)
|
1,380
|
1,150
|
|||
Other intangible assets, net (Note 10)
|
706
|
497
|
|||
Deferred income taxes (Note 6)
|
2,056
|
1,889
|
|||
Other assets (Note 8, 11 and 15)
|
1,513
|
1,722
|
|||
Total Assets
|
$
|
28,547
|
$
|
30,063
|
|
Liabilities and Equity
|
|||||
Current liabilities:
|
|||||
Current portion of long-term debt and short-term borrowings (Note 12)
|
$
|
572
|
$
|
36
|
|
Accounts payable
|
934
|
997
|
|||
Other accrued liabilities (Note 11 and 14)
|
1,308
|
1,291
|
|||
Total current liabilities
|
2,814
|
2,324
|
|||
Long-term debt (Note 12)
|
3,910
|
3,227
|
|||
Postretirement benefits other than pensions (Note 13)
|
718
|
814
|
|||
Other liabilities (Note 11 and 14)
|
2,242
|
2,046
|
|||
Total liabilities
|
9,684
|
8,411
|
|||
Commitments and contingencies (Note 14)
|
|||||
Shareholders’ equity (Note 17):
|
|||||
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: 1,681 million and 1,672 million
|
840
|
836
|
|||
Additional paid-in capital – common stock
|
13,352
|
13,456
|
|||
Retained earnings
|
13,832
|
13,021
|
|||
Treasury stock, at cost; shares held: 551 million and 398 million
|
(9,725)
|
(6,727)
|
|||
Accumulated other comprehensive loss
|
(1,811)
|
(1,307)
|
|||
Total Corning Incorporated shareholders’ equity
|
18,788
|
21,579
|
|||
Noncontrolling interests
|
75
|
73
|
|||
Total equity
|
18,863
|
21,652
|
|||
Total Liabilities and Equity
|
$
|
28,547
|
$
|
30,063
|
Corning Incorporated and Subsidiary Companies
|
Years ended December 31,
|
||||||||
(In millions)
|
2015
|
2014
|
2013
|
|||||
Cash Flows from Operating Activities:
|
||||||||
Net income
|
$
|
1,339
|
$
|
2,472
|
$
|
1,961
|
||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
Depreciation
|
1,130
|
1,167
|
971
|
|||||
Amortization of purchased intangibles
|
54
|
33
|
31
|
|||||
Restructuring, impairment and other charges
|
71
|
67
|
||||||
Stock compensation charges
|
46
|
58
|
54
|
|||||
Equity in earnings of affiliated companies
|
(299)
|
(266)
|
(547)
|
|||||
Dividends received from affiliated companies
|
143
|
1,704
|
630
|
|||||
Deferred tax provision
|
54
|
612
|
189
|
|||||
Restructuring payments
|
(40)
|
(39)
|
(35)
|
|||||
Customer deposits
|
197
|
|||||||
Employee benefit payments (in excess of) less than expense
|
(52)
|
(52)
|
52
|
|||||
Gains on foreign currency hedges related to translated earnings
|
(80)
|
(1,369)
|
(435)
|
|||||
Unrealized translation losses on transactions
|
268
|
431
|
96
|
|||||
Contingent consideration fair value adjustment
|
(13)
|
(249)
|
||||||
Changes in certain working capital items:
|
||||||||
Trade accounts receivable
|
162
|
(16)
|
(29)
|
|||||
Inventories
|
(77)
|
2
|
(247)
|
|||||
Other current assets
|
(57)
|
(16)
|
34
|
|||||
Accounts payable and other current liabilities
|
(146)
|
(3)
|
(23)
|
|||||
Other, net
|
180
|
169
|
18
|
|||||
Net cash provided by operating activities
|
2,809
|
4,709
|
2,787
|
|||||
Cash Flows from Investing Activities:
|
||||||||
Capital expenditures
|
(1,250)
|
(1,076)
|
(1,019)
|
|||||
Acquisitions of businesses, net of cash (paid) received
|
(732)
|
66
|
(68)
|
|||||
Proceeds from sale of a business
|
12
|
|||||||
Investment in unconsolidated entities
|
(33)
|
(109)
|
(526)
|
|||||
Proceeds from loan repayments from unconsolidated entities
|
6
|
23
|
8
|
|||||
Short-term investments – acquisitions
|
(969)
|
(1,398)
|
(1,406)
|
|||||
Short-term investments – liquidations
|
1,629
|
1,167
|
2,026
|
|||||
Premium on purchased collars
|
(107)
|
|||||||
Realized gains on foreign currency hedges related to translated earnings
|
653
|
361
|
87
|
|||||
Other, net
|
(1)
|
4
|
1
|
|||||
Net cash used in investing activities
|
(685)
|
(962)
|
(1,004)
|
|||||
Cash Flows from Financing Activities:
|
||||||||
Retirement of long-term debt, net
|
(498)
|
|||||||
Net repayments of short-term borrowings and current portion of long-term debt
|
(12)
|
(52)
|
(71)
|
|||||
Proceeds from issuance of long-term debt
|
745
|
248
|
||||||
Proceeds from issuance of short-term debt, net
|
3
|
29
|
||||||
Proceeds from issuance of commercial paper
|
481
|
|||||||
(Payments) proceeds from the settlement of interest rate swap agreements
|
(10)
|
33
|
||||||
Principal payments under capital lease obligations
|
(6)
|
(6)
|
(7)
|
|||||
Proceeds from issuance of preferred stock
(1)
|
400
|
|||||||
Proceeds received for asset financing and related incentives, net
|
1
|
1
|
276
|
|||||
Payments to acquire noncontrolling interest
|
(47)
|
|||||||
Proceeds from the exercise of stock options
|
102
|
116
|
85
|
|||||
Repurchases of common stock for treasury
|
(3,228)
|
(2,483)
|
(1,516)
|
|||||
Dividends paid
|
(679)
|
(591)
|
(566)
|
|||||
Net cash used in financing activities
|
(2,603)
|
(2,586)
|
(2,063)
|
|||||
Effect of exchange rates on cash
|
(330)
|
(556)
|
(4)
|
|||||
Net (decrease) increase in cash and cash equivalents
|
(809)
|
605
|
(284)
|
|||||
Cash and cash equivalents at beginning of year
|
5,309
|
4,704
|
4,988
|
|||||
Cash and cash equivalents at end of year
|
$
|
4,500
|
$
|
5,309
|
$
|
4,704
|
(1)
|
In the first quarter of 2014, Corning issued 1,900 shares of Preferred Stock to Samsung Display Co., Ltd. in connection with the acquisition of their equity interests in Samsung Corning Precision Materials Co., Ltd. (Note 8). Corning also issued to Samsung Display an additional 400 shares of Preferred Stock at closing, for an issue price of $400 million in cash (Note 17).
|
Corning Incorporated and Subsidiary Companies
|
(In millions)
|
Convertible
preferred
stock
|
Common
stock
|
Additional
paid-in
capital-common
|
Retained
earnings
|
Treasury
stock
|
Accumulated
other
comprehensive
income (loss)
|
Total Corning
Incorporated
shareholders’
equity
|
Non-
controlling
interests
|
Total
|
|||||||||
Balance, December 31, 2012
|
$
|
825
|
$
|
13,146
|
$
|
9,932
|
$
|
(2,773)
|
$
|
356
|
$
|
21,486
|
$
|
47
|
$
|
21,533
|
||
Net income
|
1,961
|
1,961
|
1,961
|
|||||||||||||||
Other comprehensive loss
|
(312)
|
(312)
|
(312)
|
|||||||||||||||
Purchase of common stock for treasury
|
(200)
|
(1,316)
|
(1,516)
|
(1,516)
|
||||||||||||||
Shares issued to benefit plans and for option exercises
|
6
|
139
|
(1)
|
144
|
144
|
|||||||||||||
Dividends on shares
|
(566)
|
(566)
|
(566)
|
|||||||||||||||
Other, net
|
(19)
|
(7)
|
(9)
|
(35)
|
2
|
(33)
|
||||||||||||
Balance, December 31, 2013
|
$
|
831
|
$
|
13,066
|
$
|
11,320
|
$
|
(4,099)
|
$
|
44
|
$
|
21,162
|
$
|
49
|
$
|
21,211
|
||
Net income
|
2,472
|
2,472
|
3
|
2,475
|
||||||||||||||
Other comprehensive loss
|
(1,351)
|
(1,351)
|
(1)
|
(1,352)
|
||||||||||||||
Shares issued for acquisition of equity investment company
|
$
|
1,900
|
1,900
|
15
|
1,915
|
|||||||||||||
Shares issued for cash
|
400
|
400
|
400
|
|||||||||||||||
Purchase of common stock for treasury
|
129
|
(2,612)
|
(2,483)
|
(2,483)
|
||||||||||||||
Shares issued to benefit plans and for option exercises
|
5
|
261
|
(2)
|
264
|
264
|
|||||||||||||
Dividends on shares
|
(771)
|
(771)
|
(771)
|
|||||||||||||||
Other, net
|
(14)
|
(14)
|
7
|
(7)
|
||||||||||||||
Balance, December 31, 2014
|
$
|
2,300
|
$
|
836
|
$
|
13,456
|
$
|
13,021
|
$
|
(6,727)
|
$
|
(1,307)
|
$
|
21,579
|
$
|
73
|
$
|
21,652
|
Net income
|
1,339
|
1,339
|
9
|
1,348
|
||||||||||||||
Other comprehensive loss
|
(504)
|
(504)
|
(1)
|
(505)
|
||||||||||||||
Purchase of common stock for treasury
|
(250)
|
(2,978)
|
(3,228)
|
(3,228)
|
||||||||||||||
Shares issued to benefit plans and for option exercises
|
4
|
146
|
(1)
|
149
|
149
|
|||||||||||||
Dividends on shares
|
(528)
|
(528)
|
(528)
|
|||||||||||||||
Other, net
|
(19)
|
(19)
|
(6)
|
(25)
|
||||||||||||||
Balance, December 31, 2015
|
$
|
2,300
|
$
|
840
|
$
|
13,352
|
$
|
13,832
|
$
|
(9,725)
|
$
|
(1,811)
|
$
|
18,788
|
$
|
75
|
$
|
18,863
|
Corning Incorporated and Subsidiary Companies
|
Years ended December 31,
|
||||||||
2015
|
2014
|
2013
|
||||||
Non-cash transactions:
|
||||||||
Accruals for capital expenditures
|
$
|
298
|
$
|
358
|
$
|
185
|
||
Cash paid for interest and income taxes:
|
||||||||
Interest
(1)
|
$
|
178
|
$
|
171
|
$
|
182
|
||
Income taxes, net of refunds received
|
$
|
253
|
$
|
577
|
$
|
469
|
(1)
|
Included in this amount are approximately $35 million, $40 million and $35 million of interest costs that were capitalized as part of property, plant and equipment, net of accumulated depreciation, in 2015, 2014 and 2013, respectively.
|
Asset type
|
Range of useful life
|
|||
Computer hardware and software
|
3
|
to
|
7
|
years
|
Manufacturing equipment
|
2
|
to
|
15
|
years
|
Furniture and fixtures
|
5
|
to
|
10
|
years
|
Transportation equipment
|
3
|
to
|
20
|
years
|
·
|
Absence of our ability to recover the carrying amount;
|
·
|
Inability of the equity affiliate to sustain an earnings capacity which would justify the carrying amount of the investment; and
|
·
|
Significant litigation, bankruptcy or other events that could impact recoverability.
|
Reserve at
January 1,
2014
|
Net
Charges/
Reversals
|
Non cash
adjustments
|
Cash
payments
|
Reserve at
December 31,
2014
|
||||||||||
Restructuring:
|
||||||||||||||
Employee related costs
|
$
|
36
|
$
|
48
|
$
|
(9)
|
$
|
(31)
|
$
|
44
|
||||
Other charges (credits)
|
8
|
1
|
(1)
|
(8)
|
||||||||||
Total restructuring activity
|
$
|
44
|
$
|
49
|
$
|
(10)
|
$
|
(39)
|
$
|
44
|
||||
Impairment charges and disposal of long-lived assets:
|
$
|
22
|
||||||||||||
Total restructuring, impairment and other charges
|
$
|
71
|
Reserve at
January 1,
2013
|
Net
Charges/
Reversals
|
Non cash
adjustments
|
Cash
payments
|
Reserve at
December 31,
2013
|
||||||||||
Restructuring:
|
||||||||||||||
Employee related costs
|
$
|
38
|
$
|
34
|
$
|
(4)
|
$
|
(32)
|
$
|
36
|
||||
Other charges (credits)
|
4
|
7
|
(3)
|
8
|
||||||||||
Total restructuring activity
|
$
|
42
|
$
|
41
|
$
|
(4)
|
$
|
(35)
|
$
|
44
|
||||
Impairment charges and disposal of long-lived assets:
|
$
|
26
|
||||||||||||
Total restructuring, impairment and other charges
|
$
|
67
|
Amortized cost
December 31,
|
Fair value
December 31,
|
||||||||||
2015
|
2014
|
2015
|
2014
|
||||||||
Bonds, notes and other securities:
|
|||||||||||
U.S. government and agencies
|
$
|
100
|
$
|
759
|
$
|
100
|
$
|
759
|
|||
Total short-term investments
|
$
|
100
|
$
|
759
|
$
|
100
|
$
|
759
|
|||
Asset-backed securities
|
$
|
37
|
$
|
42
|
$
|
33
|
$
|
38
|
|||
Total long-term investments
|
$
|
37
|
$
|
42
|
$
|
33
|
$
|
38
|
Less than one year
|
$ 70
|
Due in 1-5 years
|
30
|
Due in 5-10 years
|
|
Due after 10 years
|
33
|
Total
|
$133
|
(in millions)
|
Number of
securities
in a loss
position
|
December 31, 2015
|
|||||||||||
12 months or greater
|
Total
|
||||||||||||
Fair
value
|
Unrealized
losses
(1)
|
Fair
value
|
Unrealized
losses
|
||||||||||
Asset-backed securities
|
21
|
$
|
33
|
$
|
(4)
|
$
|
33
|
$
|
(4)
|
||||
Total long-term investments
|
21
|
$
|
33
|
$
|
(4)
|
$
|
33
|
$
|
(4)
|
(1)
|
Unrealized losses in securities less than 12 months were not significant.
|
(in millions)
|
Number of
securities
in a loss
position
|
December 31, 2014
|
|||||||||||
12 months or greater
|
Total
|
||||||||||||
Fair
value
|
Unrealized
losses
(1)
|
Fair
value
|
Unrealized
losses
|
||||||||||
Asset-backed securities
|
21
|
$
|
37
|
$
|
(4)
|
$
|
37
|
$
|
(4)
|
||||
Total long-term investments
|
21
|
$
|
37
|
$
|
(4)
|
$
|
37
|
$
|
(4)
|
(1)
|
Unrealized losses in securities less than 12 months were not significant.
|
December 31,
|
|||||
2015
|
2014
|
||||
Finished goods
|
$
|
633
|
$
|
586
|
|
Work in process
|
264
|
255
|
|||
Raw materials and accessories
|
200
|
202
|
|||
Supplies and packing materials
|
288
|
279
|
|||
Total inventories, net of inventory reserves
|
$
|
1,385
|
$
|
1,322
|
Years ended December 31,
|
||||||||
2015
|
2014
|
2013
|
||||||
U.S. companies
|
$
|
426
|
$
|
2,384
|
$
|
1,274
|
||
Non-U.S. companies
|
1,060
|
1,184
|
1,199
|
|||||
Income before income taxes
|
$
|
1,486
|
$
|
3,568
|
$
|
2,473
|
Years ended December 31,
|
||||||||
2015
|
2014
|
2013
|
||||||
Current:
|
||||||||
Federal
|
$
|
40
|
$
|
38
|
$
|
3
|
||
State and municipal
|
20
|
32
|
12
|
|||||
Foreign
|
33
|
414
|
308
|
|||||
Deferred:
|
||||||||
Federal
|
144
|
411
|
112
|
|||||
State and municipal
|
30
|
(9)
|
50
|
|||||
Foreign
|
(120)
|
210
|
27
|
|||||
Provision for income taxes
|
$
|
147
|
$
|
1,096
|
$
|
512
|
Years ended December 31,
|
||||||||
2015
|
2014
|
2013
|
||||||
Statutory U.S. income tax rate
|
35.0%
|
35.0%
|
35.0%
|
|||||
State income tax (benefit), net of federal effect
|
0.1
|
4.9
|
(9)
|
0.6
|
||||
Tax holidays
(1)
|
(0.5)
|
(0.4)
|
(1.2)
|
|||||
Investment and other tax credits
(2)
|
(1.7)
|
(0.3)
|
(2.0)
|
|||||
Rate difference on foreign earnings
|
(19.8)
|
(11)
|
(8.3)
|
(8.1)
|
(4)
|
|||
Uncertain tax positions
|
4.3
|
(10)
|
(0.1)
|
0.2
|
||||
Equity earnings impact
(3)
|
(5.4)
|
(2.0)
|
(6.6)
|
|||||
Valuation allowances
|
(4.2)
|
(7)
|
0.8
|
(6)
|
3.1
|
(5)
|
||
Other items, net
|
2.1
|
1.1
|
(8)
|
(0.3)
|
||||
Effective income tax (benefit) rate
|
9.9%
|
30.7%
|
20.7%
|
(1)
|
Primarily related to a subsidiary in Taiwan operating under tax holiday arrangements. The nature and extent of such arrangements vary, and the benefits of existing arrangements phase out in future years (through 2018). The impact of tax holidays on net income per share on a diluted basis was $0.01 in 2015, $0.01 in 2014 and $0.02 in 2013.
|
(2)
|
Primarily related to research and development and other credits in the U.S.
|
(3)
|
Equity in earnings of nonconsolidated affiliates reported in the financials net of tax. The difference between 2013-2014 was due to the change of Samsung Corning Precision Materials from an equity company to a consolidated entity.
|
(4)
|
In 2013, $74 million of tax benefit increase was due to $37 million expense recorded in 2012 that was reversed in the first quarter of 2013 as a result of the retroactive application of the American Taxpayer Relief Act enacted on January 3, 2013. In 2013, the additional increase in the benefit was attributable to excess foreign tax credits realized in U.S. from a taxable intercompany loan.
|
(5)
|
Primarily related to change in judgment on the realizability of Australia and certain state deferred tax assets.
|
(6)
|
$177 million tax expense related to change in judgment on the realizability of Germany and Japan deferred tax assets is partially offset with benefit from state deferred tax asset valuation allowance reductions, including the valuation allowance relating to the New York State attribute reduction discussed in (9) below.
|
(7)
|
$100 million tax benefit primarily related to change in judgment on the realizability of Germany and Japan deferred tax assets is partially offset with tax expense from U.S. state and China deferred tax allowance increases.
|
(8)
|
Includes in 2014, $9 million benefit for domestic manufacturing deduction and $46 million of tax expense related to out of period transfer pricing adjustments. The impact of these corrections is not material to any individual period previously presented.
|
(9)
|
Includes $100 million tax expense related to the write-off of New York State tax attributes for a state law change that were offset with full valuation allowance.
|
(10)
|
Unrecognized tax benefit reserve was primarily for tax positions taken related to transfer pricing of which $31 million tax expense is related to out of period adjustments. The impact of these corrections is not material to any individual period previously presented. Since the Company operates in a number of countries with income tax treaties, an offsetting benefit was recorded where it believes it is more-likely-than-not to receive competent authority relief.
|
(11)
|
Tax benefit is primarily for excess foreign tax credits resulting from the inclusion of high-taxed foreign earnings in U.S. income and the income of Taiwan and Korea subsidiaries with lower statutory rates than the U.S. The amount of tax benefit in 2015 is relatively consistent with 2014. The change in the effective tax rate reconciliation percentage is driven by the significant decrease in the gain on our foreign currency translation hedges in 2015 versus 2014.
|
December 31,
|
|||||
2015
|
2014
|
||||
Loss and tax credit carryforwards
|
$
|
1,151
|
$
|
1,235
|
|
Other assets
|
69
|
69
|
|||
Asset impairments and restructuring reserves
|
153
|
170
|
|||
Postretirement medical and life benefits
|
276
|
312
|
|||
Other accrued liabilities
|
265
|
246
|
|||
Other employee benefits
|
505
|
473
|
|||
Gross deferred tax assets
|
2,419
|
2,505
|
|||
Valuation allowance
|
(238)
|
(298)
|
|||
Total deferred tax assets
|
2,181
|
2,207
|
|||
Intangible and other assets
|
(181)
|
(152)
|
|||
Fixed assets
|
(284)
|
(299)
|
|||
Total deferred tax liabilities
|
(465)
|
(451)
|
|||
Net deferred tax assets
|
$
|
1,716
|
$
|
1,756
|
December 31,
|
|||||
2015
|
2014
|
||||
Current deferred tax assets
|
$
|
248
|
|||
Non-current deferred tax assets
|
$
|
2,056
|
1,889
|
||
Current deferred tax liabilities
|
(5)
|
||||
Non-current deferred tax liabilities
|
(340)
|
(376)
|
|||
Net deferred tax assets
|
$
|
1,716
|
$
|
1,756
|
Expiration
|
||||||||||||||
Amount
|
2016-2020
|
2021-2025
|
2026-2035
|
Indefinite
|
||||||||||
Net operating losses
|
$
|
406
|
$
|
127
|
$
|
63
|
$
|
3
|
$
|
213
|
||||
Tax credits
|
745
|
414
|
58
|
237
|
36
|
|||||||||
Totals as of December 31, 2015
|
$
|
1,151
|
$
|
541
|
$
|
121
|
$
|
240
|
$
|
249
|
2015
|
2014
|
||||
Balance at January 1
|
$
|
10
|
$
|
15
|
|
Additions based on tax positions related to the current year
|
|||||
Additions for tax positions of prior years
|
245
|
5
|
|||
Reductions for tax positions of prior years
|
(1)
|
||||
Settlements and lapse of statute of limitations
|
(1)
|
(10)
|
|||
Balance at December 31
|
$
|
253
|
$
|
10
|
Ownership
interest
(1)
|
December 31,
|
||||||||
2015
|
2014
|
||||||||
Affiliated companies accounted for by the equity method
|
|||||||||
Dow Corning
|
50%
|
$
|
1,483
|
$
|
1,325
|
||||
All other
|
20%
|
to
|
50%
|
422
|
452
|
||||
1,905
|
1,777
|
||||||||
Other investments
|
70
|
24
|
|||||||
Total
|
$
|
1,975
|
$
|
1,801
|
(1)
|
Amounts reflect Corning’s direct ownership interests in the respective affiliated companies at December 31, 2015. Corning does not control any of such entities.
|
Years ended December 31,
|
||||||||
2015
|
2014
|
2013
|
||||||
Statement of operations
(1)(2)
:
|
||||||||
Net sales
|
$
|
6,461
|
$
|
7,124
|
$
|
8,526
|
||
Gross profit
|
$
|
1,606
|
$
|
1,701
|
$
|
2,655
|
||
Net income
|
$
|
586
|
$
|
647
|
$
|
1,135
|
||
Corning’s equity in earnings of affiliated companies
|
$
|
299
|
$
|
266
|
$
|
547
|
||
Related party transactions:
|
||||||||
Corning sales to affiliated companies
|
$
|
30
|
$
|
13
|
$
|
13
|
||
Corning purchases from affiliated companies
|
$
|
19
|
$
|
25
|
$
|
189
|
||
Corning transfers of assets, at cost, to affiliated companies
(3)
|
$
|
37
|
||||||
Dividends received from affiliated companies
|
$
|
143
|
$
|
130
|
$
|
629
|
||
Royalty income from affiliated companies
|
$
|
2
|
$
|
57
|
||||
Corning services to affiliates
|
$
|
2
|
December 31,
|
||||||||
2015
|
2014
|
|||||||
Balance sheet:
|
||||||||
Current assets
|
$
|
5,228
|
$
|
5,432
|
||||
Noncurrent assets
|
$
|
6,453
|
$
|
6,864
|
||||
Short-term borrowings, including current portion of long-term debt
|
$
|
6
|
$
|
7
|
||||
Other current liabilities
|
$
|
1,461
|
$
|
1,630
|
||||
Long-term debt
|
$
|
800
|
$
|
950
|
||||
Other long-term liabilities
|
$
|
4,557
|
$
|
5,143
|
||||
Non-controlling interest
|
$
|
631
|
$
|
634
|
||||
Related party transactions:
|
||||||||
Balances due from affiliated companies
|
$
|
11
|
$
|
19
|
||||
Balances due to affiliated companies
|
$
|
1
|
$
|
2
|
||||
(1)
|
2013 amounts include Samsung Corning Precision Materials.
|
(2)
|
As a result of the series of strategic and financial agreements with Samsung Display entered into on October 22, 2013, certain non-operating assets of Samsung Corning Precision Materials were held for sale as of December 31, 2013 and are reported as discontinued operations in Samsung Corning Precision Materials financial statements, which are attached in Item 15, Exhibits and Financial Schedules. Previous period amounts have been conformed for comparative purposes.
|
(3)
|
In 2013, Corning purchased machinery and equipment on behalf of Samsung Corning Precision Materials to support its capital expansion initiative.
|
Years ended December 31,
|
||||||||
2015
|
2014
|
2013
|
||||||
Statement of operations:
|
||||||||
Net sales
|
$
|
5,649
|
$
|
6,221
|
$
|
5,711
|
||
Gross profit
(1)
|
$
|
1,472
|
$
|
1,543
|
$
|
1,280
|
||
Net income attributable to Dow Corning
|
$
|
563
|
$
|
513
|
$
|
376
|
||
Corning’s equity in earnings of Dow Corning
|
$
|
281
|
$
|
252
|
$
|
196
|
||
Related party transactions:
|
||||||||
Corning purchases from Dow Corning
|
$
|
15
|
$
|
15
|
$
|
22
|
||
Dividends received from Dow Corning
|
$
|
143
|
$
|
125
|
$
|
100
|
December 31,
|
||||||||
2015
|
2014
|
|||||||
Balance sheet:
|
||||||||
Current assets
|
$
|
4,511
|
$
|
4,712
|
||||
Noncurrent assets
|
$
|
6,064
|
$
|
6,433
|
||||
Short-term borrowings, including current portion of long-term debt
|
$
|
6
|
$
|
7
|
||||
Other current liabilities
|
$
|
1,305
|
$
|
1,441
|
||||
Long-term debt
|
$
|
785
|
$
|
945
|
||||
Other long-term liabilities
|
$
|
4,539
|
$
|
5,125
|
||||
Non-controlling interest
|
$
|
631
|
$
|
634
|
||||
(1)
|
Gross profit for the year ended December 31, 2015 includes R&D cost of $233 million (2014: $273 million and 2013: $248 million).
|
7.
|
Investments (continued)
|
7.
|
Investments (continued)
|
Cash and cash equivalents
|
$
|
2
|
Trade receivables
|
63
|
|
Inventory
|
47
|
|
Property, plant and equipment
|
117
|
|
Other intangible assets
|
286
|
|
Other current and non-current assets
|
27
|
|
Current and non-current liabilities
|
(117)
|
|
Total identified net assets
|
425
|
|
Purchase consideration
|
(725)
|
|
Goodwill
(1)
|
$
|
300
|
(1)
|
The goodwill recognized is partially deductible for U.S. income tax purposes. The goodwill was allocated to the Optical Communications and All Other reporting segment in the amount of $213 million and $87 million, respectively.
|
Net consideration applied to acquired assets
|
Samsung
Display
|
Corning
Incorporated
|
Samsung
Corning
Precision
Materials
|
|||||
Ownership percentage
|
42.5%
|
57.5%
|
100%
|
|||||
Fair value based on $1.9 billion consideration transferred
|
$
|
1,911
|
$
|
2,588
|
$
|
4,499
|
||
Less contingent consideration - receivable
|
(196)
|
(265)
|
(461)
|
|||||
Net fair value of consideration @ 100%
|
1,715
|
2,323
|
4,038
|
|||||
Corning’s loss on royalty contract
|
(136)
|
(184)
|
(320)
|
|||||
Fair value post-acquisition
|
$
|
1,579
|
$
|
2,139
|
$
|
3,718
|
||
Corning’s fair value 57.5% post-acquisition
|
2,139
|
|||||||
Total fair value at January 15, 2014
|
$
|
3,718
|
·
|
At acquisition, since the contract with Samsung Corning Precision Materials was effectively settled, Corning recognized a loss of $320 million. Of the $320 million, $184 million effectively offset the portion of the gain on previously held equity investment attributable to Corning’s interest in the royalty contract. As a result, the pre-acquisition fair value of Corning’s 57.5% share of $2.3 billion decreased to the fair value of $2.1 billion post-acquisition; and
|
·
|
At acquisition, since the seller, Samsung Display, was a 42.5% shareholder of Samsung Corning Precision Materials, 42.5%, or $136 million, of the $320 million loss to effectively settle the contract reduced the consideration transferred to acquire Samsung Display’s interest in Samsung Corning Precision Materials. Accordingly, $136 million of the consideration transferred was treated separately from the purchase price, resulting in the implied consideration transferred of approximately $1.6 billion.
|
December 2013 Investment Balance
|
$
|
3,709
|
Dividend
(1)
|
(1,574)
|
|
Other
|
(18)
|
|
Net investment book balance at 1/15/2014
|
$
|
2,117
|
Fair value Samsung Corning Precision Materials
|
$
|
4,038
|
57.5% of Samsung Corning Precision Materials
(2)
|
2,323
|
|
Working capital adjustment and other
|
52
|
|
57.5% of the pre-acquisition fair value of assets
|
$
|
2,375
|
Gain on previously held equity investment
(2)
|
$
|
258
|
Translation gain
|
136
|
|
Net gain
|
$
|
394
|
(1)
|
In conjunction with the Framework Agreement, the parties agreed to have Samsung Corning Precision Materials distribute all cash and cash equivalents as a dividend to the shareholders of record as of December 31, 2013. The dividend was not part of the purchase price as the agreement was to distribute cash and cash equivalents as a dividend to the shareholders as soon as practicable. As such, at acquisition Corning did not have legal title to the cash to be distributed, although the dividend was distributed subsequent to the acquisition date. Therefore, the portion of Corning’s share of the $1.6 billion dividend received was accounted for in Corning’s consolidated financial statements as if the dividend occurred at or immediately prior to the date of acquisition at which time Samsung Corning Precision Materials was still an equity method investment in Corning’s consolidated financial statements.
|
(2)
|
As Corning was a 57.5% shareholder at the date of acquisition, immediately preceding the acquisition of Samsung Corning Precision Materials, Corning recognized an asset and respective gain as part of the calculation of its previously held equity investment which included approximately $184 million attributed to its economic interest in the royalty contract.
|
Cash and cash equivalents
(1)
|
$
|
133
|
Trade receivables
(3)
|
357
|
|
Inventory
(3)
|
105
|
|
Property, plant and equipment
(3)
|
3,595
|
|
Other current and non-current assets
(3)
|
71
|
|
Debt – current
|
(32)
|
|
Accounts payable and accrued expenses
(3)
|
(357)
|
|
Other current and non-current liabilities
(3)
|
(294)
|
|
Total identified net assets
(3)
|
3,578
|
|
Non-controlling interests
|
15
|
|
Fair value of Samsung Corning Precision Materials on acquisition date
|
(3,718)
|
|
Goodwill
(2)(3)
|
$
|
125
|
(1)
|
Cash and cash equivalents are presented net of the 2014 dividend distributed subsequent to the acquisition of Samsung Corning Precision Materials, in the amount of $2.8 billion.
|
(2)
|
The goodwill recognized is not deductible for U.S. income tax purposes. The goodwill was allocated to the Display Technologies segment.
|
(3)
|
During 2014, the Company recorded total measurement period adjustments of $60 million for the acquisition of Corning Precision Materials primarily related to accrual of contingent liabilities and employee benefit obligations.
|
Twelve months
ended
December 31,
2013
|
||
Net sales
|
$
|
9,871
|
Net income attributable to Corning Incorporated – basic earnings per share
|
$
|
2,327
|
Net income attributable to Corning Incorporated – diluted earnings per share
|
$
|
2,425
|
Earnings per common share attributable to common shareholders
|
||
Basic
|
$
|
1.60
|
Diluted
|
$
|
1.54
|
Shares used in computing per share amounts
|
||
Basic
|
1,452
|
|
Diluted
|
1,577
|
December 31,
|
|||||
2015
|
2014
|
||||
Land
|
$
|
438
|
$
|
458
|
|
Buildings
|
5,504
|
5,470
|
|||
Equipment
|
14,688
|
13,848
|
|||
Construction in progress
|
1,206
|
1,322
|
|||
21,836
|
21,098
|
||||
Accumulated depreciation
|
(9,188)
|
(8,332)
|
|||
Total
|
$
|
12,648
|
$
|
12,766
|
Optical
Communications
|
Display
Technologies
|
Specialty
Materials
|
Life
Sciences
|
All
Other
|
Total
|
||||||||||||
Balance at December 31, 2013
|
$
|
240
|
$
|
9
|
$
|
150
|
$
|
603
|
$
|
1,002
|
|||||||
Acquired goodwill
(1)
|
68
|
54
|
122
|
||||||||||||||
Measurement period adjustment
(2)
|
60
|
60
|
|||||||||||||||
Foreign currency translation adjustment
|
(2)
|
(3)
|
(6)
|
(23)
|
(34)
|
||||||||||||
Balance at December 31, 2014
|
$
|
238
|
$
|
134
|
$
|
198
|
$
|
580
|
$
|
1,150
|
|||||||
Acquired goodwill
(3)
|
220
|
$
|
87
|
307
|
|||||||||||||
Measurement period adjustment
|
(7)
|
(7)
|
|||||||||||||||
Foreign currency translation adjustment
|
(12)
|
(6)
|
(4)
|
(18)
|
(1)
|
(41)
|
|||||||||||
Other
(4)
|
(44)
|
15
|
(29)
|
||||||||||||||
Balance at December 31, 2015
|
$
|
439
|
$
|
128
|
$
|
150
|
$
|
562
|
$
|
101
|
$
|
1,380
|
(1)
|
The Company recorded the acquisition of Samsung Corning Precision Materials and a small acquisition in the Specialty Materials segment in the first quarter of 2014. Refer to Note 8 (Acquisitions) to the Consolidated Financial Statements for additional information on the acquisition of Samsung Corning Precision Materials.
|
(2)
|
In the year ended December 31, 2014, the Company recorded measurement period adjustments of $60 million for the acquisition of Samsung Corning Precision Materials primarily related to the accrual of contingent liabilities and employee benefit obligations.
|
(3)
|
The Company completed four acquisitions in the Optical Communications segment during the first quarter of 2015 and one acquisition that is being reported in All Other in the fourth quarter of 2015. Refer to Note 8 (Acquisitions) to the Consolidated Financial Statements for additional information on these acquisitions.
|
(4)
|
In the fourth quarter of 2015, Corning made a change to the internal reporting structure related to a small acquisition in 2014 originally recorded in the Specialty Materials segment, which is now being reported in All Other. Additionally, a charge of $29 million for the impairment of goodwill related to this acquisition was recorded in the fourth quarter.
|
December 31,
|
|||||||||||||||||
2015
|
2014
|
||||||||||||||||
Gross
|
Accumulated
amortization
|
Net
|
Gross
|
Accumulated
amortization
|
Net
|
||||||||||||
Amortized intangible assets:
|
|||||||||||||||||
Patents, trademarks & trade names
|
$
|
350
|
$
|
162
|
$
|
188
|
$
|
302
|
$
|
149
|
$
|
153
|
|||||
Customer list and other
|
621
|
103
|
518
|
411
|
67
|
344
|
|||||||||||
Total
|
$
|
971
|
$
|
265
|
$
|
706
|
$
|
713
|
$
|
216
|
$
|
497
|
December 31,
|
|||||
2015
|
2014
|
||||
Current assets:
|
|||||
Derivative instruments
|
$
|
522
|
$
|
687
|
|
Other current assets
|
390
|
412
|
|||
Other current assets
|
$
|
912
|
$
|
1,099
|
|
Non-current assets:
|
|||||
Derivative instruments
|
$
|
473
|
$
|
847
|
|
Contingent consideration asset
|
246
|
445
|
|||
Other non-current assets
|
794
|
430
|
|||
Other assets
|
$
|
1,513
|
$
|
1,722
|
December 31,
|
|||||
2015
|
2014
|
||||
Current liabilities:
|
|||||
Wages and employee benefits
|
$
|
491
|
$
|
562
|
|
Income taxes
|
53
|
106
|
|||
Asbestos litigation
|
238
|
||||
Other current liabilities
|
526
|
623
|
|||
Other accrued liabilities
|
$
|
1,308
|
$
|
1,291
|
|
Non-current liabilities:
|
|||||
Asbestos litigation
|
$
|
440
|
$
|
681
|
|
Other non-current liabilities
|
1,802
|
1,365
|
|||
Other liabilities
|
$
|
2,242
|
$
|
2,046
|
12.
|
December 31,
|
|||||
2015
|
2014
|
||||
Current portion of long-term debt and short-term borrowings
|
|||||
Current portion of long-term debt
|
$
|
91
|
$
|
36
|
|
Commercial paper
|
481
|
||||
Total current portion of long-term debt and short-term borrowings
|
$
|
572
|
$
|
36
|
|
Long-term debt
|
|||||
Debentures, 8.875%, due 2016
|
$
|
64
|
$
|
66
|
|
Debentures, 1.45%, due 2017
|
250
|
250
|
|||
Debentures, 1.5%, due 2018
|
375
|
||||
Debentures, 6.625%, due 2019
|
246
|
243
|
|||
Debentures, 4.25%, due 2020
|
291
|
287
|
|||
Debentures, 8.875%, due 2021
|
68
|
69
|
|||
Debentures, 2.9%, due 2022
|
374
|
||||
Debentures, 3.70%, due 2023
|
249
|
249
|
|||
Medium-term notes, average rate 7.66%, due through 2023
|
45
|
45
|
|||
Debentures, 7.00%, due 2024
|
99
|
99
|
|||
Debentures, 6.85%, due 2029
|
169
|
170
|
|||
Debentures, callable, 7.25%, due 2036
|
249
|
249
|
|||
Debentures, 4.70%, due 2037
|
250
|
250
|
|||
Debentures, 5.75%, due 2040
|
398
|
398
|
|||
Debentures, 4.75%, due 2042
|
499
|
499
|
|||
Other, average rate 5.02%, due through 2042
|
375
|
389
|
|||
Total long-term debt
|
4,001
|
3,263
|
|||
Less current portion of long-term debt
|
91
|
36
|
|||
Long-term debt
|
$
|
3,910
|
$
|
3,227
|
2016
|
2017
|
2018
|
2019
|
2020
|
Thereafter
|
||||||
$572
|
$257
|
$378
|
$253
|
$304
|
$2,713
|
*
|
Excludes interest rate swap gains and bond discounts.
|
·
|
In the second quarter of 2015, we issued $375 million of 1.50% senior unsecured notes that mature on May 8, 2018 and $375 million of 2.90% senior unsecured notes that mature on May 15, 2022. The net proceeds of $745 million will be used for general corporate purposes. We can redeem these notes at any time, subject to certain customary terms and conditions.
|
12.
|
Debt (continued)
|
·
|
In the third quarter of 2014, we amended and restated our existing revolving credit facility. The amended facility provides a $2 billion unsecured multi-currency line of credit and expires on September 30, 2019. At December 31, 2015, there were no outstanding amounts on this credit facility. The facility includes affirmative and negative covenants that Corning must comply with, including a leverage (debt to capital ratio) financial covenant. As of December 31, 2015, we were in compliance with all of the covenants.
|
·
|
In the first quarter of 2013, we amended and restated our then-existing revolving credit facility. The 2013 amended facility provided a $1 billion unsecured multi-currency line of credit that would have expired in March 2018. This facility was amended and restated by the $2 billion facility entered into in the third quarter of 2014.
|
·
|
In the first quarter of 2013, Corning repaid the aggregate principal amount and accrued interest outstanding on the credit facility entered into in the second quarter of 2011 that allowed Corning to borrow up to Chinese renminbi (RMB) 4 billion. The total amount repaid was approximately $500 million. Upon repayment, this facility was terminated.
|
·
|
In the second quarter of 2013, the Company established a commercial paper program on a private placement basis, pursuant to which we may issue short-term, unsecured commercial paper notes up to a maximum aggregate principal amount outstanding at any time of $1 billion. Under this program, the Company may issue the notes from time to time and will use the proceeds for general corporate purposes. The maturities of the notes will vary, but may not exceed 390 days from the date of issue. The interest rates will vary based on market conditions and the ratings assigned to the notes by credit rating agencies at the time of issuance. The Company’s revolving credit facility is available to support obligations under the commercial paper program, if needed.
|
·
|
In the fourth quarter of 2013, we issued $250 million of 3.70% senior unsecured notes that mature on November 15, 2023. The net proceeds of approximately $248 million were used for general corporate purposes.
|
·
|
In the fourth quarter of 2013, we recorded a financing obligation in the approximate amount of $230 million for a new LCD glass substrate facility in China.
|
Total
pension benefits
|
Domestic
pension benefits
|
International
pension benefits
|
|||||||||||||||
December 31,
|
2015
|
2014
|
2015
|
2014
|
2015
|
2014
|
|||||||||||
Change in benefit obligation
|
|||||||||||||||||
Benefit obligation at beginning of year
|
$
|
3,809
|
$
|
3,300
|
$
|
3,222
|
$
|
2,844
|
$
|
587
|
$
|
456
|
|||||
Service cost
|
90
|
82
|
64
|
55
|
26
|
27
|
|||||||||||
Interest cost
|
144
|
160
|
126
|
137
|
18
|
23
|
|||||||||||
Plan participants’ contributions
|
1
|
1
|
1
|
1
|
|||||||||||||
Acquisitions
|
103
|
103
|
|||||||||||||||
Amendments
|
25
|
25
|
|||||||||||||||
Actuarial (gain) loss
|
(95)
|
394
|
(87)
|
327
|
(8)
|
67
|
|||||||||||
Other
|
(8)
|
(3)
|
(8)
|
(3)
|
|||||||||||||
Benefits paid
|
(188)
|
(207)
|
(165)
|
(167)
|
(23)
|
(40)
|
|||||||||||
Foreign currency translation
|
(38)
|
(46)
|
(38)
|
(46)
|
|||||||||||||
Benefit obligation at end of year
|
$
|
3,715
|
$
|
3,809
|
$
|
3,161
|
$
|
3,222
|
$
|
554
|
$
|
587
|
|||||
Change in plan assets
|
|||||||||||||||||
Fair value of plan assets at beginning of year
|
$
|
3,263
|
$
|
2,896
|
$
|
2,814
|
$
|
2,596
|
$
|
449
|
$
|
300
|
|||||
Actual (loss) gain on plan assets
|
(108)
|
355
|
(111)
|
287
|
3
|
68
|
|||||||||||
Employer contributions
|
116
|
147
|
77
|
97
|
39
|
50
|
|||||||||||
Plan participants’ contributions
|
1
|
1
|
1
|
1
|
|||||||||||||
Acquisitions
|
97
|
97
|
|||||||||||||||
Benefits paid
|
(188)
|
(207)
|
(165)
|
(167)
|
(23)
|
(40)
|
|||||||||||
Foreign currency translation
|
(26)
|
(26)
|
(26)
|
(26)
|
|||||||||||||
Fair value of plan assets at end of year
|
$
|
3,058
|
$
|
3,263
|
$
|
2,616
|
$
|
2,814
|
$
|
442
|
$
|
449
|
|||||
Funded status at end of year
|
|||||||||||||||||
Fair value of plan assets
|
$
|
3,058
|
$
|
3,263
|
$
|
2,616
|
$
|
2,814
|
$
|
442
|
$
|
449
|
|||||
Benefit obligations
|
(3,715)
|
(3,809)
|
(3,161)
|
(3,222)
|
(554)
|
(587)
|
|||||||||||
Funded status of plans
|
$
|
(657)
|
$
|
(546)
|
$
|
(545)
|
$
|
(408)
|
$
|
(112)
|
$
|
(138)
|
|||||
Amounts recognized in the consolidated balance sheets consist of:
|
|||||||||||||||||
Noncurrent asset
|
$
|
50
|
$
|
47
|
$
|
50
|
$
|
47
|
|||||||||
Current liability
|
(35)
|
(41)
|
$
|
(30)
|
$
|
(30)
|
(5)
|
(11)
|
|||||||||
Noncurrent liability
|
(672)
|
(552)
|
(515)
|
(378)
|
(157)
|
(174)
|
|||||||||||
Recognized liability
|
$
|
(657)
|
$
|
(546)
|
$
|
(545)
|
$
|
(408)
|
$
|
(112)
|
$
|
(138)
|
|||||
Amounts recognized in accumulated other comprehensive income consist of:
|
|||||||||||||||||
Net actuarial loss
|
$
|
332
|
$
|
308
|
$
|
305
|
$
|
278
|
$
|
27
|
$
|
30
|
|||||
Prior service cost (credit)
|
35
|
41
|
37
|
44
|
(2)
|
(3)
|
|||||||||||
Amount recognized at end of year
|
$
|
367
|
$
|
349
|
$
|
342
|
$
|
322
|
$
|
25
|
$
|
27
|
Postretirement benefits
|
|||||
December 31,
|
2015
|
2014
|
|||
Change in benefit obligation
|
|||||
Benefit obligation at beginning of year
|
$
|
862
|
$
|
815
|
|
Service cost
|
13
|
11
|
|||
Interest cost
|
33
|
38
|
|||
Plan participants’ contributions
|
7
|
7
|
|||
Amendments
|
(5)
|
||||
Actuarial (gain) loss
|
(97)
|
49
|
|||
Other
|
4
|
||||
Benefits paid
|
(61)
|
(56)
|
|||
Medicare subsidy received
|
2
|
3
|
|||
Foreign currency translation
|
|||||
Benefit obligation at end of year
|
$
|
763
|
$
|
862
|
|
Funded status at end of year
|
|||||
Fair value of plan assets
|
$
|
0
|
$
|
0
|
|
Benefit obligations
|
(763)
|
(862)
|
|||
Funded status of plans
|
$
|
(763)
|
$
|
(862)
|
|
Amounts recognized in the consolidated balance sheets consist of:
|
|||||
Current liability
|
$
|
(45)
|
$
|
(48)
|
|
Noncurrent liability
|
(718)
|
(814)
|
|||
Recognized liability
|
$
|
(763)
|
$
|
(862)
|
|
Amounts recognized in accumulated other comprehensive income consist of:
|
|||||
Net actuarial loss
|
$
|
33
|
$
|
132
|
|
Prior service credit
|
(19)
|
(27)
|
|||
Amount recognized at end of year
|
$
|
14
|
$
|
105
|
December 31,
|
|||||
2015
|
2014
|
||||
Projected benefit obligation
|
$
|
3,341
|
$
|
3,425
|
|
Fair value of plan assets
|
$
|
2,635
|
$
|
2,831
|
December 31,
|
|||||
2015
|
2014
|
||||
Accumulated benefit obligation
|
$
|
3,159
|
$
|
479
|
|
Fair value of plan assets
|
$
|
2,634
|
$
|
17
|
Total pension benefits
|
Domestic pension benefits
|
International pension benefits
|
|||||||||||||||
December 31,
|
2015
|
2014
|
2013
|
2015
|
2014
|
2013
|
2015
|
2014
|
2013
|
||||||||
Service cost
|
$ 90
|
$ 82
|
$ 70
|
$ 64
|
$ 55
|
$ 60
|
$26
|
$ 27
|
$10
|
||||||||
Interest cost
|
144
|
160
|
131
|
126
|
137
|
115
|
18
|
23
|
16
|
||||||||
Expected return on plan assets
|
(178)
|
(174)
|
(169)
|
(166)
|
(159)
|
(158)
|
(12)
|
(15)
|
(11)
|
||||||||
Amortization of prior service cost (credit)
|
6
|
6
|
5
|
7
|
7
|
6
|
(1)
|
(1)
|
(1)
|
||||||||
Recognition of actuarial loss (gain)
|
165
|
29
|
(30)
|
162
|
4
|
(41)
|
3
|
25
|
11
|
||||||||
Total net periodic benefit expense
|
$227
|
$103
|
$ 7
|
$193
|
$ 44
|
$ (18)
|
$34
|
$ 59
|
$25
|
||||||||
Other changes in plan assets and benefit obligations recognized in other comprehensive income:
|
|||||||||||||||||
Curtailment effects
|
$ (3)
|
$ (3)
|
|||||||||||||||
Settlements
|
$ (1)
|
(2)
|
$(1)
|
(2)
|
|||||||||||||
Current year actuarial loss (gain)
|
191
|
212
|
$(264)
|
$189
|
$198
|
$(274)
|
2
|
14
|
$10
|
||||||||
Recognition of actuarial (loss) gain
|
(165)
|
(29)
|
30
|
(162)
|
(4)
|
41
|
(3)
|
(25)
|
(11)
|
||||||||
Current year prior service cost
|
25
|
25
|
|||||||||||||||
Amortization of prior service (cost) credit
|
(6)
|
(6)
|
(5)
|
(7)
|
(7)
|
(6)
|
1
|
1
|
1
|
||||||||
Total recognized in other comprehensive (income) loss
|
$ 19
|
$197
|
$(239)
|
$ 20
|
$212
|
$(239)
|
$(1)
|
$(15)
|
$ 0
|
||||||||
Total recognized in net periodic benefit cost and other comprehensive (income) loss
|
$246
|
$300
|
$(232)
|
$213
|
$256
|
$(257)
|
$33
|
$ 44
|
$25
|
Postretirement benefits
|
||||||||
2015
|
2014
|
2013
|
||||||
Service cost
|
$
|
13
|
$
|
11
|
$
|
13
|
||
Interest cost
|
33
|
38
|
39
|
|||||
Amortization of net loss
|
3
|
15
|
||||||
Amortization of prior service credit
|
(7)
|
(6)
|
(6)
|
|||||
Total net periodic benefit expense
|
$
|
42
|
$
|
43
|
$
|
61
|
||
Other changes in plan assets and benefit obligations recognized in other comprehensive income:
|
||||||||
Current year actuarial (gain) loss
|
$
|
(96)
|
$
|
49
|
$
|
(178)
|
||
Amortization of actuarial loss
|
(3)
|
(15)
|
||||||
Current year prior service credit
|
(5)
|
(5)
|
||||||
Amortization of prior service credit
|
7
|
6
|
6
|
|||||
Total recognized in other comprehensive (income) loss
|
$
|
(92)
|
$
|
50
|
$
|
(192)
|
||
Total recognized in net periodic benefit cost and other comprehensive (income) loss
|
$
|
(50)
|
$
|
93
|
$
|
(131)
|
Pension benefits
|
|||||||||||||||||
Domestic
|
International
|
Postretirement benefits
|
|||||||||||||||
2015
|
2014
|
2013
|
2015
|
2014
|
2013
|
2015
|
2014
|
2013
|
|||||||||
Discount rate
|
4.24%
|
4.00%
|
4.75%
|
3.23%
|
3.21%
|
4.08%
|
4.31%
|
4.00%
|
4.75%
|
||||||||
Rate of compensation increase
|
3.50%
|
3.50%
|
4.00%
|
3.92%
|
3.88%
|
3.85%
|
Pension benefits
|
|||||||||||||||||
Domestic
|
International
|
Postretirement benefits
|
|||||||||||||||
2015
|
2014
|
2013
|
2015
|
2014
|
2013
|
2015
|
2014
|
2013
|
|||||||||
Discount rate
|
4.00%
|
4.75%
|
3.75%
|
3.21%
|
4.08%
|
4.48%
|
4.00%
|
4.75%
|
4.00%
|
||||||||
Expected return on plan assets
|
6.00%
|
6.25%
|
6.00%
|
2.97%
|
4.12%
|
3.73%
|
|||||||||||
Rate of compensation increase
|
3.50%
|
4.00%
|
4.00%
|
3.88%
|
3.85%
|
3.45%
|
Assumed health care trend rates at December 31
|
2015
|
2014
|
|
Health care cost trend rate assumed for next year
|
7%
|
6.67%
|
|
Rate that the cost trend rate gradually declines to
|
5%
|
5%
|
|
Year that the rate reaches the ultimate trend rate
|
2024
|
2020
|
One-percentage-point
increase
|
One-percentage-point
decrease
|
||
Effect on annual total of service and interest cost
|
$ 4
|
$ (3)
|
|
Effect on postretirement benefit obligation
|
$52
|
$(43)
|
Fair value measurements at reporting date using
|
|||||||||||
(in millions)
|
December 31,
2015
|
Quoted prices in
active markets
for identical
assets (Level 1)
|
Significant
other
observable
inputs (Level 2)
|
Significant
unobservable
inputs
(Level 3)
|
|||||||
Equity securities:
|
|||||||||||
U.S. companies
|
$
|
336
|
$
|
51
|
$
|
285
|
|||||
International companies
|
322
|
79
|
243
|
||||||||
Fixed income:
|
|||||||||||
U.S. corporate bonds
|
1,566
|
158
|
1,408
|
||||||||
Private equity
(1)
|
163
|
$
|
163
|
||||||||
Real estate
(2)
|
61
|
61
|
|||||||||
Cash equivalents
|
71
|
71
|
|||||||||
Commodities
(3)
|
97
|
97
|
|||||||||
Total
|
$
|
2,616
|
$
|
359
|
$
|
2,033
|
$
|
224
|
(1)
|
This category includes venture capital, leverage buyouts and distressed debt limited partnerships invested primarily in U.S. companies. The inputs are valued by discounted cash flow analysis and comparable sale analysis.
|
(2)
|
This category includes industrial, office, apartments, hotels, infrastructure and retail investments which are limited partnerships predominately in the U.S. The inputs are valued by discounted cash flow analysis; comparable sale analysis and periodic external appraisals.
|
(3)
|
This category includes investments in energy, industrial metals, precious metals, agricultural and livestock primarily through futures, options, swaps and exchange traded funds.
|
Fair value measurements at reporting date using
|
|||||||||||
(in millions)
|
December 31,
2014
|
Quoted prices in
active markets
for identical
assets (Level 1)
|
Significant
other
observable
inputs (Level 2)
|
Significant
unobservable
inputs
(Level 3)
|
|||||||
Equity securities:
|
|||||||||||
U.S. companies
|
$
|
310
|
$
|
49
|
$
|
261
|
|||||
International companies
|
327
|
78
|
249
|
||||||||
Fixed income:
|
|||||||||||
U.S. corporate bonds
|
1,720
|
166
|
1,554
|
||||||||
Private equity
(1)
|
192
|
$
|
192
|
||||||||
Real estate
(2)
|
84
|
84
|
|||||||||
Cash equivalents
|
80
|
80
|
|||||||||
Commodities
(3)
|
101
|
101
|
|||||||||
Total
|
$
|
2,814
|
$
|
373
|
$
|
2,165
|
$
|
276
|
(1)
|
This category includes venture capital, leverage buyouts and distressed debt limited partnerships invested primarily in U.S. companies. The inputs are valued by discounted cash flow analysis and comparable sale analysis.
|
(2)
|
This category includes industrial, office, apartments, hotels, infrastructure and retail investments which are limited partnerships predominately in the U.S. The inputs are valued by discounted cash flow analysis; comparable sale analysis and periodic external appraisals.
|
(3)
|
This category includes investments in energy, industrial metals, precious metals, agricultural and livestock primarily through futures, options, swaps and exchange traded funds.
|
Fair value measurements at reporting date using
|
|||||||||||
(in millions)
|
December 31,
2015
|
Quoted prices in
active markets
for identical
assets (Level 1)
|
Significant
other
observable
inputs (Level 2)
|
Significant
unobservable
inputs
(Level 3)
|
|||||||
Equity securities:
|
|||||||||||
U.S. companies
|
$
|
7
|
$
|
7
|
|||||||
International companies
|
23
|
23
|
|||||||||
Fixed income:
|
|||||||||||
International fixed income
|
347
|
$
|
286
|
61
|
|||||||
Insurance contracts
|
3
|
$
|
3
|
||||||||
Mortgages
|
2
|
2
|
|||||||||
Cash equivalents
|
60
|
60
|
|||||||||
Total
|
$
|
442
|
$
|
346
|
$
|
91
|
$
|
5
|
Fair value measurements at reporting date using
|
|||||||||||
(in millions)
|
December 31,
2014
|
Quoted prices in
active markets
for identical
assets (Level 1)
|
Significant
other
observable
inputs (Level 2)
|
Significant
unobservable
inputs
(Level 3)
|
|||||||
Equity securities:
|
|||||||||||
U.S. companies
|
$
|
6
|
$
|
6
|
|||||||
International companies
|
22
|
22
|
|||||||||
Fixed income:
|
|||||||||||
International fixed income
|
361
|
$
|
293
|
68
|
|||||||
Insurance contracts
|
5
|
$
|
5
|
||||||||
Mortgages
|
7
|
7
|
|||||||||
Cash equivalents
|
48
|
48
|
|||||||||
Total
|
$
|
449
|
$
|
341
|
$
|
96
|
$
|
12
|
Level 3 assets – Domestic
|
Level 3 assets – International
|
||||||||||
|
Year ended December 2015
|
Year ended December 2015
|
|||||||||
(in millions)
|
Private
equity
|
Real
estate
|
Mortgages
|
Insurance
contracts
|
|||||||
Beginning balance at December 31, 2014
|
$
|
192
|
$
|
84
|
$
|
7
|
$
|
5
|
|||
Actual return on plan assets relating to assets still held at the reporting date
|
16
|
12
|
|||||||||
Transfers in and/or out of level 3
|
(45)
|
(35)
|
(5)
|
(2)
|
|||||||
Ending balance at December 31, 2015
|
$
|
163
|
$
|
61
|
$
|
2
|
$
|
3
|
Level 3 assets – Domestic
|
Level 3 assets – International
|
||||||||||
|
Year ended December 2014
|
Year ended December 2014
|
|||||||||
(in millions)
|
Private
equity
|
Real
estate
|
Mortgages
|
Insurance
contracts
|
|||||||
Beginning balance at December 31, 2013
|
$
|
207
|
$
|
93
|
$
|
0
|
$
|
6
|
|||
Actual return on plan assets relating to assets still held at the reporting date
|
31
|
8
|
1
|
||||||||
Transfers in and/or out of level 3
|
(46)
|
(17)
|
7
|
(2)
|
|||||||
Ending balance at December 31, 2014
|
$
|
192
|
$
|
84
|
$
|
7
|
$
|
5
|
Expected benefit payments
|
||||||
Domestic
pension
benefits
|
International
pension
benefits
|
Postretirement
benefits
|
Expected federal subsidy payments
postretirement benefits
|
|||
2016
|
$ 192
|
$ 18
|
$ 45
|
$ 2
|
||
2017
|
$ 178
|
$ 22
|
$ 44
|
$ 3
|
||
2018
|
$ 186
|
$ 24
|
$ 44
|
$ 3
|
||
2019
|
$ 192
|
$ 25
|
$ 44
|
$ 3
|
||
2020
|
$ 198
|
$ 29
|
$ 46
|
$ 3
|
||
2021-2025
|
$1,100
|
$168
|
$230
|
$16
|
Amount of commitment and contingency expiration per period
|
||||||||||||||
Total
|
Less than
1 year
|
1 to 3
years
|
3 to 5
years
|
5 years and
thereafter
|
||||||||||
Performance bonds and guarantees
|
$
|
92
|
$
|
25
|
$
|
6
|
$
|
1
|
$
|
60
|
||||
Stand-by letters of credit
(1)
|
47
|
44
|
3
|
|||||||||||
Credit facility to equity company
|
31
|
27
|
4
|
|||||||||||
Loan guarantees
|
14
|
14
|
||||||||||||
Subtotal of commitment expirations per period
|
$
|
184
|
$
|
96
|
$
|
6
|
$
|
1
|
$
|
81
|
||||
Purchase obligations
(6)
|
$
|
220
|
$
|
106
|
$
|
77
|
$
|
33
|
$
|
4
|
||||
Capital expenditure obligations
(2)
|
298
|
298
|
||||||||||||
Total debt
(3)
|
4,122
|
565
|
625
|
550
|
2,382
|
|||||||||
Interest on long-term debt
(4)
|
2,385
|
165
|
316
|
280
|
1,624
|
|||||||||
Capital leases and financing obligations
(3)
|
355
|
7
|
10
|
7
|
331
|
|||||||||
Imputed interest on capital leases and financing obligations
|
240
|
19
|
37
|
36
|
148
|
|||||||||
Minimum rental commitments
|
573
|
49
|
110
|
77
|
337
|
|||||||||
Uncertain tax positions
(5)
|
58
|
|||||||||||||
Subtotal of contractual obligation payments due by period
(5)
|
$
|
8,251
|
$
|
1,209
|
$
|
1,175
|
$
|
983
|
$
|
4,826
|
||||
Total commitments and contingencies
(5)
|
$
|
8,435
|
$
|
1,305
|
$
|
1,181
|
$
|
984
|
$
|
4,907
|
(1)
|
At December 31, 2015, $38 million of the $47 million was included in other accrued liabilities on our consolidated balance sheets.
|
(2)
|
Capital expenditure obligations primarily reflect amounts associated with our capital expansion activities.
|
(3)
|
Total debt above is stated at maturity value, and excludes interest rate swap gains/losses and bond discounts.
|
(4)
|
The estimate of interest payments assumes interest is paid through the date of maturity or expiration of the related debt, based upon stated rates in the respective debt instruments.
|
(5)
|
At December 31, 2015, $58 million was included on our balance sheet related to uncertain tax positions. Of this amount, we are unable to estimate when any of that amount will become payable.
|
(6)
|
Purchase obligations are enforceable and legally binding obligations which primarily consist of raw material and energy-related take-or-pay contracts.
|
2016
|
2017
|
2018
|
2019
|
2020
|
2021 and
thereafter
|
||||||
$49
|
$58
|
$52
|
$41
|
$36
|
$337
|
·
|
Financial instruments and transactions denominated in foreign currencies, which impact earnings; and
|
·
|
The translation of net assets in foreign subsidiaries for which the functional currency is not the U.S. dollar, which impacts our net equity.
|
Asset derivatives
|
Liability derivatives
|
||||||||||||||||||||
Notional amount
|
Balance sheet location
|
Fair value
|
Balance sheet location
|
Fair value
|
|||||||||||||||||
2015
|
2014
|
2015
|
2014
|
2015
|
2014
|
||||||||||||||||
Derivatives designated as hedging instruments
|
|||||||||||||||||||||
Foreign exchange contracts
|
$
|
782
|
$
|
487
|
Other current assets
|
$
|
5
|
$
|
22
|
Other accrued liabilities
|
$
|
(10)
|
$
|
(6)
|
|||||||
Other assets
|
1
|
Other liabilities
|
(23)
|
||||||||||||||||||
Interest rate contracts
|
550
|
1,300
|
Other assets
|
1
|
Other liabilities
|
(4)
|
(15)
|
||||||||||||||
Derivatives not designated as hedging instruments
|
|||||||||||||||||||||
Foreign exchange contracts, other
|
1,095
|
1,285
|
Other current assets
|
6
|
17
|
Other accrued liabilities
|
(12)
|
(5)
|
|||||||||||||
Foreign currency hedges related to translated earnings
|
11,972
|
12,126
|
Other current assets
|
511
|
649
|
Other accrued liabilities
|
(33)
|
(33)
|
|||||||||||||
Other assets
|
472
|
846
|
Other liabilities
|
(61)
|
|||||||||||||||||
Total derivatives
|
$
|
14,399
|
$
|
15,198
|
$
|
995
|
$
|
1,535
|
$
|
(143)
|
$
|
(59)
|
Effect of derivative instruments on the consolidated financial statements for the years ended December 31
|
|||||||||||||||||||
Derivatives
in hedging
relationships
|
(Loss)/gain recognized in other
comprehensive income (OCI)
|
Location of gain/(loss) reclassified from
accumulated OCI into income
effective/ineffective
|
Gain/(loss) reclassified from
accumulated OCI into income
ineffective/effective
(1)
|
||||||||||||||||
2015
|
2014
|
2013
|
2015
|
2014
|
2013
|
||||||||||||||
Cash flow hedges
|
|||||||||||||||||||
-
|
Net sales
|
$
|
20
|
$
|
3
|
||||||||||||||
Interest rate hedge
|
$
|
(7)
|
$
|
(3)
|
$
|
33
|
Cost of sales
|
6
|
7
|
$
|
38
|
||||||||
Foreign exchange contracts
|
(17)
|
20
|
56
|
Other (expense) income, net
|
91
|
||||||||||||||
Total cash flow hedges
|
$
|
(24)
|
$
|
17
|
$
|
89
|
$
|
26
|
$
|
10
|
$
|
129
|
Gain (loss) recognized in income
|
|||||||||||
Undesignated
derivatives
|
Location of gain/(loss)
recognized in income
|
2015
|
2014
|
2013
|
|||||||
Foreign exchange contracts – balance sheet
|
Foreign currency hedge gain (loss), net
|
$
|
8
|
$
|
29
|
$
|
100
|
||||
Foreign exchange contracts – loans
|
Foreign currency hedge (loss) gain, net
|
(3)
|
13
|
87
|
|||||||
Foreign currency hedges related to translated earnings
|
Foreign currency hedge gain (loss), net
|
80
|
1,369
|
435
|
|||||||
Total undesignated
|
$
|
85
|
$
|
1,411
|
$
|
622
|
(1)
|
There were no material amounts of ineffectiveness for 2015 and 2014 and the amount of hedge ineffectiveness for the year ended December 31, 2013 was $24 million related to interest rate swaps settled in the fourth quarter.
|
Fair value measurements at reporting date using
|
|||||||
(in millions)
|
December 31,
2015
|
Quoted prices in
active markets for
identical assets
(Level 1)
|
Significant other
observable
inputs
(Level 2)
|
Significant
unobservable
inputs
(Level 3)
|
|||
Current assets:
|
|||||||
Short-term investments
|
$100
|
$100
|
|||||
Other current assets
(1)
|
$522
|
$522
|
|||||
Non-current assets:
|
|||||||
Other assets
(1)(2)
|
$752
|
$506
|
$246
|
||||
Current liabilities:
|
|||||||
Other accrued liabilities
(1)
|
$ 55
|
$ 55
|
|||||
Non-current liabilities:
|
|||||||
Other liabilities
(1)(2)
|
$ 98
|
$ 88
|
$ 10
|
(1)
|
Derivative assets and liabilities include foreign exchange contracts which are measured using observable quoted prices for similar assets and liabilities.
|
(2)
|
Other assets include asset-backed securities which are measured using observable quoted prices for similar assets and contingent consideration assets or liabilities which are measured by applying an option pricing model using projected future revenues.
|
Fair value measurements at reporting date using
|
|||||||
(in millions)
|
December 31,
2014
|
Quoted prices in
active markets for
identical assets
(Level 1)
|
Significant other
observable
inputs
(Level 2)
|
Significant
unobservable
inputs
(Level 3)
|
|||
Current assets:
|
|||||||
Short-term investments
|
$ 759
|
$759
|
|||||
Other current assets
(1)
|
$ 687
|
$687
|
|||||
Non-current assets:
|
|||||||
Other assets
(1)(2)
|
$1,330
|
$885
|
$445
|
||||
Current liabilities:
|
|||||||
Other accrued liabilities
(1)
|
$ 44
|
$ 44
|
|||||
Non-current liabilities:
|
|||||||
Other liabilities
(1)
|
$ 15
|
$ 15
|
(1)
|
Derivative assets and liabilities include foreign exchange contracts which are measured using observable quoted prices for similar assets and liabilities.
|
(2)
|
Other assets include asset-backed securities which are measured using observable quoted prices for similar assets and a contingent consideration asset which was measured by applying an option pricing model using projected future Corning Precision Materials’ revenue.
|
Level 3 Roll-Forward – Other Assets
|
||||
(in millions)
|
2015
|
2014
|
||
Beginning balance
|
$445
|
$196
|
||
Unrealized gains (loss)
|
13
|
249
|
||
Transfer in (out) of level 3
|
(212)
|
|||
Ending balance
|
$246
|
$445
|
Common stock
|
Treasury stock
|
||||||||
Shares
|
Par value
|
Shares
|
Cost
|
||||||
Balance at December 31, 2012
|
1,649
|
$
|
825
|
(179)
|
$
|
(2,773)
|
|||
Shares issued to benefit plans and for option exercises
|
12
|
6
|
(1)
|
||||||
Shares purchased for treasury
|
(82)
|
(1,316)
|
|||||||
Other, net
|
(1)
|
(9)
|
|||||||
Balance at December 31, 2013
|
1,661
|
$
|
831
|
(262)
|
$
|
(4,099)
|
|||
Shares issued to benefit plans and for option exercises
|
11
|
5
|
(2)
|
||||||
Shares purchased for treasury
|
(135)
|
(2,612)
|
|||||||
Other, net
|
(1)
|
(14)
|
|||||||
Balance at December 31, 2014
(1)
|
1,672
|
$
|
836
|
(398)
|
$
|
(6,727)
|
|||
Shares issued to benefit plans and for option exercises
|
9
|
4
|
(1)
|
||||||
Shares purchased for treasury
|
(151)
|
(2,978)
|
|||||||
Other, net
|
(2)
|
(19)
|
|||||||
Balance at December 31, 2015
|
1,681
|
$
|
840
|
(551)
|
$
|
(9,725)
|
(1)
|
On January 15, 2014, in conjunction with the acquisition of Corning Precision Materials, Corning issued 2,300 Fixed Rate Cumulative Convertible Preferred Stock, Series A (“Preferred Stock”), par value $100 per share, at an issue price of $1 million per share, for an aggregate issue price of $2.3 billion. There have been no further issuances or conversions of Preferred Stock since 2014.
|
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
income (loss)
|
||||||||||
Balance at December 31, 2012
|
$
|
1,174
|
$
|
(820)
|
$
|
(16)
|
$
|
18
|
$
|
356
|
||||
Other comprehensive income before reclassifications
(4)
|
$
|
(756)
|
$
|
283
|
$
|
1
|
$
|
56
|
$
|
(416)
|
||||
Amounts reclassified from accumulated other comprehensive income
(2)
|
(10)
|
(1)
|
(81)
|
(92)
|
||||||||||
Equity method affiliates
(3)
|
74
|
119
|
2
|
1
|
196
|
|||||||||
Net current-period other comprehensive (loss) income
|
(682)
|
392
|
2
|
(24)
|
(312)
|
|||||||||
Balance at December 31, 2013
|
$
|
492
|
$
|
(428)
|
$
|
(14)
|
$
|
(6)
|
$
|
44
|
||||
Other comprehensive income before reclassifications
(5)
|
$
|
(821)
|
$
|
(172)
|
$
|
4
|
$
|
10
|
$
|
(979)
|
||||
Amounts reclassified from accumulated other comprehensive income
(2)
|
(136)
|
18
|
1
|
(6)
|
(123)
|
|||||||||
Equity method affiliates
(3)
|
(116)
|
(127)
|
(6)
|
(249)
|
||||||||||
Net current-period other comprehensive (loss) income
|
(1,073)
|
(281)
|
(1)
|
4
|
(1,351)
|
|||||||||
Balance at December 31, 2014
|
$
|
(581)
|
$
|
(709)
|
$
|
(15)
|
$
|
(2)
|
$
|
(1,307)
|
||||
Other comprehensive income before reclassifications
(6)
|
$
|
(487)
|
$
|
(59)
|
$
|
(18)
|
$
|
(564)
|
||||||
Amounts reclassified from accumulated other comprehensive income
(2)
|
105
|
$
|
1
|
(20)
|
86
|
|||||||||
Equity method affiliates
(3)
|
(103)
|
75
|
2
|
(26)
|
||||||||||
Net current-period other comprehensive (loss) income
|
(590)
|
121
|
1
|
(36)
|
(504)
|
|||||||||
Balance at December 31, 2015
|
$
|
(1,171)
|
$
|
(588)
|
$
|
(14)
|
$
|
(38)
|
$
|
(1,811)
|
(1)
|
All amounts are after tax. Amounts in parentheses indicate debits to accumulated other comprehensive income.
|
(2)
|
Tax effects of reclassifications are disclosed separately in this Note 17.
|
(3)
|
Tax effects related to equity method affiliates are not significant.
|
(4)
|
Amounts are net of total tax expense of $(197) million, including $(33) million related to the hedges component and $(164) million related to the retirement plans component.
|
(5)
|
Amounts are net of total tax benefit of $96 million, including $(7) million related to the hedges component and $104 million related to the retirement plans component and $(1) million related to the investments component.
|
(6)
|
Amounts are net of total tax benefit of $41 million, including $35 million related to the retirement plans component and $6 million related to the hedges component.
|
Reclassifications Out of Accumulated Other Comprehensive Income (AOCI) by Component
(1)
|
||||||||||
Details about AOCI Components
|
Amount reclassified from AOCI
|
Affected line item
in the consolidated
statements of income
|
||||||||
Years ended December 31,
|
||||||||||
2015
|
2014
|
2013
|
||||||||
Foreign currency translation adjustment
|
$
|
136
|
Transaction-related gain, net
|
|||||||
136
|
Net of tax
|
|||||||||
Amortization of net actuarial (loss) gain
|
$
|
(168)
|
$
|
(29)
|
$
|
15
|
(2)
|
|||
Amortization of prior service credit
|
1
|
1
|
(2)
|
|||||||
(167)
|
(29)
|
16
|
Total before tax
|
|||||||
62
|
11
|
(6)
|
Tax benefit (expense)
|
|||||||
$
|
(105)
|
$
|
(18)
|
$
|
10
|
Net of tax
|
||||
Realized (losses) gains on investments
|
$
|
(1)
|
$
|
(1)
|
$
|
1
|
Other (expense) income, net
|
|||
Tax expense
|
||||||||||
$
|
(1)
|
$
|
(1)
|
$
|
1
|
Net of tax
|
||||
Realized gains on designated hedges
|
$
|
20
|
$
|
3
|
Sales
|
|||||
6
|
7
|
$
|
38
|
Cost of sales
|
||||||
91
|
Other (expense) income, net
|
|||||||||
26
|
10
|
129
|
Total before tax
|
|||||||
(6)
|
(4)
|
(48)
|
Tax expense
|
|||||||
$
|
20
|
$
|
6
|
$
|
81
|
Net of tax
|
||||
Total reclassifications for the period
|
$
|
(86)
|
$
|
123
|
$
|
92
|
Net of tax
|
(1)
|
Amounts in parentheses indicate debits to the statement of income.
|
(2)
|
These accumulated other comprehensive income components are included in net periodic pension cost. See Note 13 (Employee Retirement Plans) to the Consolidated Financial Statements
for additional details.
|
Years ended December 31,
|
||||||||
2015
|
2014
|
2013
|
||||||
Net income attributable to Corning Incorporated
|
$
|
1,339
|
$
|
2,472
|
$
|
1,961
|
||
Less: Series A convertible preferred stock dividend
|
98
|
94
|
||||||
Net income available to common stockholders - basic
|
1,241
|
2,378
|
1,961
|
|||||
Plus: Series A convertible preferred stock dividend
|
98
|
94
|
||||||
Net income available to common stockholders - diluted
|
$
|
1,339
|
$
|
2,472
|
$
|
1,961
|
||
Weighted-average common shares outstanding - basic
|
1,219
|
1,305
|
1,452
|
|||||
Effect of dilutive securities:
|
||||||||
Stock options and other dilutive securities
|
9
|
12
|
10
|
|||||
Series A convertible preferred stock
|
115
|
110
|
||||||
Weighted-average common shares outstanding - diluted
|
1,343
|
1,427
|
1,462
|
|||||
Basic earnings per common share
|
$
|
1.02
|
$
|
1.82
|
$
|
1.35
|
||
Diluted earnings per common share
|
$
|
1.00
|
$
|
1.73
|
$
|
1.34
|
||
Anti-dilutive potential shares excluded from diluted earnings per common share:
|
||||||||
Employee stock options and awards
|
22
|
24
|
39
|
|||||
Accelerated share repurchase forward contract
|
15
|
3
|
3
|
|||||
Total
|
37
|
27
|
42
|
Number of
shares
(in thousands)
|
Weighted-
average
exercise price
|
Weighted-
average
remaining
contractual
term in years
|
Aggregate
intrinsic
value
(in thousands)
|
||||
Options outstanding as of December 31, 2014
|
48,724
|
$18.94
|
|||||
Granted
|
1,578
|
21.48
|
|||||
Exercised
|
(6,340)
|
16.13
|
|||||
Forfeited and expired
|
(1,224)
|
20.78
|
|||||
Options outstanding as of December 31, 2015
|
42,738
|
19.40
|
3.93
|
$83,023
|
|||
Options expected to vest as of December 31, 2015
|
42,696
|
19.40
|
3.93
|
82,992
|
|||
Options exercisable as of December 31, 2015
|
35,245
|
19.86
|
3.08
|
65,817
|
2015
|
2014
|
2013
|
|||||||||
Expected volatility
|
43.6
|
-
|
44.9%
|
45.4
|
-
|
46.2%
|
46.5
|
-
|
47.4%
|
||
Weighted-average volatility
|
43.6
|
-
|
44.9%
|
45.4
|
-
|
46.2%
|
46.6
|
-
|
47.3%
|
||
Expected dividends
|
1.92
|
-
|
2.68%
|
1.90
|
-
|
2.09%
|
2.35
|
-
|
3.02%
|
||
Risk-free rate
|
1.9
|
-
|
2.1%
|
2.0
|
-
|
2.2%
|
0.8
|
-
|
2.2%
|
||
Average risk-free rate
|
1.9
|
-
|
2.1%
|
2.0
|
-
|
2.2%
|
1.1
|
-
|
2.2%
|
||
Expected term (in years)
|
7.2
|
-
|
7.2
|
7.2
|
-
|
7.2
|
5.8
|
-
|
7.2
|
||
Pre-vesting departure rate
|
0.6
|
-
|
0.6%
|
0.5
|
-
|
0.5%
|
0.4
|
-
|
4.1%
|
Shares
(000’s)
|
Weighted-
average
grant-date
fair value
|
||
Non-vested shares and share units at December 31, 2014
|
5,737
|
$15.43
|
|
Granted
|
1,815
|
21.49
|
|
Vested
|
(2,238)
|
14.35
|
|
Forfeited
|
(72)
|
21.11
|
|
Non-vested shares and share units at December 31, 2015
|
5,242
|
17.91
|
·
|
Display Technologies – manufactures glass substrates for flat panel liquid crystal displays.
|
·
|
Optical Communications – manufactures carrier network and enterprise network components for the telecommunications industry.
|
·
|
Environmental Technologies – manufactures ceramic substrates and filters for automotive and diesel applications.
|
·
|
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.
|
·
|
Life Sciences – manufactures glass and plastic labware, equipment, media and reagents to provide workflow solutions for scientific applications.
|
Display
Technologies
|
Optical
Communications
|
Environmental
Technologies
|
Specialty
Materials
|
Life
Sciences
|
All
Other
|
Total
|
||||||||||||||
For the year ended
December 31, 2015
|
||||||||||||||||||||
Net sales
|
$
|
3,086
|
$
|
2,980
|
$
|
1,053
|
$
|
1,107
|
$
|
821
|
$
|
64
|
$
|
9,111
|
||||||
Depreciation
(1)
|
$
|
605
|
$
|
163
|
$
|
125
|
$
|
112
|
$
|
60
|
$
|
43
|
$
|
1,108
|
||||||
Amortization of purchased intangibles
|
$
|
32
|
$
|
20
|
$
|
1
|
$
|
53
|
||||||||||||
Research, development and engineering expenses
(2)
|
$
|
105
|
$
|
138
|
$
|
93
|
$
|
113
|
$
|
23
|
$
|
186
|
$
|
658
|
||||||
Restructuring, impairment and other charges
|
$
|
(1)
|
$
|
16
|
$
|
15
|
||||||||||||||
Equity in earnings of affiliated companies
|
$
|
(9)
|
$
|
17
|
$
|
8
|
||||||||||||||
Income tax (provision) benefit
|
$
|
(499)
|
$
|
(115)
|
$
|
(78)
|
$
|
(85)
|
$
|
(30)
|
$
|
89
|
$
|
(718)
|
||||||
Net income (loss)
(4)
|
$
|
1,095
|
$
|
237
|
$
|
161
|
$
|
167
|
$
|
61
|
$
|
(202)
|
$
|
1,519
|
||||||
Investment in affiliated companies, at equity
|
$
|
43
|
$
|
1
|
$
|
32
|
$
|
261
|
$
|
337
|
||||||||||
Segment assets
(5)
|
$
|
8,344
|
$
|
1,783
|
$
|
1,288
|
$
|
1,407
|
$
|
514
|
$
|
738
|
$
|
14,074
|
||||||
Capital expenditures
|
$
|
594
|
$
|
171
|
$
|
117
|
$
|
88
|
$
|
32
|
$
|
57
|
$
|
1,059
|
||||||
For the year ended
December 31, 2014
|
||||||||||||||||||||
Net sales
|
$
|
3,851
|
$
|
2,652
|
$
|
1,092
|
$
|
1,205
|
$
|
862
|
$
|
53
|
$
|
9,715
|
||||||
Depreciation
(1)
|
$
|
676
|
$
|
154
|
$
|
119
|
$
|
113
|
$
|
60
|
$
|
31
|
$
|
1,153
|
||||||
Amortization of purchased intangibles
|
$
|
10
|
$
|
22
|
$
|
32
|
||||||||||||||
Research, development and engineering expenses
(2)
|
$
|
138
|
$
|
141
|
$
|
91
|
$
|
140
|
$
|
22
|
$
|
177
|
$
|
709
|
||||||
Restructuring, impairment and other charges
|
$
|
45
|
$
|
17
|
$
|
(1)
|
$
|
1
|
$
|
6
|
$
|
68
|
||||||||
Equity in earnings of affiliated companies
|
$
|
(20)
|
$
|
2
|
$
|
18
|
||||||||||||||
Income tax (provision) benefit
|
$
|
(608)
|
$
|
(111)
|
$
|
(89)
|
$
|
(75)
|
$
|
(33)
|
$
|
83
|
$
|
(833)
|
||||||
Net income (loss)
(4)
|
$
|
1,396
|
$
|
194
|
$
|
178
|
$
|
138
|
$
|
67
|
$
|
(198)
|
$
|
1,775
|
||||||
Investment in affiliated companies, at equity
|
$
|
63
|
$
|
2
|
$
|
32
|
$
|
214
|
$
|
311
|
||||||||||
Segment assets
(5)
|
$
|
8,863
|
$
|
1,737
|
$
|
1,297
|
$
|
1,288
|
$
|
553
|
$
|
518
|
$
|
14,256
|
||||||
Capital expenditures
|
$
|
492
|
$
|
145
|
$
|
173
|
$
|
104
|
$
|
30
|
$
|
101
|
$
|
1,045
|
||||||
For the year ended
December 31, 2013
|
||||||||||||||||||||
Net sales
|
$
|
2,545
|
$
|
2,326
|
$
|
919
|
$
|
1,170
|
$
|
851
|
$
|
8
|
$
|
7,819
|
||||||
Depreciation
(1)
|
$
|
481
|
$
|
147
|
$
|
120
|
$
|
137
|
$
|
57
|
$
|
18
|
$
|
960
|
||||||
Amortization of purchased intangibles
|
$
|
10
|
$
|
21
|
$
|
31
|
||||||||||||||
Research, development and engineering expenses
(2)
|
$
|
84
|
$
|
140
|
$
|
89
|
$
|
144
|
$
|
20
|
$
|
116
|
$
|
593
|
||||||
Restructuring, impairment and other charges
|
$
|
7
|
$
|
12
|
$
|
1
|
$
|
19
|
$
|
4
|
$
|
8
|
$
|
51
|
||||||
Equity in earnings of affiliated companies
(3)
|
$
|
357
|
$
|
2
|
$
|
1
|
$
|
4
|
$
|
(24)
|
$
|
340
|
||||||||
Income tax (provision) benefit
|
$
|
(337)
|
$
|
(96)
|
$
|
(63)
|
$
|
(88)
|
$
|
(34)
|
$
|
59
|
$
|
(559)
|
||||||
Net income (loss)
(4)
|
$
|
1,293
|
$
|
189
|
$
|
127
|
$
|
181
|
$
|
68
|
$
|
(165)
|
$
|
1,693
|
||||||
Investment in affiliated companies, at equity
|
$
|
3,666
|
$
|
3
|
$
|
31
|
$
|
10
|
$
|
232
|
$
|
3,942
|
||||||||
Segment assets
(5)
|
$
|
9,501
|
$
|
1,654
|
$
|
1,230
|
$
|
1,333
|
$
|
551
|
$
|
422
|
$
|
14,691
|
||||||
Capital expenditures
|
$
|
350
|
$
|
105
|
$
|
196
|
$
|
62
|
$
|
51
|
$
|
55
|
$
|
819
|
(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)
|
In 2013, equity in earnings of affiliated companies in the Display Technologies segment included a $28 million restructuring charge for our share of costs for headcount reductions and asset write-offs.
|
(4)
|
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.
|
(5)
|
Segment assets include inventory, accounts receivable, property, plant and equipment, net of accumulated depreciation, and associated equity companies and cost investments.
|
·
|
In the Display Technologies segment, three customers accounted for 62% of total segment sales.
|
·
|
In the Optical Communications segment, two customers accounted for 22% of total segment sales.
|
·
|
In the Environmental Technologies segment, three customers accounted for 86% of total segment sales.
|
·
|
In the Specialty Materials segment, three customers accounted for 56% of total segment sales.
|
·
|
In the Life Sciences segment, two customers accounted for 46% of total segment sales.
|
Years ended December 31,
|
||||||||
2015
|
2014
|
2013
|
||||||
Net income of reportable segments
|
$
|
1,721
|
$
|
1,973
|
$
|
1,858
|
||
Net loss of All Other
|
(202)
|
(198)
|
(165)
|
|||||
Unallocated amounts:
|
||||||||
Net financing costs
(1)
|
(111)
|
(113)
|
(66)
|
|||||
Share-based compensation expense
|
(46)
|
(58)
|
(54)
|
|||||
Exploratory research
|
(109)
|
(102)
|
(112)
|
|||||
Corporate contributions
|
(52)
|
(43)
|
(42)
|
|||||
Equity in earnings of affiliated companies, net of impairments
(2)
|
291
|
269
|
207
|
|||||
Unrealized (loss) gain on foreign currency hedges related to translated earnings
|
(573)
|
1,095
|
368
|
|||||
Income tax benefit (provision)
|
568
|
(267)
|
(1)
|
|||||
Other corporate items
|
(148)
|
(84)
|
(32)
|
|||||
Net income
|
$
|
1,339
|
$
|
2,472
|
$
|
1,961
|
(1)
|
Net financing costs include interest income, interest expense, and interest costs and investment gains and losses associated with benefit plans.
|
(2)
|
Primarily represents the equity earnings of Dow Corning.
|
December 31,
|
||||||||
2015
|
2014
|
2013
|
||||||
Total assets of reportable segments
|
$
|
13,336
|
$
|
13,738
|
$
|
14,269
|
||
Non-reportable segments
|
738
|
518
|
422
|
|||||
Unallocated amounts:
|
||||||||
Current assets
(1)
|
5,488
|
7,402
|
6,349
|
|||||
Investments
(2)
|
1,638
|
1,490
|
1,595
|
|||||
Property, plant and equipment, net
(3)
|
1,692
|
1,657
|
1,594
|
|||||
Other non-current assets
(4)
|
5,655
|
5,258
|
4,249
|
|||||
Total assets
|
$
|
28,547
|
$
|
30,063
|
$
|
28,478
|
(1)
|
Includes current corporate assets, primarily cash, short-term investments, current portion of long-term derivative assets and deferred taxes.
|
(2)
|
Represents corporate investments in affiliated companies, at both cost and equity (primarily Dow Corning).
|
(3)
|
Represents corporate property not specifically identifiable to an operating segment.
|
(4)
|
Includes non-current corporate assets, pension assets, long-term derivative assets and deferred taxes.
|
Years Ended December 31,
|
||||||||
Revenues from External Customers
|
2015
|
2014
|
2013
|
|||||
Display Technologies
|
$
|
3,086
|
$
|
3,851
|
$
|
2,545
|
||
Optical Communications
|
||||||||
Carrier network
|
2,194
|
2,036
|
1,782
|
|||||
Enterprise network
|
786
|
616
|
544
|
|||||
Total Optical Communications
|
2,980
|
2,652
|
2,326
|
|||||
Environmental Technologies
|
||||||||
Automotive and other
|
528
|
528
|
485
|
|||||
Diesel
|
525
|
564
|
434
|
|||||
Total Environmental Technologies
|
1,053
|
1,092
|
919
|
|||||
Specialty Materials
|
||||||||
Corning Gorilla Glass
|
810
|
846
|
848
|
|||||
Advanced optics and other specialty glass
|
297
|
359
|
322
|
|||||
Total Specialty Materials
|
1,107
|
1,205
|
1,170
|
|||||
Life Sciences
|
||||||||
Labware
|
512
|
536
|
529
|
|||||
Cell culture products
|
309
|
326
|
322
|
|||||
Total Life Science
|
821
|
862
|
851
|
|||||
All Other
|
64
|
53
|
8
|
|||||
$
|
9,111
|
$
|
9,715
|
$
|
7,819
|
2015
|
2014
|
2013
|
|||||||||||||||
Net
sales
(2)
|
Long-
lived
assets
(1)
|
Net
sales
(2)
|
Long-
lived
assets
(1)
|
Net
sales
(2)
|
Long-
lived
assets
(1)
|
||||||||||||
North America
|
|||||||||||||||||
United States
|
$
|
2,719
|
$
|
8,241
|
$
|
2,275
|
$
|
7,998
|
$
|
2,061
|
$
|
7,170
|
|||||
Canada
|
244
|
144
|
311
|
308
|
|||||||||||||
Mexico
|
37
|
135
|
35
|
50
|
23
|
36
|
|||||||||||
Total North America
|
3,000
|
8,520
|
2,621
|
8,048
|
2,392
|
7,206
|
|||||||||||
Asia Pacific
|
|||||||||||||||||
Japan
|
440
|
1,160
|
608
|
1,311
|
621
|
1,548
|
|||||||||||
Taiwan
|
841
|
2,301
|
1,092
|
2,005
|
1,376
|
2,277
|
|||||||||||
China
|
1,869
|
1,036
|
1,893
|
1,115
|
1,916
|
1,218
|
|||||||||||
Korea
|
1,501
|
3,552
|
1,882
|
3,595
|
96
|
3,234
|
|||||||||||
Other
|
331
|
98
|
308
|
109
|
278
|
127
|
|||||||||||
Total Asia Pacific
|
4,982
|
8,147
|
5,783
|
8,135
|
4,287
|
8,404
|
|||||||||||
Europe
|
|||||||||||||||||
Germany
|
326
|
189
|
397
|
217
|
337
|
171
|
|||||||||||
France
|
90
|
263
|
81
|
277
|
79
|
287
|
|||||||||||
United Kingdom
|
164
|
47
|
187
|
47
|
165
|
6
|
|||||||||||
Other
|
311
|
987
|
369
|
1,109
|
280
|
1,147
|
|||||||||||
Total Europe
|
891
|
1,486
|
1,034
|
1,650
|
861
|
1,611
|
|||||||||||
Latin America
|
|||||||||||||||||
Brazil
|
55
|
36
|
67
|
36
|
77
|
66
|
|||||||||||
Other
|
34
|
35
|
37
|
6
|
|||||||||||||
Total Latin America
|
89
|
36
|
102
|
36
|
114
|
72
|
|||||||||||
All Other
|
149
|
175
|
19
|
165
|
25
|
||||||||||||
Total
|
$
|
9,111
|
$
|
18,189
|
$
|
9,715
|
$
|
17,888
|
$
|
7,819
|
$
|
17,318
|
(1)
|
Long-lived assets primarily include investments, plant and equipment, goodwill and other intangible assets. In 2014 and 2015, assets in the U.S. include the investment in Dow Corning. In 2013, assets in the U.S. and South Korea include investments in Dow Corning and Samsung Corning Precision Materials.
|
(2)
|
Net sales are attributed to countries based on location of customer.
|
Year ended December 31, 2015
|
Balance at
beginning
of period
|
Additions
|
Net
deductions
and other
|
Balance at
end
of period
|
|||||||
Doubtful accounts and allowances
|
$
|
47
|
$
|
1
|
$
|
48
|
|||||
Deferred tax valuation allowance
|
$
|
298
|
$
|
30
|
$
|
90
|
$
|
238
|
|||
Accumulated amortization of purchased intangible assets
|
$
|
216
|
$
|
49
|
$
|
265
|
|||||
Reserves for accrued costs of business restructuring
|
$
|
44
|
$
|
41
|
$
|
3
|
Year ended December 31, 2014
|
Balance at
beginning
of period
|
Additions
|
Net
deductions
and other
|
Balance at
end
of period
|
|||||||
Doubtful accounts and allowances
|
$
|
28
|
$
|
19
|
$
|
47
|
|||||
Deferred tax valuation allowance
|
$
|
286
|
$
|
186
|
$
|
174
|
$
|
298
|
|||
Accumulated amortization of purchased intangible assets
|
$
|
185
|
$
|
31
|
$
|
216
|
|||||
Reserves for accrued costs of business restructuring
|
$
|
44
|
$
|
49
|
$
|
49
|
$
|
44
|
Year ended December 31, 2013
|
Balance at
beginning
of period
|
Additions
|
Net
deductions
and other
|
Balance at
end
of period
|
|||||||
Doubtful accounts and allowances
|
$
|
26
|
$
|
2
|
$
|
28
|
|||||
Deferred tax valuation allowance
|
$
|
210
|
$
|
80
|
$
|
4
|
$
|
286
|
|||
Accumulated amortization of purchased intangible assets
|
$
|
154
|
$
|
31
|
$
|
185
|
|||||
Reserves for accrued costs of business restructuring
|
$
|
42
|
$
|
41
|
$
|
39
|
$
|
44
|
2015
|
First
quarter
|
Second
quarter
|
Third
quarter
|
Fourth
quarter
|
Total
year
|
|||||||||
Net sales
|
$
|
2,265
|
$
|
2,343
|
$
|
2,272
|
$
|
2,231
|
$
|
9,111
|
||||
Gross margin
|
$
|
929
|
$
|
975
|
$
|
892
|
$
|
857
|
$
|
3,653
|
||||
Equity in earnings of affiliated companies
|
$
|
94
|
$
|
62
|
$
|
39
|
$
|
104
|
$
|
299
|
||||
(Provision) benefit for income taxes
|
$
|
(86)
|
$
|
(110)
|
$
|
(6)
|
$
|
55
|
$
|
(147)
|
||||
Net income attributable to Corning Incorporated
|
$
|
407
|
$
|
496
|
$
|
212
|
$
|
224
|
$
|
1,339
|
||||
Basic earnings per common share
|
$
|
0.30
|
$
|
0.38
|
$
|
0.16
|
$
|
0.17
|
$
|
1.02
|
||||
Diluted earnings per common share
|
$
|
0.29
|
$
|
0.36
|
$
|
0.15
|
$
|
0.17
|
$
|
1.00
|
2014
|
First
quarter
|
Second
quarter
|
Third
quarter
|
Fourth
quarter
|
Total
year
|
|||||||||
Net sales
|
$
|
2,289
|
$
|
2,482
|
$
|
2,540
|
$
|
2,404
|
$
|
9,715
|
||||
Gross margin
|
$
|
935
|
$
|
1,032
|
$
|
1,089
|
$
|
996
|
$
|
4,052
|
||||
Restructuring, impairment and other charges
|
$
|
17
|
$
|
34
|
$
|
20
|
$
|
71
|
||||||
Equity in earnings of affiliated companies
|
$
|
86
|
$
|
62
|
$
|
95
|
$
|
23
|
$
|
266
|
||||
Provision for income taxes
|
$
|
(180)
|
$
|
(172)
|
$
|
(395)
|
$
|
(349)
|
$
|
(1,096)
|
||||
Net income attributable to Corning Incorporated
|
$
|
301
|
$
|
169
|
$
|
1,014
|
$
|
988
|
$
|
2,472
|
||||
Basic earnings per common share
|
$
|
0.21
|
$
|
0.11
|
$
|
0.77
|
$
|
0.76
|
$
|
1.82
|
||||
Diluted earnings per common share
|
$
|
0.20
|
$
|
0.11
|
$
|
0.72
|
$
|
0.70
|
$
|
1.73
|
Page
|
|||
for the years ended December 31, 2015, 2014, and 2013
|
|||
for the years ended December 31, 2015, 2014, and 2013
|
|||
for the years ended December 31, 2015, 2014, and 2013
|
|||
for the years ended December 31, 2015, 2014, and 2013
|
|||
Years Ended December 31,
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
Net Sales
|
$
|
5,649.3
|
$
|
6,221.3
|
$
|
5,710.5
|
||||||
Operating Costs and Expenses
|
||||||||||||
Cost of sales
|
4,177.0
|
4,678.1
|
4,430.6
|
|||||||||
Marketing and administrative expenses
|
663.4
|
663.1
|
699.5
|
|||||||||
Gains on long-term sales agreements
|
(178.8)
|
(39.0)
|
(228.5)
|
|||||||||
Asset (gains) charges and restructuring expenses, net
|
(9.1)
|
1,481.0
|
165.5
|
|||||||||
Total operating costs and expenses
|
4,652.5
|
6,783.2
|
5,067.1
|
|||||||||
Operating Income (Loss)
|
996.8
|
(561.9)
|
643.4
|
|||||||||
Interest income
|
12.1
|
9.3
|
7.9
|
|||||||||
Interest expense
|
(52.1)
|
(49.0)
|
(45.7)
|
|||||||||
Other nonoperating income (expense), net
|
(82.9)
|
8.4
|
61.9
|
|||||||||
Implant liability adjustments
|
65.3
|
1,299.8
|
-
|
|||||||||
Income before Income Taxes
|
939.2
|
706.6
|
667.5
|
|||||||||
Income tax provision
|
303.9
|
132.0
|
233.8
|
|||||||||
Net Income
|
635.3
|
574.6
|
433.7
|
|||||||||
Less: Noncontrolling interests’ share in net income
|
72.3
|
61.8
|
57.4
|
|||||||||
Net Income Attributable to Dow Corning Corporation
|
$
|
563.0
|
$
|
512.8
|
$
|
376.3
|
||||||
Weighted-Average Common Shares Outstanding
|
2.5
|
2.5
|
2.5
|
|||||||||
(basic and diluted)
|
||||||||||||
Net Income per Share (basic and diluted)
|
$
|
225.20
|
$
|
205.12
|
$
|
150.52
|
||||||
Dividends Declared per Common Share
|
$
|
114.00
|
$
|
100.00
|
$
|
80.00
|
Years Ended December 31,
|
||||||||||
2015
|
2014
|
2013
|
||||||||
Net Income
|
$
|
635.3
|
$
|
574.6
|
$
|
433.7
|
||||
Other comprehensive income (loss), before tax:
|
||||||||||
Foreign currency translation adjustments
|
(139.9)
|
(170.8)
|
(2.7)
|
|||||||
Unrealized net gain (loss) on securities:
|
||||||||||
Unrealized holding gain arising during the period
|
3.0
|
8.2
|
4.8
|
|||||||
Reclassificaton adjustment for gain included in income
|
-
|
(17.6)
|
-
|
|||||||
Net gain on cash flow hedges:
|
||||||||||
Unrealized gain arising during the period
|
4.1
|
-
|
0.2
|
|||||||
Reclassification adjustment for loss included in income
|
-
|
-
|
5.4
|
|||||||
Defined benefit plan adjustments:
|
||||||||||
Gain (loss) arising during the period
|
160.4
|
(467.7)
|
292.7
|
|||||||
Amortization of pension adjustments included in income
|
84.0
|
49.0
|
81.5
|
|||||||
Other comprehensive income (loss), before tax
|
111.6
|
(598.9)
|
381.9
|
|||||||
Income tax (expense) benefit related to items of OCI
1
|
(82.9)
|
141.9
|
(130.1)
|
|||||||
Other comprehensive income (loss), net of tax
|
28.7
|
(457.0)
|
251.8
|
|||||||
Comprehensive Income
|
664.0
|
117.6
|
685.5
|
|||||||
Less: Noncontrolling interests’ share in comprehensive income
|
63.8
|
47.4
|
44.4
|
|||||||
Comprehensive Income Attributable to Dow Corning Corporation
|
$
|
600.2
|
$
|
70.2
|
$
|
641.1
|
ASSETS
|
||||||||
December 31, 2015
|
December 31, 2014
|
|||||||
Current Assets
|
||||||||
Cash and cash equivalents
|
$
|
2,313.5
|
$
|
2,291.2
|
||||
Accounts receivable (net of allowance for doubtful accounts of $7.3 in 2015 and $10.4 in 2014)
|
706.1
|
745.9
|
||||||
Notes and other receivables
|
213.3
|
246.0
|
||||||
Inventories
|
1,159.5
|
1,083.8
|
||||||
Other current assets
|
118.4
|
81.4
|
||||||
Total current assets
|
4,510.8
|
4,448.3
|
||||||
Property, Plant and Equipment
|
10,573.9
|
10,683.1
|
||||||
Less - Accumulated Depreciation
|
(5,487.6)
|
(5,276.3)
|
||||||
Net property, plant and equipment
|
5,086.3
|
5,406.8
|
||||||
Other Assets
|
||||||||
Marketable securities
|
90.2
|
86.1
|
||||||
Deferred income taxes
|
388.7
|
569.5
|
||||||
Intangible assets (net of accumulated amortization of $61.8 in 2015 and $58.4 in 2014)
|
64.0
|
70.9
|
||||||
Goodwill
|
55.7
|
61.9
|
||||||
Other noncurrent assets
|
378.6
|
496.4
|
||||||
Total other assets
|
977.2
|
1,284.8
|
||||||
Total Assets
|
$
|
10,574.3
|
$
|
11,139.9
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
December 31, 2015
|
December 31, 2014
|
|||||||
Current Liabilities
|
||||||||
Current maturities of long-term debt
|
$
|
6.1
|
$
|
7.0
|
||||
Trade accounts payable
|
482.2
|
522.9
|
||||||
Accrued payrolls and employee benefits
|
167.9
|
207.0
|
||||||
Accrued taxes
|
145.4
|
99.2
|
||||||
Accrued interest
|
113.4
|
106.8
|
||||||
Current deferred revenue
|
254.8
|
319.6
|
||||||
Other current liabilities
|
150.8
|
184.4
|
||||||
Total current liabilities
|
1,320.6
|
1,446.9
|
||||||
Other Liabilities
|
||||||||
Long-term debt
|
784.8
|
945.4
|
||||||
Implant liability
|
291.4
|
363.6
|
||||||
Employee benefits
|
1,304.2
|
1,552.0
|
||||||
Deferred income tax liabilities
|
9.7
|
38.3
|
||||||
Deferred revenue
|
2,553.6
|
2,882.7
|
||||||
Other noncurrent liabilities
|
370.7
|
284.3
|
||||||
Total other liabilities
|
5,314.4
|
6,066.3
|
||||||
Equity
|
||||||||
Stockholders’ equity
|
||||||||
Common stock ($5.00 par value - 2,500,000 shares authorized, issued and outstanding)
|
12.5
|
12.5
|
||||||
Retained earnings
|
4,072.6
|
3,794.6
|
||||||
Accumulated other comprehensive loss
|
(777.2)
|
(814.4)
|
||||||
Dow Corning Corporation’s stockholders’ equity
|
3,307.9
|
2,992.7
|
||||||
Noncontrolling interest in consolidated subsidiaries
|
631.4
|
634.0
|
||||||
Total equity
|
3,939.3
|
3,626.7
|
||||||
Total Liabilities and Equity
|
$
|
10,574.3
|
$
|
11,139.9
|
Years ended December 31,
|
|||||||||||
2015
|
2014
|
2013
|
|||||||||
Cash Flows from Operating Activities
|
|||||||||||
Net income
|
$
|
635.3
|
$
|
574.6
|
$
|
433.7
|
|||||
Depreciation and amortization
|
419.5
|
491.3
|
490.1
|
||||||||
Gains on long-term sales agreements
|
(178.8)
|
(39.0)
|
(228.5)
|
||||||||
Cash flows related to gains on long-term sales agreements
|
-
|
-
|
183.2
|
||||||||
Asset (gains) charges and restructuring expenses, net
|
(9.1)
|
1,481.0
|
113.9
|
||||||||
Changes in restructuring accrual
|
-
|
(14.3)
|
(53.1)
|
||||||||
Changes in deferred revenue, net
|
(215.2)
|
(201.2)
|
(77.8)
|
||||||||
Changes in deferred taxes, net
|
62.2
|
45.7
|
(68.7)
|
||||||||
Tax-related bond deposits, net
|
-
|
29.2
|
17.9
|
||||||||
Other, net
|
236.6
|
83.8
|
119.3
|
||||||||
Changes in operating assets and liabilities
|
|||||||||||
Changes in accounts and notes receivable
|
63.0
|
(46.1)
|
29.9
|
||||||||
Changes in accounts payable
|
(26.5)
|
36.7
|
11.5
|
||||||||
Changes in inventory
|
(103.3)
|
(123.6)
|
3.1
|
||||||||
Changes in other operating assets and liabilities
|
(25.2)
|
98.6
|
14.6
|
||||||||
Cash flows related to reorganization, net
|
(7.8)
|
(0.4)
|
(24.4)
|
||||||||
Implant liability adjustment
|
(65.3)
|
(1,299.8)
|
-
|
||||||||
Cash provided by operating activities
|
785.4
|
1,116.5
|
964.7
|
||||||||
Cash Flows from Investing Activities
|
|||||||||||
Capital expenditures
|
(287.9)
|
(249.8)
|
(363.3)
|
||||||||
Proceeds from sales, maturities, and redemptions of securities
|
-
|
18.9
|
-
|
||||||||
Proceeds from sale of property
|
65.3
|
-
|
-
|
||||||||
Other, net
|
(3.4)
|
(58.5)
|
(29.9)
|
||||||||
Cash used in investing activities
|
(226.0)
|
(289.4)
|
(393.2)
|
||||||||
Cash Flows from Financing Activities
|
|||||||||||
Increase in short-term borrowings
|
-
|
-
|
99.0
|
||||||||
Payments of short-term borrowings
|
-
|
(73.2)
|
(99.0)
|
||||||||
Increase in long-term debt
|
-
|
16.3
|
166.1
|
||||||||
Payments of long-term debt
|
(158.9)
|
(12.6)
|
(202.6)
|
||||||||
Distributions to shareholders of noncontrolling interests
|
(66.4)
|
(19.5)
|
(14.0)
|
||||||||
Acquisition of additional shares of noncontrolling interests
|
-
|
-
|
(266.0)
|
||||||||
Dividends paid to stockholders
|
(285.0)
|
(250.0)
|
(200.0)
|
||||||||
Cash used in financing activities
|
(510.3)
|
(339.0)
|
(516.5)
|
||||||||
Effect of Exchange Rate Changes on Cash
|
(26.8)
|
(23.0)
|
0.7
|
||||||||
Changes in Cash and Cash Equivalents
|
|||||||||||
Net increase in cash and cash equivalents
|
22.3
|
465.1
|
55.7
|
||||||||
Cash and cash equivalents at beginning of period
|
2,291.2
|
1,826.1
|
1,770.4
|
||||||||
Cash and cash equivalents at end of period
|
$
|
2,313.5
|
$
|
2,291.2
|
$
|
1,826.1
|
Dow Corning Corporation Stockholders’ Equity
|
|||||||||||||||||||
Total
|
Noncontrolling
Interest
|
Total
Stockholders’
Equity
|
Retained
Earnings
|
AOCI
1
|
Common
Stock
|
||||||||||||||
Balance as of December 31, 2012
|
$
|
3,573.2
|
$
|
687.0
|
$
|
2,886.2
|
$
|
3,510.3
|
$
|
(636.6)
|
$
|
12.5
|
|||||||
Net Income
|
433.7
|
57.4
|
376.3
|
376.3
|
|||||||||||||||
Other comprehensive income (loss), net of tax
|
|||||||||||||||||||
Foreign currency translation adjustments
|
(2.7)
|
(14.2)
|
11.5
|
11.5
|
|||||||||||||||
Unrealized net gain on available for sale securities
|
4.8
|
1.1
|
3.7
|
3.7
|
|||||||||||||||
Net gain on cash flow hedges
|
3.6
|
-
|
3.6
|
3.6
|
|||||||||||||||
Pension and other postretirement benefit adjustments
|
246.1
|
0.1
|
246.0
|
246.0
|
|||||||||||||||
Total comprehensive income
|
685.5
|
44.4
|
641.1
|
||||||||||||||||
Dividends declared on common stock, distributions to shareholders of noncontrolling interests and other
|
(214.0)
|
(14.0)
|
(200.0)
|
(200.0)
|
|||||||||||||||
Acquisition of additional shares of noncontrolling interests
|
(266.1)
|
(111.3)
|
(154.8)
|
(154.8)
|
|||||||||||||||
Balance as of December 31, 2013
|
$
|
3,778.6
|
$
|
606.1
|
$
|
3,172.5
|
$
|
3,531.8
|
$
|
(371.8)
|
$
|
12.5
|
|||||||
Net Income
|
574.6
|
61.8
|
512.8
|
512.8
|
|||||||||||||||
Other comprehensive income (loss), net of tax
|
|||||||||||||||||||
Foreign currency translation adjustments
|
(170.8)
|
(12.7)
|
(158.1)
|
(158.1)
|
|||||||||||||||
Unrealized net (loss) on available for sale securities
|
(9.4)
|
(1.6)
|
(7.8)
|
(7.8)
|
|||||||||||||||
Pension and other postretirement benefit adjustments
|
(276.8)
|
(0.1)
|
(276.7)
|
(276.7)
|
|||||||||||||||
Total comprehensive income
|
117.6
|
47.4
|
70.2
|
||||||||||||||||
Dividends declared on common stock, distributions to shareholders of noncontrolling interests and other
|
(269.5)
|
(19.5)
|
(250.0)
|
(250.0)
|
|||||||||||||||
Balance as of December 31, 2014
|
$
|
3,626.7
|
$
|
634.0
|
$
|
2,992.7
|
$
|
3,794.6
|
$
|
(814.4)
|
$
|
12.5
|
|||||||
Net Income
|
635.3
|
72.3
|
563.0
|
563.0
|
|||||||||||||||
Other comprehensive income (loss), net of tax
|
|||||||||||||||||||
Foreign currency translation adjustments
|
(139.9)
|
(9.0)
|
(130.9)
|
(130.9)
|
|||||||||||||||
Unrealized net gain on available for sale securities
|
3.0
|
0.2
|
2.8
|
2.8
|
|||||||||||||||
Net gain on cash flow hedges
|
2.6
|
-
|
2.6
|
2.6
|
|||||||||||||||
Pension and other postretirement benefit adjustments
|
163.0
|
0.3
|
162.7
|
162.7
|
|||||||||||||||
Total comprehensive income
|
664.0
|
63.8
|
600.2
|
||||||||||||||||
Dividends declared on common stock, distributions to shareholders of noncontrolling interests and other
|
(351.4)
|
(66.4)
|
(285.0)
|
(285.0)
|
|||||||||||||||
Balance as of December 31, 2015
|
$
|
3,939.3
|
$
|
631.4
|
$
|
3,307.9
|
$
|
4,072.6
|
$
|
(777.2)
|
$
|
12.5
|
Note
|
Page
|
||
1
|
|||
2
|
|||
3
|
|||
4
|
|||
5
|
|||
6
|
|||
7
|
|||
8
|
|||
9
|
|||
10
|
|||
11
|
|||
12
|
|||
13
|
|||
14
|
|||
15
|
|||
16
|
|||
17
|
|||
18
|
|||
19
|
|||
20
|
December 31, 2015
|
||||||||||||||
Level
|
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
(Losses)
|
Fair
Value
|
||||||||||
Debt Securities - Auction rate preferred securities
|
Level 3
|
$
|
76.0
|
$
|
-
|
$
|
(0.4)
|
$
|
75.6
|
|||||
Foreign Equity Securities
|
Level 1
|
0.5
|
2.2
|
-
|
2.7
|
|||||||||
Other
|
Level 1
|
11.9
|
-
|
-
|
11.9
|
|||||||||
Total Marketable Securities
|
$
|
88.4
|
$
|
2.2
|
$
|
(0.4)
|
$
|
90.2
|
||||||
December 31, 2014
|
||||||||||||||
Level
|
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
(Losses)
|
Fair
Value
|
||||||||||
Debt Securities - Auction rate preferred securities
|
Level 3
|
$
|
76.0
|
$
|
-
|
$
|
(3.1)
|
$
|
72.9
|
|||||
Foreign Equity Securities
|
Level 1
|
0.5
|
2.1
|
-
|
2.6
|
|||||||||
Other
|
Level 1
|
10.6
|
-
|
-
|
10.6
|
|||||||||
Total Marketable Securities
|
$
|
87.1
|
$
|
2.1
|
$
|
(3.1)
|
$
|
86.1
|
2015
|
2014
|
||||
Beginning balance as of January 1
|
$
|
72.9
|
$
|
69.0
|
|
Transfers in to Level 3
|
-
|
-
|
|||
Transfers out of Level 3
|
-
|
-
|
|||
Change in unrealized losses in other comprehensive loss
|
2.7
|
3.9
|
|||
Realized gains/(losses) included in earnings
|
-
|
-
|
|||
Sales/redemptions of assets classified as Level 3
|
-
|
-
|
|||
Ending balance as of December 31
|
$
|
75.6
|
$
|
72.9
|
December 31, 2015
|
||||||||
Fair
Value
|
Valuation
Technique
|
Unobservable
Input
|
Range
|
|||||
Auction rate preferred securities
|
$75.6
|
Effective
interest
|
Market required
effective interest
rate
|
4.0% - 4.8%
|
December 31, 2015
|
December 31, 2014
|
||||
Produced goods
|
$
|
871.5
|
$
|
777.8
|
|
Purchased materials
|
162.6
|
181.5
|
|||
Maintenance and supplies
|
125.4
|
124.5
|
|||
Total Inventory
|
$
|
1,159.5
|
$
|
1,083.8
|
Years Ended December 31,
|
||||||||
2015
|
2014
|
2013
|
||||||
Domestic
|
$
|
728.5
|
$
|
358.5
|
$
|
276.5
|
||
Foreign
|
210.7
|
348.1
|
391.0
|
|||||
Total
|
$
|
939.2
|
$
|
706.6
|
$
|
667.5
|
Years Ended December 31,
|
|||||||||||||||||
2015
|
2014
|
2013
|
|||||||||||||||
Current
|
Deferred
|
Total
|
Current
|
Deferred
|
Total
|
Current
|
Deferred
|
Total
|
|||||||||
Domestic
|
$121.1
|
$92.4
|
$213.5
|
$(30.3)
|
$33.0
|
$ 2.7
|
$213.1
|
$(154.8)
|
$ 58.3
|
||||||||
Foreign
|
121.6
|
(31.2)
|
90.4
|
113.4
|
15.9
|
129.3
|
114.6
|
60.9
|
175.5
|
||||||||
Total
|
$242.7
|
$61.2
|
$303.9
|
$ 83.1
|
$48.9
|
$132.0
|
$327.7
|
$ (93.9)
|
$233.8
|
December 31,
|
|||||||
2015
|
2014
|
||||||
Deferred Tax Assets:
|
|||||||
Implant costs
|
$
|
105.8
|
$
|
132.4
|
|||
Postretirement benefit obligations
|
460.6
|
513.1
|
|||||
Tax loss carryforwards
|
123.7
|
151.4
|
|||||
Tax credit carryforwards
|
257.4
|
427.5
|
|||||
Accruals and other
|
81.5
|
69.8
|
|||||
Inventories
|
29.5
|
18.9
|
|||||
Long-term debt
|
45.5
|
45.5
|
|||||
Investments in partnerships
|
98.8
|
66.0
|
|||||
Deferred revenue
|
159.7
|
172.6
|
|||||
Total deferred tax assets
|
$
|
1,362.5
|
$
|
1,597.2
|
|||
Deferred tax liabilities:
|
|||||||
Property, plant and equipment
|
(860.2)
|
(868.1)
|
|||||
Net deferred tax assets prior to valuation allowance
|
$
|
502.3
|
$
|
729.1
|
|||
Less: Valuation allowance
|
(123.2)
|
(197.9)
|
|||||
Net Deferred Tax Assets
|
$
|
379.1
|
$
|
531.2
|
Years Ended December 31,
|
|||||||||
2015
|
2014
|
2013
|
|||||||
Income Tax Provision at Statutory Rate
|
$
|
328.7
|
$
|
247.3
|
$
|
233.6
|
|||
Increase/(Decrease) in Income Tax Provision due to:
|
|||||||||
Foreign provisions and related items
|
(12.6)
|
(16.8)
|
6.7
|
||||||
Domestic manufacturing deduction
|
(13.6)
|
8.5
|
(20.7)
|
||||||
Valuation allowances
|
(4.0)
|
(4.3)
|
11.7
|
||||||
Change in foreign tax rates
|
7.9
|
-
|
13.1
|
||||||
Tax reserves
|
-
|
-
|
(8.1)
|
||||||
U.S. tax effect of foreign earnings and dividends
|
3.5
|
(93.6)
|
2.9
|
||||||
Other, net
|
(6.0)
|
(9.1)
|
(5.4)
|
||||||
Total Income Tax Provision at Effective Rate
|
303.9
|
132.0
|
233.8
|
||||||
Effective Rate
|
32.4%
|
18.7%
|
35.0%
|
Year
|
Year
|
||||
United Kingdom
|
2013
|
Korea
|
2013
|
||
Belgium
|
2013
|
Brazil
|
2010
|
||
Japan
|
2015
|
China
|
2010
|
||
Germany
|
2011
|
United States
|
2006
|
Years Ended December 31,
|
||||||||
2015
|
2014
|
2013
|
||||||
Unrecognized tax benefits as of January 1,
|
$
|
102.4
|
$
|
89.5
|
$
|
16.9
|
||
Additions based on tax positions related to the current year
|
3.4
|
11.2
|
70.6
|
|||||
Additions for tax positions of prior years
|
72.1
|
16.7
|
33.7
|
|||||
Reductions to tax positions related to the current year
|
-
|
-
|
-
|
|||||
Reductions for tax positions of prior years
|
(1.0)
|
(2.1)
|
(5.6)
|
|||||
Settlements
|
(66.7)
|
(12.9)
|
(26.1)
|
|||||
Balance as of December 31,
|
$
|
110.2
|
$
|
102.4
|
$
|
89.5
|
Previously
Reported
|
Adjustments
|
As Adopted
|
|||||||
Consolidated Balance Sheet
|
|||||||||
Deferred income tax assets - current
|
$
|
263.7
|
$
|
(263.7)
|
$
|
-
|
|||
Deferred income taxes - noncurrent
|
311.0
|
258.5
|
569.5
|
||||||
Deferred income tax liability - current*
|
1.3
|
(1.3)
|
-
|
||||||
Deferred income tax liabilities - noncurrent
|
42.2
|
(3.9)
|
38.3
|
||||||
*presented within Other current liabilities
|
Estimated Useful
|
December 31,
|
|||||||
Life (Years)
|
2015
|
2014
|
||||||
Land
|
-
|
$
|
128.2
|
$
|
138.8
|
|||
Land improvements
|
11-20
|
349.8
|
355.3
|
|||||
Buildings
|
18-33
|
2,208.3
|
2,248.4
|
|||||
Machinery and equipment
|
3-25
|
7,734.5
|
7,774.8
|
|||||
Construction-in-progress
|
-
|
153.1
|
165.8
|
|||||
Total property, plant and equipment
|
$
|
10,573.9
|
$
|
10,683.1
|
||||
Accumulated depreciation
|
(5,487.6)
|
(5,276.3)
|
||||||
Net property, plant and equipment
|
$
|
5,086.3
|
$
|
5,406.8
|
December 31, 2015
|
|||||||||
Gross
Carrying Amount
|
Accumulated
Amortization
|
Net
Carrying Amount
|
|||||||
Patents and licenses
|
$
|
5.6
|
$
|
(4.5)
|
$
|
1.1
|
|||
Completed technology
|
13.3
|
(10.7)
|
2.6
|
||||||
Electricity contract
|
35.3
|
(17.7)
|
17.6
|
||||||
Land use rights
|
49.2
|
(7.9)
|
41.3
|
||||||
Other
|
22.4
|
(21.0)
|
1.4
|
||||||
Total
|
$
|
125.8
|
$
|
(61.8)
|
$
|
64.0
|
|||
December 31, 2014
|
|||||||||
Gross
Carrying Amount
|
Accumulated
Amortization
|
Net
Carrying Amount
|
|||||||
Patents and licenses
|
$
|
5.6
|
$
|
(4.2)
|
$
|
1.4
|
|||
Completed technology
|
13.3
|
(9.8)
|
3.5
|
||||||
Electricity contract
|
35.3
|
(15.8)
|
19.5
|
||||||
Land use rights
|
52.4
|
(7.5)
|
44.9
|
||||||
Other
|
22.7
|
(21.1)
|
1.6
|
||||||
Total
|
$
|
129.3
|
$
|
(58.4)
|
$
|
70.9
|
Years Ended December 31,
|
|||||||||||
2015
|
Rates
|
2014
|
Rates
|
||||||||
Long-term debt
|
|||||||||||
Variable rate notes due 2016
|
$
|
-
|
$
|
150.0
|
1.3%
|
||||||
Fixed rate notes due 2018
|
350.0
|
4.1%
|
350.0
|
4.1%
|
|||||||
Variable rate bonds due 2019
|
0.5
|
0.1%
|
2.0
|
0.2%
|
|||||||
Fixed rate notes due 2021
|
350.0
|
4.8%
|
350.0
|
4.8%
|
|||||||
Other obligations and capital leases
|
90.4
|
1.9-9.0%
|
100.4
|
2.6-9.0%
|
|||||||
Total long-term debt
|
$
|
790.9
|
$
|
952.4
|
|||||||
Less current maturities of long-term debt
|
6.1
|
7.0
|
|||||||||
Total long-term debt due after one year
|
$
|
784.8
|
$
|
945.4
|
2015
|
2014
|
2013
|
|||||||
Beginning balance as of January 1
|
$
|
3,202.3
|
$
|
3,442.6
|
$
|
3,572.3
|
|||
Average price revenue generated
|
-
|
-
|
-
|
||||||
Average price revenue recognized
|
(13.6)
|
(19.4)
|
(15.8)
|
||||||
Advanced payments received
|
-
|
65.8
|
111.2
|
||||||
Advanced payments applied
|
(197.8)
|
(246.6)
|
(175.4)
|
||||||
Contract resolution / other
|
(182.5)
|
(40.1)
|
(49.7)
|
||||||
Ending balance as of December 31
|
$
|
2,808.4
|
$
|
3,202.3
|
$
|
3,442.6
|
U.S. Plans
|
Non-U.S. Plans
|
Total
|
|||||||||||||||
Years Ended December 31,
|
2015
|
2014
|
2013
|
2015
|
2014
|
2013
|
2015
|
2014
|
2013
|
||||||||
Net Periodic Benefit Cost
|
|||||||||||||||||
Service cost
|
$ 71.5
|
$ 49.9
|
$ 61.6
|
$ 13.2
|
$ 13.2
|
$ 26.0
|
$ 84.7
|
$ 63.1
|
$ 87.6
|
||||||||
Interest cost on projected benefit obligations
|
91.3
|
90.3
|
83.1
|
25.6
|
33.7
|
30.5
|
116.9
|
124.0
|
113.6
|
||||||||
Expected return on plan assets
|
(82.4)
|
(74.8)
|
(71.6)
|
(27.8)
|
(34.8)
|
(30.6)
|
(110.2)
|
(109.6)
|
(102.2)
|
||||||||
Amortization of net prior service costs
|
2.4
|
2.4
|
2.4
|
0.9
|
1.0
|
1.2
|
3.3
|
3.4
|
3.6
|
||||||||
Amortization of net losses
|
69.6
|
39.4
|
59.1
|
7.2
|
4.2
|
11.9
|
76.8
|
43.6
|
71.0
|
||||||||
Other adjustments
|
-
|
-
|
-
|
-
|
-
|
2.6
|
-
|
-
|
2.6
|
||||||||
Total
|
$152.4
|
$107.2
|
$134.6
|
$ 19.1
|
$ 17.3
|
$ 41.6
|
$171.5
|
$124.5
|
$176.2
|
U.S. Plans
|
Non-U.S. Plans
|
Total
|
|||||||||||||||
2015
|
2014
|
2015
|
2014
|
2015
|
2014
|
||||||||||||
Amortization of net prior service costs
|
$
|
(2.4)
|
$
|
(2.4)
|
$
|
(0.6)
|
$
|
(0.6)
|
$
|
(3.0)
|
$
|
(3.0)
|
|||||
Amortization of net losses or settlement recognition
|
(69.6)
|
(39.4)
|
(7.7)
|
(4.0)
|
(77.3)
|
(43.4)
|
|||||||||||
Net loss (gain) arising during the year
|
(78.7)
|
377.9
|
(71.1)
|
78.9
|
(149.8)
|
456.8
|
|||||||||||
Total
|
$
|
(150.7)
|
$
|
336.1
|
$
|
(79.4)
|
$
|
74.3
|
$
|
(230.1)
|
$
|
410.4
|
U.S. Plans
|
Non-U.S. Plans
|
Total
|
|||||||||||||||
2015
|
2014
|
2015
|
2014
|
2015
|
2014
|
||||||||||||
Projected benefit obligation
|
$
|
2,329.8
|
$
|
2,458.4
|
$
|
723.3
|
$
|
826.4
|
$
|
3,053.1
|
$
|
3,284.8
|
|||||
Accumulated benefit obligation
|
1,982.8
|
2,080.1
|
705.2
|
808.0
|
2,688.0
|
2,888.1
|
|||||||||||
Fair value of plan assets
|
1,490.2
|
1,483.9
|
581.9
|
608.6
|
2,072.1
|
2,092.5
|
U.S. Plans
|
Non-U.S. Plans
|
Total
|
||||||||||||||||
2015
|
2014
|
2015
|
2014
|
2015
|
2014
|
|||||||||||||
Change in benefit obligation
|
||||||||||||||||||
Projected benefit obligation, beginning of year
|
$
|
2,458.4
|
$
|
1,948.3
|
$
|
951.3
|
$
|
867.9
|
$
|
3,409.7
|
$
|
2,816.2
|
||||||
Service cost
|
71.5
|
49.9
|
13.2
|
13.2
|
84.7
|
63.1
|
||||||||||||
Interest cost
|
91.3
|
90.3
|
25.6
|
33.7
|
116.9
|
124.0
|
||||||||||||
Actuarial (gains) losses
|
(196.5)
|
482.0
|
(80.4)
|
141.4
|
(276.9)
|
623.4
|
||||||||||||
Foreign currency exchange rate changes
|
-
|
-
|
(53.6)
|
(75.9)
|
(53.6)
|
(75.9)
|
||||||||||||
Benefits paid and settlements
|
(94.9)
|
(112.1)
|
(27.7)
|
(29.0)
|
(122.6)
|
(141.1)
|
||||||||||||
Projected benefit obligation, end of year
|
$
|
2,329.8
|
$
|
2,458.4
|
$
|
828.4
|
$
|
951.3
|
$
|
3,158.2
|
$
|
3,409.7
|
||||||
Fair value of plan assets
|
||||||||||||||||||
Fair value of plan assets, beginning of year
|
$
|
1,483.9
|
$
|
1,330.5
|
$
|
697.7
|
$
|
661.1
|
$
|
2,181.6
|
$
|
1,991.6
|
||||||
Actual return on plan assets
|
(35.4)
|
179.0
|
18.4
|
97.2
|
(17.0)
|
276.2
|
||||||||||||
Foreign currency exchange rate changes
|
-
|
-
|
(39.7)
|
(50.0)
|
(39.7)
|
(50.0)
|
||||||||||||
Employer contributions
|
136.6
|
86.5
|
17.5
|
18.4
|
154.1
|
104.9
|
||||||||||||
Benefits paid and settlements
|
(94.9)
|
(112.1)
|
(27.7)
|
(29.0)
|
(122.6)
|
(141.1)
|
||||||||||||
Fair value of plan assets, end of year
|
$
|
1,490.2
|
$
|
1,483.9
|
$
|
666.2
|
$
|
697.7
|
$
|
2,156.4
|
$
|
2,181.6
|
||||||
Funded status of plans
|
$
|
(839.6)
|
$
|
(974.5)
|
$
|
(162.2)
|
$
|
(253.6)
|
$
|
(1,001.8)
|
$
|
(1,228.1)
|
||||||
Accumulated benefit obligation
|
1,928.8
|
2,080.1
|
769.7
|
875.8
|
2,752.5
|
2,955.9
|
December 31, 2015
|
|||||||||||
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||
Cash and cash equivalents
|
$
|
9.0
|
$
|
-
|
$
|
-
|
$
|
9.0
|
|||
Equity securities
|
198.9
|
3.4
|
-
|
202.3
|
|||||||
Corporate debt securities
|
-
|
370.0
|
-
|
370.0
|
|||||||
U.S. government debt securities
|
-
|
232.1
|
-
|
232.1
|
|||||||
U.S. government guaranteed mortgage backed securities
|
-
|
15.2
|
-
|
15.2
|
|||||||
Other governmental debt securities
|
1.1
|
60.5
|
-
|
61.6
|
|||||||
Investment funds
|
40.8
|
1,222.6
|
-
|
1,263.4
|
|||||||
Other
|
-
|
2.8
|
-
|
2.8
|
|||||||
Total
|
$
|
249.8
|
$
|
1,906.6
|
$
|
-
|
$
|
2,156.4
|
|||
December 31, 2014
|
|||||||||||
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||
Cash and cash equivalents
|
$
|
5.6
|
$
|
-
|
$
|
-
|
$
|
5.6
|
|||
Equity securities
|
194.5
|
3.6
|
-
|
198.1
|
|||||||
Corporate debt securities
|
-
|
396.4
|
-
|
396.4
|
|||||||
U.S. government debt securities
|
-
|
258.6
|
-
|
258.6
|
|||||||
U.S. government guaranteed mortgage backed securities
|
-
|
24.9
|
-
|
24.9
|
|||||||
Other governmental debt securities
|
1.2
|
75.2
|
-
|
76.4
|
|||||||
Investment funds
|
45.1
|
1,170.3
|
0.4
|
1,215.8
|
|||||||
Other
|
-
|
5.8
|
-
|
5.8
|
|||||||
Total
|
$
|
246.4
|
$
|
1,934.8
|
$
|
0.4
|
$
|
2,181.6
|
Beginning balance as of January 1, 2015
|
$
|
0.4
|
Actual return on assets
|
-
|
|
Purchases
|
-
|
|
Sales
|
(0.4)
|
|
Ending balance as of December 31, 2015
|
$
|
-
|
U.S. Plans
|
Non-U.S. Plans
|
Total
|
|||||||||||||||||
2015
|
2014
|
2015
|
2014
|
2015
|
2014
|
||||||||||||||
Current benefit liabilities
|
$
|
(6.7)
|
$
|
(6.1)
|
$
|
(5.0)
|
$
|
(4.2)
|
$
|
(11.7)
|
$
|
(10.3)
|
|||||||
Noncurrent benefit liabilities
|
(832.9)
|
(968.4)
|
(157.2)
|
(249.4)
|
(990.1)
|
(1,217.8)
|
|||||||||||||
Total recognized liabilities
|
$
|
(839.6)
|
$
|
(974.5)
|
$
|
(162.2)
|
$
|
(253.6)
|
$
|
(1,001.8)
|
$
|
(1,228.1)
|
|||||||
Amounts recognized in accumulated other comprehensive loss (pre-tax)
|
|||||||||||||||||||
Prior service cost
|
$
|
5.7
|
$
|
8.1
|
$
|
3.4
|
$
|
4.4
|
$
|
9.1
|
$
|
12.5
|
|||||||
Net loss
|
914.9
|
1,063.2
|
125.7
|
214.6
|
1,040.6
|
1,277.8
|
|||||||||||||
Accumulated other comprehensive loss
|
$
|
920.6
|
$
|
1,071.3
|
$
|
129.1
|
$
|
219.0
|
$
|
1,049.7
|
$
|
1,290.3
|
Benefit Obligations as of December 31,
|
|||||||||||
U.S. Plans
|
Non-U.S. Plans
|
Total
|
|||||||||
2015
|
2014
|
2015
|
2014
|
2015
|
2014
|
||||||
Discount rate
|
4.2%
|
3.8%
|
3.2%
|
2.8%
|
4.0%
|
3.5%
|
|||||
Rate of increase in future compensation levels
|
4.3%
|
4.3%
|
1.0%
|
1.0%
|
3.4%
|
3.4%
|
Net Periodic Pension Cost for the Years Ended December 31,
|
|||||||||||||||||
U.S. Plans
|
Non-U.S. Plans
|
Total
|
|||||||||||||||
2015
|
2014
|
2013
|
2015
|
2014
|
2013
|
2015
|
2014
|
2013
|
|||||||||
Discount rate
|
3.8%
|
4.8%
|
4.0%
|
2.8%
|
4.0%
|
3.8%
|
3.5%
|
4.5%
|
4.0%
|
||||||||
Rate of increase in future compensation levels
|
4.3%
|
4.3%
|
4.3%
|
1.1%
|
1.0%
|
3.6%
|
3.4%
|
3.4%
|
4.1%
|
||||||||
Expected long-term rate of return on plan assets
|
5.6%
|
5.6%
|
5.6%
|
4.5%
|
5.6%
|
5.6%
|
5.3%
|
5.6%
|
5.6%
|
Estimated Future Benefit Payments
|
||||||
U.S. Plans
|
Non-U.S. Plans
|
Total
|
||||
2016
|
$ 93.6
|
$ 27.1
|
$ 120.7
|
|||
2017
|
95.7
|
29.9
|
125.6
|
|||
2018
|
98.7
|
31.7
|
130.4
|
|||
2019
|
102.0
|
34.0
|
136.0
|
|||
2020
|
106.0
|
32.7
|
138.7
|
|||
2021-2025
|
601.9
|
207.8
|
809.7
|
Years Ended December 31,
|
||||||||||
2015
|
2014
|
2013
|
||||||||
Net Periodic Postretirement Benefit Cost
|
||||||||||
Service cost
|
$
|
4.8
|
$
|
4.7
|
$
|
5.9
|
||||
Interest cost
|
11.9
|
12.7
|
13.4
|
|||||||
Amortization of prior service credits
|
(3.1)
|
(1.5)
|
(1.6)
|
|||||||
Amortization of actuarial losses
|
6.9
|
4.1
|
8.7
|
|||||||
Total
|
$
|
20.5
|
$
|
20.0
|
$
|
26.4
|
Years Ended December 31,
|
|||||
2015
|
2014
|
||||
Amortization of prior service credits
|
$
|
3.1
|
$
|
1.5
|
|
Amortization of loss
|
(6.9)
|
(4.1)
|
|||
Prior service credit arising during the year
|
-
|
(19.7)
|
|||
Net loss (gain) arising during the year
|
(18.9)
|
29.5
|
|||
Total
|
$
|
(22.7)
|
$
|
7.2
|
December 31,
|
|||||||
2015
|
2014
|
||||||
Change in accumulated postretirement benefit obligation
|
|||||||
Accrued postretirement benefit obligation at beginning of year
|
$
|
329.2
|
$
|
320.0
|
|||
Service cost
|
4.8
|
4.7
|
|||||
Interest cost
|
11.9
|
12.7
|
|||||
Actuarial loss/(gain)
|
(18.9)
|
29.5
|
|||||
Plan change
|
-
|
(19.7)
|
|||||
Benefits paid
|
(13.1)
|
(18.0)
|
|||||
Accumulated postretirement benefit obligation at end of year
|
$
|
313.9
|
$
|
329.2
|
|||
Funded status of plans
|
$
|
(313.9)
|
$
|
(329.2)
|
|||
Amounts recognized in the consolidated balance sheets
|
|||||||
Current benefit liabilities
|
$
|
(18.1)
|
$
|
(17.8)
|
|||
Noncurrent benefit liabilities
|
(295.8)
|
(311.4)
|
|||||
|
Total recognized liabilities
|
$
|
(313.9)
|
$
|
(329.2)
|
||
Amounts recognized in accumulated other comprehensive loss (pre-tax)
|
|||||||
Prior service credit
|
$
|
(18.7)
|
$
|
(21.8)
|
|||
Net loss (gain)
|
82.8
|
108.6
|
|||||
Accumulated other comprehensive loss
|
$
|
64.1
|
$
|
86.8
|
Estimated
Postretirement
Benefit
Payments
|
|||
2016
|
$
18.2
|
||
2017
|
18.5
|
||
2018
|
18.9
|
||
2019
|
19.2
|
||
2020
|
19.5
|
||
2021-2025
|
100.9
|
Foreign currency
translation
adjustment
|
Unrealized net gain
(loss) on available for
sale securities
|
Net gain (loss)
on cash flow
hedges
1
|
Unamortized
pension losses and
prior service costs
2
|
Accumulated other
comprehensive
income (loss)
|
||||||||||
Balance as of December 31, 2012
|
$
|
217.5
|
$
|
2.0
|
$
|
(3.5)
|
$
|
(852.6)
|
$
|
(636.6)
|
||||
Other comprehensive income before reclassifications
|
11.6
|
3.7
|
-
|
192.9
|
208.2
|
|||||||||
Amounts reclassified from AOCI
3
|
-
|
-
|
3.5
|
53.1
|
56.6
|
|||||||||
Net current-period other comprehensive income (loss)
|
11.6
|
3.7
|
3.5
|
246.0
|
264.8
|
|||||||||
Balance as of December 31, 2013
|
$
|
229.1
|
$
|
5.7
|
$
|
-
|
$
|
(606.6)
|
$
|
(371.8)
|
||||
Other comprehensive income before reclassifications
|
(158.1)
|
7.2
|
-
|
(308.3)
|
(459.2)
|
|||||||||
Amounts reclassified from AOCI
3
|
-
|
(15.0)
|
-
|
31.6
|
16.6
|
|||||||||
Net current-period other comprehensive income (loss)
|
(158.1)
|
(7.8)
|
-
|
(276.7)
|
(442.6)
|
|||||||||
Balance as of December 31, 2014
|
$
|
71.0
|
$
|
(2.1)
|
$
|
-
|
$
|
(883.3)
|
$
|
(814.4)
|
||||
Other comprehensive income before reclassifications
|
(130.9)
|
2.8
|
2.6
|
108.3
|
(17.2)
|
|||||||||
Amounts reclassified from AOCI
3
|
-
|
-
|
-
|
54.4
|
54.4
|
|||||||||
Net current-period other comprehensive income (loss)
|
(130.9)
|
2.8
|
2.6
|
162.7
|
37.2
|
|||||||||
Balance as of December 31, 2015
|
$
|
(59.9)
|
$
|
0.7
|
$
|
2.6
|
$
|
(720.6)
|
$
|
(777.2)
|
Years Ended December 31,
|
||||||||||
2015
|
2014
|
2013
|
||||||||
Net gain (loss) on cash flow hedges:
|
||||||||||
Gain (loss) arising during the period
|
$
|
(1.5)
|
$
|
-
|
$
|
(0.1)
|
||||
Less: reclassification for gain included in income
|
-
|
-
|
(2.0)
|
|||||||
Net unrealized gain (loss) on cash flow hedges
|
(1.5)
|
-
|
(2.1)
|
|||||||
Defined benefit plan adjustments:
|
||||||||||
Net gain (loss) arising during the period
|
(52.1)
|
159.4
|
(99.6)
|
|||||||
Less: amortization of pension adjustments in net income
|
(29.3)
|
(17.5)
|
(28.4)
|
|||||||
Defined benefit plans, net
|
(81.4)
|
141.9
|
(128.0)
|
|||||||
Total tax (expense) benefit
|
$
|
(82.9)
|
$
|
141.9
|
$
|
(130.1)
|
·
|
Future claim filing levels in the Settlement Facility will be similar to the RSP;
|
·
|
Future acceptance rates, disease mix, and payment values will be materially consistent with historical experience;
|
·
|
No material negative outcomes in future controversies or disputes over Plan interpretation will occur; and
|
·
|
The Plan will not be modified.
|
Years Ended December 31,
|
||||||||
2015
|
2014
|
2013
|
||||||
Sales to Dow Chemical
|
$
|
21.5
|
$
|
19.3
|
$
|
17.0
|
||
Sales to Corning
|
15.1
|
15.4
|
18.9
|
|||||
Purchases from Dow Chemical
|
45.9
|
52.4
|
69.3
|
|||||
December 31,
|
||||||||
2015
|
2014
|
|||||||
Accounts receivable from Dow Chemical
|
$
|
1.7
|
$
|
2.1
|
||||
Accounts receivable from Corning
|
0.6
|
1.0
|
||||||
Accounts payable to Dow Chemical
|
2.9
|
3.9
|
Years Ended December 31,
|
||||||||
2015
|
2014
|
2013
|
||||||
Sales to nonconsolidated affiliates and noncontrolling shareholders
|
$
|
472.4
|
$
|
461.1
|
$
|
528.6
|
||
Purchases from nonconsolidated affiliates and noncontrolling shareholders
|
378.1
|
357.0
|
337.6
|
|||||
December 31,
|
||||||||
2015
|
2014
|
|||||||
Accounts receivable from nonconsolidated affiliates and noncontrolling shareholders
|
$
|
54.8
|
$
|
91.6
|
||||
Accounts payable to nonconsolidated affiliates and noncontrolling shareholders
|
38.4
|
24.6
|
Page(s)
|
||
Consolidated Financial Statements
|
||
(in thousands, except share and per share amounts)
|
2013
|
2012
|
|||
Assets
|
|||||
Current assets
|
|||||
Cash and cash equivalents
|
$
|
2,525,381
|
$
|
1,609,360
|
|
Short-term financial instruments
|
190,025
|
844,365
|
|||
Accounts and notes receivable
|
|||||
Customers, net of allowance for doubtful accounts of $5,115 and $5,931
|
74,957
|
110,315
|
|||
Related parties
|
277,845
|
382,994
|
|||
Inventories
|
92,767
|
92,324
|
|||
Current deferred income tax assets, net
|
2,062
|
1,914
|
|||
Assets held for sale
|
292,617
|
313,288
|
|||
Other current assets
|
109,291
|
136,571
|
|||
Total current assets
|
3,564,945
|
3,491,131
|
|||
Equity method investments
|
2,352
|
6,689
|
|||
Property, plant and equipment, net
|
3,336,416
|
3,644,033
|
|||
Non-current deferred income tax assets, net
|
102
|
129
|
|||
Other non-current assets
|
183,048
|
243,704
|
|||
Total assets
|
$
|
7,086,863
|
$
|
7,385,686
|
|
Liabilities and Equity
|
|||||
Current liabilities
|
|||||
Accounts payable
|
|||||
Trade accounts payable
|
$
|
3,025
|
$
|
16,098
|
|
Non-trade accounts payable
|
21,753
|
32,834
|
|||
Related parties
|
50,507
|
78,549
|
|||
Income taxes payable
|
109,787
|
158,126
|
|||
Accrued bonus payable
|
60,198
|
71,667
|
|||
Accrued expenses
|
27,967
|
21,431
|
|||
Liabilities held for sale
|
51,095
|
14,228
|
|||
Other current liabilities
|
13,081
|
12,279
|
|||
Total current liabilities
|
337,413
|
405,212
|
|||
Accrued severance benefits, net
|
-
|
5,975
|
|||
Non-current deferred income tax liabilities, net
|
210,740
|
247,185
|
|||
Total liabilities
|
548,153
|
658,372
|
|||
Commitments and contingencies
|
(in thousands, except share and per share amounts)
|
2013
|
2012
|
|||
Shareholders’ equity
|
|||||
Preferred stock: par value $8.51 per share, 153,190 shares authorized, 41,107 shares issued and outstanding
|
$
|
350
|
$
|
350
|
|
Common stock: par value $10.03 per share, 30,000,000 shares authorized, 17,617,462 shares issued and outstanding
|
176,700
|
176,700
|
|||
Additional paid-in capital
|
312,114
|
312,114
|
|||
Retained earnings
|
5,749,288
|
6,040,493
|
|||
Accumulated other comprehensive income
|
290,078
|
185,480
|
|||
Total Samsung Corning Precision Materials equity
|
6,528,530
|
6,715,137
|
|||
Noncontrolling interests
|
10,180
|
12,177
|
|||
Total equity
|
6,538,710
|
6,727,314
|
|||
Total liabilities and equity
|
$
|
7,086,863
|
$
|
7,385,686
|
(in thousands)
|
2013
|
2012
|
2011
|
|||||
Net sales
|
||||||||
Related parties
|
$
|
1,747,484
|
$
|
2,294,153
|
$
|
2,668,020
|
||
Other
|
401,730
|
670,542
|
1,270,572
|
|||||
2,149,214
|
2,964,695
|
3,938,592
|
||||||
Cost of sales
|
953,254
|
964,623
|
1,051,234
|
|||||
Gross profit
|
1,195,960
|
2,000,072
|
2,887,358
|
|||||
Selling and administrative expenses
|
151,812
|
140,927
|
160,861
|
|||||
Research and development expenses
|
80,012
|
92,661
|
79,902
|
|||||
Royalty expenses to related parties
|
55,572
|
81,616
|
213,838
|
|||||
Operating income
|
908,564
|
1,684,868
|
2,432,757
|
|||||
Other income (expense)
|
||||||||
Interest income (expense), net
|
72,772
|
91,914
|
110,561
|
|||||
Foreign exchange (loss) gain, net
|
(10,784)
|
(35,160)
|
5,450
|
|||||
Charitable donations
|
(26,746)
|
(26,815)
|
(23,737)
|
|||||
Other income (expense), net
|
506
|
(5,205)
|
28,187
|
|||||
Income from continuing operations before income taxes
|
944,312
|
1,709,602
|
2,553,218
|
|||||
Provision for income taxes
|
223,502
|
301,652
|
477,230
|
|||||
Income from continuing operations before equity losses
|
720,810
|
1,407,950
|
2,075,988
|
|||||
Equity losses of affiliated companies
|
(5,198)
|
(39,366)
|
(27,758)
|
|||||
Net income from continuing operations
|
715,612
|
1,368,584
|
2,048,230
|
|||||
Discontinued operations:
|
||||||||
(Loss) income from operations
|
(67,021)
|
30,478
|
23,731
|
|||||
Income tax expense
|
539
|
9,621
|
9,318
|
|||||
Net income (loss) from discontinued operations
|
(67,560)
|
20,857
|
14,413
|
|||||
Net income including noncontrolling interests
|
648,052
|
1,389,441
|
2,062,643
|
|||||
Less: Net (loss) income attributable to the noncontrolling interests
|
(1,299)
|
(116)
|
1,873
|
|||||
Net income attributable to Samsung Corning Precision Materials
|
$
|
649,351
|
$
|
1,389,557
|
$
|
2,060,770
|
||
Income from continuing operations attributable to Samsung Corning Precision Materials
|
716,911
|
1,368,700
|
2,046,357
|
|||||
(Loss) income from discontinued operations attributable to Samsung Corning Precision Materials
|
(67,560)
|
20,857
|
14,413
|
|||||
Net income attributable to Samsung Corning Precision Materials
|
$
|
649,351
|
$
|
1,389,557
|
$
|
2,060,770
|
(in thousands)
|
2013
|
2012
|
2011
|
|||||
Net income including noncontrolling interests
|
$
|
648,052
|
$
|
1,389,441
|
$
|
2,062,643
|
||
Other comprehensive income (loss), before tax:
|
||||||||
Foreign currency translation adjustments
|
137,850
|
771,533
|
(357,249)
|
|||||
Unrealized net gain (loss) on available for sale securities
|
||||||||
Unrealized holding gain (loss) arising during the period
|
(735)
|
3,025
|
(6,358)
|
|||||
Less: reclassification adjustment for gain included in income
|
-
|
-
|
(23,441)
|
|||||
Other comprehensive income (loss), before tax:
|
137,115
|
774,558
|
(387,048)
|
|||||
Income tax (expense) benefit related to items of other comprehensive income (loss)
|
(33,182)
|
(187,443)
|
85,151
|
|||||
Other comprehensive income (loss), net of tax:
|
103,933
|
587,115
|
(301,897)
|
|||||
Comprehensive income including noncontrolling interests
|
751,985
|
1,976,556
|
1,760,746
|
|||||
Less: Comprehensive income attributable to the noncontrolling interests
|
(1,964)
|
1,027
|
1,868
|
|||||
Comprehensive income attributable to Samsung Corning Precision Materials
|
$
|
753,949
|
$
|
1,975,529
|
$
|
1,758,878
|
(in thousands)
|
2013
|
2012
|
2011
|
|||||
Cash flows from operating activities
|
||||||||
Net income including noncontrolling interests
|
$
|
648,052
|
$
|
1,389,441
|
$
|
2,062,643
|
||
Adjustments to reconcile net income to net cash provided by operating activities
|
||||||||
Depreciation
|
315,687
|
334,588
|
388,438
|
|||||
Foreign exchange translation (gain) loss, net
|
(140,325)
|
(116,072)
|
(3,382)
|
|||||
Provision for severance benefits
|
27,212
|
26,924
|
18,385
|
|||||
Deferred income tax expense (benefit)
|
(29,817)
|
16,332
|
(21,829)
|
|||||
Equity losses of affiliated companies
|
5,198
|
39,366
|
27,758
|
|||||
Impairment charges / write-off
|
127,196
|
35,173
|
10,954
|
|||||
Amortization of long-term supply contract payment
|
63,341
|
64,745
|
-
|
|||||
Gain on disposal of property, plant and equipment
|
(13,797)
|
(345)
|
(1)
|
|||||
Other, net
|
1,799
|
(14,335)
|
(991)
|
|||||
Changes in operating assets and liabilities
|
||||||||
Accounts and notes receivable
|
137,300
|
57,017
|
(310,924)
|
|||||
Inventories
|
(29,603)
|
6,651
|
(37,203)
|
|||||
Other current assets
|
82,458
|
(7,111)
|
27,629
|
|||||
Payment on long-term supply contract
|
-
|
-
|
(300,000)
|
|||||
Accounts payable and other current liabilities
|
32,538
|
(25,156)
|
(3,741)
|
|||||
Net cash provided by operating activities
|
1,227,239
|
1,807,218
|
1,857,736
|
|||||
Cash flows from investing activities
|
||||||||
Purchases of property, plant and equipment
|
(303,266)
|
(407,451)
|
(512,797)
|
|||||
Decrease (increase) in short-term financial instruments, net
|
607,475
|
21,611
|
(242,721)
|
|||||
Investment in affiliates
|
-
|
(7,000)
|
-
|
|||||
Change in restricted cash, net
|
3,645
|
(11,974)
|
(17,472)
|
|||||
Net proceeds from sale or disposal of assets
|
157,663
|
85,304
|
24,468
|
|||||
Other, net
|
(2,190)
|
5,880
|
(1,681)
|
|||||
Net cash provided by (used in) investing activities
|
463,327
|
(313,630)
|
(750,203)
|
|||||
Cash flows from financing activities
|
||||||||
Increase in short-term borrowings
|
32,059
|
-
|
-
|
|||||
Acquisition of subsidiary’s stock
|
-
|
-
|
(26,074)
|
|||||
Cash dividends to noncontrolling interests
|
(33)
|
(65)
|
(67)
|
|||||
Cash dividends to Samsung Corning Precision Materials shareholders
|
(940,556)
|
(1,960,667)
|
(1,116,619)
|
|||||
Net cash used in financing activities
|
(908,530)
|
(1,960,732)
|
(1,116,686)
|
|||||
Effect of exchange rate changes on cash and cash equivalents
|
133,985
|
379,536
|
(24,063)
|
|||||
Net increase (decrease) in cash and cash equivalents
|
916,021
|
(87,608)
|
(33,216)
|
|||||
Cash and cash equivalents
|
||||||||
Beginning of year
|
1,635,434
|
1,723,042
|
1,756,258
|
|||||
End of year
|
$
|
2,551,455
|
$
|
1,635,434
|
$
|
1,723,042
|
1.
|
Organization and Nature of Operations
|
2.
|
Summary of Significant Accounting Policies
|
(in thousands)
|
2013
|
2012
|
2011
|
||||||
Non-cash transactions
|
|||||||||
Acquisition of capital assets included in accounts payable
|
$
|
9,364
|
$
|
42,463
|
$
|
31,958
|
|||
Cash paid for interest and income taxes
|
|||||||||
Cash paid for interest
|
-
|
-
|
57
|
||||||
Cash paid for income taxes, net of refund
|
303,094
|
440,157
|
405,278
|
(in thousands)
|
2013
|
2012
|
||||||||||||||||
Cost
|
Gross
unrealized
gains
|
Fair
value
|
Cost
|
Gross
unrealized
gains
|
Fair
value
|
|||||||||||||
Equity securities
|
$
|
103
|
$
|
5,732
|
$
|
5,835
|
$
|
103
|
$
|
6,263
|
$
|
6,366
|
Buildings
|
15–40 years
|
|
Machinery and equipment (excluding precious metals)
|
1.5–8 years
|
|
Vehicle, tools, furniture and fixtures
|
2–8 years
|
(in thousands)
|
2013
|
2012
|
2011
|
||||||
Balance at the beginning of the year
|
$
|
77,907
|
$
|
55,023
|
$
|
41,909
|
|||
Provision for severance benefits
|
24,705
|
24,749
|
16,380
|
||||||
Severance payments
|
(6,799)
|
(7,931)
|
(4,057)
|
||||||
Translation adjustments and other
|
1,849
|
6,066
|
791
|
||||||
97,662
|
77,907
|
55,023
|
|||||||
Less: Cumulative contributions to the National Pension Fund
|
(45)
|
(47)
|
(53)
|
||||||
Severance plan assets
|
(100,800)
|
(71,885)
|
(43,099)
|
||||||
Balance at the end of the year
|
$
|
(3,183)
1
|
$
|
5,975
|
$
|
11,871
|
|
1
|
The balance included in other current assets as of December 31, 2013.
|
·
|
Absence of the Company’s ability to recover the carrying amount;
|
·
|
Inability of the equity affiliate to sustain an earnings capacity which would justify the carrying amount of the investment; and
|
·
|
Significant litigation, bankruptcy or other events that could impact recoverability.
|
3.
|
Discontinued Operation
|
(in thousands)
|
2013
|
2012
|
2011
|
||||||
Discontinued Operations:
|
|||||||||
Net sales
|
$
|
162,366
|
$
|
174,197
|
$
|
232,375
|
|||
Earnings (loss) from discontinued operations
|
(67,021)
|
30,478
|
23,731
|
||||||
Income taxes on discontinued operations
|
(539)
|
(9,621)
|
(9,318)
|
||||||
Net (loss) income from discontinued operations
|
$
|
(67,560)
|
$
|
20,857
|
$
|
14,413
|
(in thousands)
|
2013
|
2012
|
||||
Assets
|
||||||
Accounts and notes receivable, net
|
$
|
29,337
|
$
|
25,949
|
||
Inventories, net
|
102,593
|
76,701
|
||||
Property, plant and equipment, net
|
158,862
|
208,273
|
||||
Other assets
|
1,825
|
2,365
|
||||
Assets of discontinued operations
|
$
|
292,617
|
$
|
313,288
|
||
Liabilities
|
||||||
Accounts payable and accrued expenses
|
$
|
9,538
|
$
|
8,414
|
||
Short-term borrowings
1
|
32,059
|
-
|
||||
Other liabilities
|
9,498
|
5,814
|
||||
Liabilities of discontinued operations
|
$
|
51,095
|
$
|
14,228
|
|
1
|
As of December 31, 2013, SCM’s term loan debt was $32,059 thousand, and variable interest rate is contracted. As of December 31, 2013, the weighted average rate was 2.08%. Due to the decision to shut down PV business, the term loan is immediately due and payable.
|
4.
|
Inventories
|
(in thousands)
|
2013
|
2012
|
||||
Finished goods
|
$
|
14,808
|
$
|
13,879
|
||
Semi-finished goods
|
4,685
|
6,783
|
||||
Raw materials
|
17,823
|
21,511
|
||||
Work-in-process
|
768
|
1,046
|
||||
Auxiliary materials
|
54,683
|
49,105
|
||||
$
|
92,767
|
$
|
92,324
|
5.
|
Other Current Assets
|
(in thousands)
|
2013
|
2012
|
||||
Prepaid expenses
|
$
|
79,659
|
$
|
79,926
|
||
Prepaid value added tax
|
-
|
10,907
|
||||
Accrued income receivable
|
4,165
|
17,434
|
||||
Restricted cash
|
24,703
|
28,145
|
||||
Other current assets
|
764
|
159
|
||||
$
|
109,291
|
$
|
136,571
|
6.
|
Equity Method Investments
|
(in thousands)
|
Ownership
interest
1
|
2013
|
2012
|
|||||
Affiliated companies accounted for under the equity method
|
||||||||
Corsam Technologies LLC
|
50%
|
$
|
2,352
|
$
|
6,689
|
|
1
|
This reflects the Company’s direct ownership interests in the affiliated company. The Company does not have control of the entity.
|
7.
|
Property, Plant and Equipment
|
(in thousands)
|
2013
|
2012
|
||||
Building
|
$
|
1,744,579
|
$
|
1,765,014
|
||
Machinery and equipment
|
2,623,229
|
2,705,678
|
||||
Vehicle, tools, furniture and fixtures
|
219,722
|
246,189
|
||||
4,587,530
|
4,716,881
|
|||||
Less: accumulated depreciation
|
(1,964,996)
|
(1,859,087)
|
||||
2,622,534
|
2,857,794
|
|||||
Land
|
258,031
|
254,788
|
||||
Construction-in-progress
|
455,851
|
531,451
|
||||
$
|
3,336,416
|
$
|
3,644,033
|
8.
|
Other Non-current Assets
|
(in thousands)
|
2013
|
2012
|
||||
Deposits
|
$
|
30,844
|
$
|
28,424
|
||
Available-for-sale marketable securities
|
5,835
|
6,366
|
||||
Payment on long-term contract
|
132,435
|
195,645
|
||||
Other non-current assets
|
13,934
|
13,269
|
||||
$
|
183,048
|
$
|
243,704
|
9.
|
Impairment Charges
|
10.
|
Transactions with Related Parties
|
2013 (1)
|
Sales
4
|
Purchases
5
|
Services
Expensed
|
Receivables
|
Payables
|
||||||||||
(in thousands)
|
|||||||||||||||
Samsung affiliates
|
|||||||||||||||
Samsung Display
|
$
|
1,597,601
|
$
|
-
|
$
|
2,475
|
$
|
241,901
|
$
|
281
|
|||||
Samsung C&T Corporation
|
1,170
|
79,460
|
239
|
266
|
11,859
|
||||||||||
Samsung Engineering
|
208
|
5,882
|
6,126
|
-
|
6,968
|
||||||||||
Samsung SDS
|
3,233
|
10,631
|
35,040
|
-
|
14,129
|
||||||||||
SCG
|
100,197
|
-
|
2,910
|
38,010
|
1,187
|
||||||||||
Others
|
160,627
|
20,658
|
39,423
|
10,742
|
6,337
|
||||||||||
1,863,036
|
116,631
|
86,213
|
290,919
|
40,761
|
|||||||||||
Corning
|
161,131
|
36,912
|
62,318
|
1,717
|
11,313
|
||||||||||
$
|
2,024,167
|
$
|
153,543
|
$
|
148,531
|
$
|
292,636
|
$
|
52,074
|
(1)
|
As of and for the year ended December 31, 2013, related parties sales of $83,525 thousand, purchases of $19 thousand and services expenses of $1,653 thousand and related receivables of $14,791 thousand and payables of $1,567 thousand for discontinued operations are included in the above table.
|
2012 (2)
|
Sales
4
|
Purchases
5
|
Services
Expensed
|
Receivables
|
Payables
|
||||||||||
(in thousands)
|
|||||||||||||||
Samsung affiliates
|
|||||||||||||||
Samsung Display
|
$
|
2,231,298
|
$
|
29,919
|
$
|
2,312
|
$
|
349,236
|
$
|
521
|
|||||
Samsung C&T Corporation
|
22
|
50,334
|
286
|
1
|
25,845
|
||||||||||
Samsung Engineering
|
156
|
36,370
|
147
|
7,201
|
640
|
||||||||||
Samsung SDS
|
60
|
71,945
|
35,828
|
-
|
27,829
|
||||||||||
SCG
|
69,779
|
-
|
1,211
|
-
|
-
|
||||||||||
Others
|
17,968
|
21,557
|
53,296
|
7,412
|
17,417
|
||||||||||
2,319,283
|
210,125
|
93,080
|
363,850
|
72,252
|
|||||||||||
Corning
|
126,041
|
79,691
|
89,535
|
31,836
|
6,386
|
||||||||||
$
|
2,445,324
|
$
|
289,816
|
$
|
182,615
|
$
|
395,686
|
$
|
78,638
|
(2)
|
As of and for the year ended December 31, 2012, related parties sales of $98,271 thousand, purchases of $195 thousand and services expenses of $1,029 thousand and related receivables of $12,692 thousand and payables of $89 thousand for discontinued operations are included in the above table.
|
2011 (3)
|
Sales
4
|
Purchases
5
|
Services
Expensed
|
Receivables
|
Payables
|
||||||||||
(in thousands)
|
|||||||||||||||
Samsung affiliates
|
|||||||||||||||
Samsung Electronics
|
$
|
2,580,173
|
$
|
-
|
$
|
8,677
|
$
|
317,693
|
$
|
5,480
|
|||||
Samsung C&T Corporation
|
27
|
66,165
|
496
|
2
|
13,790
|
||||||||||
Samsung Engineering
|
1,034
|
41,619
|
1,279
|
53
|
6,881
|
||||||||||
Samsung SDS
|
15
|
13,923
|
19,844
|
6
|
8,928
|
||||||||||
Others
|
62,234
|
23,937
|
98,208
|
5,091
|
28,638
|
||||||||||
2,643,483
|
145,644
|
128,504
|
322,845
|
63,717
|
|||||||||||
Corning
|
108,916
|
102,037
|
226,441
|
1,039
|
5,478
|
||||||||||
$
|
2,752,399
|
$
|
247,681
|
$
|
354,945
|
$
|
323,884
|
$
|
69,195
|
|
(3)
|
As of and for the year ended December 31, 2011, related parties sales of $84,379 thousand, purchases of $8,885 thousand and services expenses of $1,327 thousand and related receivables of $18,165 thousand and payables of $96 thousand for discontinued operations are included in the above table.
|
|
(4)
|
Transfers of machinery and equipment to related parties including SCG, Samsung Electronics, Samsung SDS and Samsung Fine Chemicals are included.
|
|
(5)
|
Purchases of property, plant and equipment are included.
|
11.
|
Fair Value Measurements
|
12.
|
Income Taxes
|
(in thousands)
|
2013
|
2012
|
2011
|
||||||
Current
|
|||||||||
Domestic (Republic of Korea)
|
$
|
253,319
|
$
|
285,320
|
$
|
499,059
|
|||
Foreign
|
-
|
-
|
-
|
||||||
Total current
|
253,319
|
285,320
|
499,059
|
||||||
Deferred
|
|||||||||
Domestic (Republic of Korea)
|
(29,817)
|
16,332
|
(21,829)
|
||||||
Foreign
|
-
|
-
|
-
|
||||||
Total deferred
|
(29,817)
|
16,332
|
(21,829)
|
||||||
Income taxes on continuing operations
|
$
|
223,502
|
$
|
301,652
|
$
|
477,230
|
(in thousands)
|
2013
|
2012
|
2011
|
||||||
Expected taxes at statutory rate
|
$
|
227,265
|
$
|
404,197
|
$
|
611,161
|
|||
Tax exemption for foreign investment
|
-
|
(107,599)
|
(167,302)
|
||||||
Tax rate changes
|
-
|
-
|
29,633
|
||||||
Tax credits, net of surtax effect
|
-
|
(1,032)
|
(13,737)
|
||||||
Others, net
|
(3,763)
|
6,086
|
17,475
|
||||||
Income taxes on continuing operations
|
$
|
223,502
|
$
|
301,652
|
$
|
477,230
|
|||
Effective tax rate
|
23.80%
|
18.06%
|
18.44%
|
(in thousands)
|
2013
|
2012
|
||||
Deferred income tax assets
|
||||||
Property, plant and equipment
|
$
|
11,466
|
$
|
69
|
||
Accrued bonus payables
|
2,557
|
3,625
|
||||
Other current liabilities
|
398
|
794
|
||||
Equity method investments
|
50,887
|
37,618
|
||||
Other
|
3,289
|
1,067
|
||||
Total tax deferred income tax assets
|
68,597
|
43,173
|
||||
Deferred income tax liabilities
|
||||||
Property, plant and equipment, intangible
|
(270,576)
|
(265,746)
|
||||
Reserve for technology development
|
(6,898)
|
(13,622)
|
||||
Available-for-sale securities
|
(1,385)
|
(1,513)
|
||||
Other
|
1,686
|
(7,434)
|
||||
Total tax deferred income tax liabilities
|
(277,173)
|
(288,315)
|
||||
Net deferred income tax liabilities
|
$
|
(208,576)
|
$
|
(245,142)
|
13.
|
Shareholders’ Equity
|
(in thousands)
|
2013
|
2012
|
2011
|
||||||
Preferred Stock
|
$
|
350
|
$
|
350
|
$
|
350
|
|||
Common Stock
|
176,700
|
176,700
|
176,700
|
||||||
Additional Paid-in Capital
|
312,114
|
312,114
|
312,114
|
||||||
Retained Earnings:
|
|||||||||
Balance at the beginning of year
|
6,040,493
|
6,611,603
|
5,538,151
|
||||||
Net income attributable to Samsung Corning Precision Materials
|
649,351
|
1,389,557
|
2,060,770
|
||||||
Dividends paid to preferred shareholders
|
(1,103)
|
(3,288)
|
(2,786)
|
||||||
Dividends paid to common shareholders
|
(939,453)
|
(1,957,379)
|
(984,532)
|
||||||
Balance at end of year
|
5,749,288
|
6,040,493
|
6,611,603
|
||||||
Accumulated Other Comprehensive Income (loss):
|
|||||||||
Balance at the beginning of year
|
185,480
|
(400,492)
|
(98,600)
|
||||||
Other comprehensive income, net of tax
|
|||||||||
Foreign currency translation adjustment
|
105,155
|
583,679
|
(278,649)
|
||||||
Unrealized net gain on available for sale securities
|
(557)
|
2,293
|
(23,243)
|
||||||
Balance at end of year
|
290,078
|
185,480
|
(400,492)
|
||||||
Total Samsung Corning Precision Materials shareholders’ equity
|
6,528,530
|
6,715,137
|
6,700,275
|
||||||
Noncontrolling interests:
|
|||||||||
Balance at the beginning of year
|
12,177
|
11,214
|
35,487
|
||||||
Net (loss) income attributable to noncontrolling interests
|
(1,299)
|
(116)
|
1,873
|
||||||
Cash dividend to noncontrolling interests
|
(33)
|
(64)
|
(67)
|
||||||
Acquisition of subsidiary’s stock
|
-
|
-
|
(26,074)
|
||||||
OCI attributable to noncontrolling interest, net of tax
|
|||||||||
Foreign currency translation adjustment
|
(665)
|
1,143
|
(5)
|
||||||
Balance at end of year
|
10,180
|
12,177
|
11,214
|
||||||
Total equity
|
$
|
6,538,710
|
$
|
6,727,314
|
$
|
6,711,489
|
(in thousands)
|
2013
|
2012
|
||||
Appropriated
|
||||||
Legal reserve
|
$
|
82,339
|
$
|
82,339
|
||
Reserve for business development
|
30,800
|
30,800
|
||||
Reserve for research and manpower development
|
51,733
|
77,600
|
||||
Voluntary reserve
|
4,157
|
4,157
|
||||
169,029
|
194,896
|
|||||
Unappropriated
|
5,580,259
|
5,845,597
|
||||
$
|
5,749,288
|
$
|
6,040,493
|
14.
|
Accumulated Other Comprehensive Income
|
(in thousands)
|
Unrealized
Gains and
Losses on
Available-for-
sale securities
|
Foreign
currency
translation
adjustment
|
Total
|
||||||
Balances at December 31, 2010
|
$
|
25,089
|
$
|
(123,689)
|
$
|
(98,600)
|
|||
Other comprehensive income before reclassifications
|
198
|
(278,649)
|
(278,451)
|
||||||
Amounts reclassified from accumulated other comprehensive income
|
(23,441)
|
-
|
(23,441)
|
||||||
Net current-period other comprehensive income
|
(23,243)
|
(278,649)
|
(301,892)
|
||||||
Balances at December 31, 2011
|
$
|
1,846
|
$
|
(402,338)
|
$
|
(400,492)
|
|||
Other comprehensive income before reclassifications
|
2,293
|
583,679
|
585,972
|
||||||
Amounts reclassified from accumulated other comprehensive income
|
-
|
-
|
-
|
||||||
Net current-period other comprehensive income
|
2,293
|
583,679
|
585,972
|
||||||
Balances at December 31, 2012
|
$
|
4,139
|
$
|
181,341
|
$
|
185,480
|
|||
Other comprehensive income before reclassifications
|
(557)
|
105,155
|
104,598
|
||||||
Amounts reclassified from accumulated other comprehensive income
|
-
|
-
|
-
|
||||||
Net current-period other comprehensive income
|
(557)
|
105,155
|
104,598
|
||||||
Balances at December 31, 2013
|
$
|
3,582
|
$
|
286,496
|
$
|
290,078
|
2013
|
2012
|
2011
|
Affected line item
in the consolidated
statements of income
|
||||||||
Realized gains on available for sale securities
|
$
|
-
|
$
|
-
|
$
|
30,924
|
Other income, net
|
||||
-
|
-
|
(7,483)
|
Tax expense
|
||||||||
$
|
-
|
$
|
-
|
$
|
23,441
|
Net of tax
|
15.
|
Commitments and Contingencies
|
16.
|
Subsequent Event
|
·
|
On January 15, 2014, the Company entered into a 15 year $1,902,359 thousand borrowing from Corning Luxembourg S. àr.l. and the interest rate is 8.0% per annum.
|
·
|
On January 15, 2014, the Company repurchased shares of $1,902,359 thousand from Samsung Display. As a result, Corning obtained full ownership of the Company, formerly an unconsolidated equity venture with Samsung Display.
|
·
|
Amendment to the agreement on a long-term LCD display glass pricing was signed between Corning and Samsung Display on January 15, 2014. The amendment is effective for ten years, accordingly, the term of the TFT-LCD glass substrate long-term supply agreement, effective as of January 1, 2012 will also be extended from January 1, 2014 to December 31, 2023.
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On January 17, 2014, the Company has entered into the Business Transfer Agreement with SCG to transfer the Target business at Gumi. On February 1, 2014, the transaction closed. The expected proceeds from this transaction are $158,341 thousand and the expected pre-tax gains are $16,786 thousand.
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On January 21, 2014, the Company has entered into the Interest Transfer Agreement of Corsam with SCG to transfer investment in equity of Corsam. The transaction closed on February 1, 2014. No gain and loss expected.
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On January 23, 2014, the Company has entered into the Real Property Sale and Purchase Agreement with SCG to transfer the Gumi facilities. On February 1, 2014, the transaction closed. The expected proceeds from this transaction are $83,998 thousand and the expected pre-tax gains are $16,530 thousand.
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No information found
* THE VALUE IS THE MARKET VALUE AS OF THE LAST DAY OF THE QUARTER FOR WHICH THE 13F WAS FILED.
FUND | NUMBER OF SHARES | VALUE ($) | PUT OR CALL |
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DIRECTORS | AGE | BIO | OTHER DIRECTOR MEMBERSHIPS |
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Mr. Weeks’ significant experience and tenure as a CEO has been of value to the Company and its Directors as we successfully navigated the pandemic, supply chain disruptions, and the recent economic volatility and inflationary headwinds. Mr. Weeks has also been integral to the implementation of our Springboard plan, which we expect will continue to add significant annualized sales growth while leveraging existing capacity and technical capabilities to generate incremental profit and cash flow. Given the uncertainty in 2024 outlook, the Compensation Committee chose to be conservative with Mr. Weeks’ compensation for 2024 despite his track record and strong performance. Mr. Weeks’ base salary was increased by 4% which was in line with average increases for all U.S. salaried employees, and other elements of his pay remained unchanged. Mr Weeks’ compensation in 2024 as follows: | |||
Thomas D. French Director Since 2023. Age 65. Senior Partner Emeritus, McKinsey & Company, Inc. Mr. French retired as a Senior Partner of McKinsey & Company in December 2019, and currently is Senior Partner Emeritus. Over his 33-year career in consulting, he served leading technology-driven industrial companies on strategy, marketing, governance, and organization design. He led the firm’s Global Marketing and Sales Practice for five years, the Americas Practice for seven years, and served on multiple firm governance committees. He is a trustee of several non-profit organizations. Experience, Skills and Qualifications of Particular Relevance to Corning: Mr. French brings four decades of management consulting experience to the Board. In particular, he brings deep familiarity with how global, technology-driven companies approach strategic planning, digital transformation, customer engagement, organization design, innovation, and matters of governance. Mr. French also provides significant experience with respect to the financial controls, risk management approaches, and financial reporting practices of complex global companies. He is also deeply versed in the dynamics of Corning’s end markets, including telecommunications, display glass, advanced materials, and consumer electronics. In his role leading McKinsey’s Marketing and Sales Practice, he gained unique insight into how innovation-driven industrial companies commercialize new technologies and build businesses. | |||
Stephanie A. Burns Director Since 2012. Age 70. Retired Chairman and Chief Executive Officer, Dow Corning Corporation Dr. Burns has nearly 40 years of global innovation and business leadership experience. Dr. Burns joined Dow Corning in 1983 as a researcher and specialist in organosilicon chemistry. In 1994, she became the company’s first director of women’s health. She was elected to the Dow Corning Board of Directors in 2001 and elected as president in 2003. She served as chief executive officer from 2004 until May 2011 and served as chair from 2006 until her retirement in December 2011. Experience, Skills and Qualifications of Particular Relevance to Corning: As the former chief executive officer of a major chemical company, Dr. Burns brings to Corning’s Board broad expertise in global innovation, directing scientific research, manufacturing and commercial management, and science and technology leadership. Reflecting the deep technical skills related to her Ph.D. in organic chemistry, and as the past honorary president of the Society of Chemical Industry, chair of the American Chemistry Council and member of President Obama’s President’s Export Council, Dr. Burns brings the perspectives of a leader in scientific innovation to the Board. Her background in organic chemistry and experience in oversight of complex manufacturing processes, including the polysilicon manufacturing process, which is key in the production of sustainable solar modules and semiconductors, as well as her global scientific innovation and manufacturing and commercial management expertise enable her strong leadership as our Lead Independent Director. | |||
Robert F. Cummings, Jr. Director Since 2006. Age 75. Retired Vice Chairman of Investment Banking, JPMorgan Chase & Co. Mr. Cummings retired as vice chairman of Investment Banking at JPMorgan Chase & Co. in February 2016. He had served in that role since December 2010, advising on client opportunities across sectors and industry groups. Mr. Cummings began his business career in the investment banking division of Goldman, Sachs & Co. in 1973 and was a partner of that firm from 1986 until his retirement in 1998. He served as an advisory director at Goldman Sachs until 2002. Experience, Skills and Qualifications of Particular Relevance to Corning: Mr. Cummings brings nearly 50 years of investment banking experience to the Board; in particular, he brings expertise in public and private financing, business development, private equity, mergers and acquisitions, and other strategic financial issues. Additionally, he brings to the Board experience in the business development and growth of technology, telecommunications, and emerging businesses. Mr. Cummings’ expansive financial experience and broad skillset enable his effective leadership as Chair of our Finance Committee. Top Skills Brought to Our Board | |||
Pamela J. Craig Director Since 2021. Age 68. Retired Chief Financial Officer, Accenture plc. From 2006 through 2013, Ms. Craig served as chief financial officer of Accenture plc., a global management consulting, technology services and outsourcing company, following many other leadership roles in line management, consulting and operations during her 34 years with the company. She is also actively involved in charitable organizations focused on education and on the advancement of women in business, including The Women’s Forum of New York, New York University Stern School of Business, Junior Achievement of New Jersey, and is a member of the Board of Trustees of Smith College. Experience, Skills and Qualifications of Particular Relevance to Corning: Ms. Craig brings to Corning’s Board over 34 years of finance, management, operational, technology and international business expertise from her time as chief financial officer at Accenture. Her skills and experience as the CFO of Accenture are particularly relevant to the perspective she brings to the Audit Committee. In particular, she brings knowledge of business transformations, mergers and acquisitions, strategic planning and business process improvement. She also brings broad oversight and strategic skills from her time on the boards of several large, global public companies. Top Skills Brought to Our Board | |||
Leslie A. Brun Director Since 2018. Age 72. Chairman and Chief Executive Officer, Sarr Group LLC Mr. Brun is chairman and chief executive officer of Sarr Group, LLC, co-founder, chairman and chief executive officer of Ariel Alternatives, LLC, senior advisor of G100, Council Advisors, World 50 and a member of the Council on Foreign Relations. He is also the founder and former chief executive officer and chairman of Hamilton Lane, where he served as chief executive officer and chairman from 1991 until 2005, former lead director of Merck & Co., Inc., former director and chairman of the board of Automatic Data Processing, Inc., former non-executive chairman of CDK Global, Inc., and a former director of Hewlett Packard Enterprise Company. In addition, Mr. Brun also served as a managing director and co-founder of the investment banking group of Fidelity Bank, and as a past vice president in the corporate finance division of E.F. Hutton & Co. Experience, Skills and Qualifications of Particular Relevance to Corning: As the current and former chief executive officer of several large investment organizations, Mr. Brun brings to the Board expertise in finance and investment banking, as well as overall operating and management experience. He has significant experience in identifying and evaluating investment opportunities across a range of industries. He also brings extensive public company directorship and committee experience, in particular with respect to the governance issues facing large public companies. Top Skills Brought to Our Board | |||
Kevin J. Martin Director Since 2013. Age 58. Vice President, Public Policy, Meta Platforms, Inc. Mr. Martin is Vice President, Public Policy at Meta Platforms, Inc. Prior to joining Meta, he was a partner and co-chair of the telecommunications practice at Squire Patton Boggs, an international law firm (2009 to 2015). From March 2005 to January 2009, he was chairman of the Federal Communications Commission (FCC). Mr. Martin has two decades’ experience as a lawyer and policymaker in the telecommunications field. Before joining the FCC as a commissioner in 2001, Mr. Martin was a special assistant to the president for Economic Policy and served on the staff of the National Economic Council, focusing on commerce and technology policy issues. He served as the official U.S. government representative to the G-8’s Digital Opportunity Task Force. Experience, Skills and Qualifications of Particular Relevance to Corning: With twenty-years of legal, telecommunications, technology, and policy experience, Mr. Martin brings exceptional experience to the Board as former chairman of the FCC. His extensive experience in regulation and government affairs, international relations, and the media, telecommunications and technology sectors provide a unique and important perspective on the global communications transformation in which Corning participates. | |||
Daniel P. Huttenlocher Director Since 2015. Age 66. Dean, MIT Stephen A. Schwarzman College of Computing Dr. Huttenlocher is the inaugural Dean of the MIT Schwarzman College of Computing. Prior to joining MIT, Dr. Huttenlocher served as dean and vice provost of Cornell Tech from 2012 to 2019 and worked for Cornell University from 1988 to 2012 in various positions. Before Cornell, Dr. Huttenlocher worked at Xerox Palo Alto Research Center and was Chief Technology Officer at Intelligent Markets, Inc. He has also served as the Chair of the John D. and Catherine T. MacArthur Foundation, an independent foundation that makes grants and impact investments to support non-profit organizations addressing global social challenges. Dr. Huttenlocher holds a Ph.D. in computer science and a Master of Science degree in Electrical Engineering, both from MIT. Experience, Skills and Qualifications of Particular Relevance to Corning: Dr. Huttenlocher is a renowned computer science researcher and educator, inventor, innovator and entrepreneur with two dozen U.S. patents. As the inaugural Dean of Schwarzman College of Computing, Dr. Huttenlocher plays a pivotal role in the college’s mission to be at the forefront of computer science, artificial intelligence research, and education. He brings to the Board years of research and experience in artificial intelligence and its societal impact. He also provides extensive experience in technology innovation and commercialization, customer experience and software. In addition, his understanding of technical computing deepens our understanding of the cybersecurity landscape. |
Customers
Price
Yield
Owner | Position | Direct Shares | Indirect Shares |
---|---|---|---|
WEEKS WENDELL P | - | 762,820 | 11,530 |
WEEKS WENDELL P | - | 683,101 | 10,847 |
McRae Lawrence D | - | 215,254 | 1,045 |
McRae Lawrence D | - | 205,258 | 5,958 |
Musser Eric S | - | 152,944 | 0 |
Amin Jaymin | - | 107,430 | 2,566 |
Evenson Jeffrey W | - | 94,376 | 0 |
Amin Jaymin | - | 86,483 | 2,438 |
Schlesinger Edward A | - | 76,674 | 0 |
Kammerud Jordana Daryl | - | 72,816 | 0 |
Seetharam Soumya | - | 68,054 | 0 |
Kammerud Jordana Daryl | - | 61,965 | 0 |
Evenson Jeffrey W | - | 57,280 | 0 |
BURNS STEPHANIE | - | 56,888 | 107 |
Verkleeren Ronald L | - | 55,096 | 0 |
O'Day Michael Paul | - | 50,622 | 0 |
Seetharam Soumya | - | 44,109 | 0 |
Nelson Avery H III | - | 38,364 | 3,576 |
BLAIR DONALD W | - | 34,773 | 0 |
Capps Cheryl C | - | 31,493 | 0 |
STEVERSON LEWIS A | - | 31,294 | 0 |
STEVERSON LEWIS A | - | 29,378 | 0 |
Bayne John P JR | - | 18,313 | 7,345 |
Becker Stefan | - | 15,729 | 0 |
Zhang John Z | - | 12,546 | 0 |
Zhang John Z | - | 12,546 | 0 |
TOOKES HANSEL E II | - | 10,000 | 0 |
Bell Michael Alan | - | 0 | 733 |
Curran Martin J | - | 0 | 2,500 |
Bell Michael Alan | - | 0 | 695 |
Bayne John P JR | - | 0 | 6,700 |