10-Q 1 glw20220331_10q.htm FORM 10-Q glw20220331_10q.htm
0000024741 CORNING INC /NY false --12-31 Q1 2022 39 42 14,010 13,969 100 100 10 10 0 0 0.50 0.50 3.8 3.8 1.8 1.8 973 970 0.27 0.24 10,625 0 0 1 5 0 0 1 10 3 21 For the three months ended March 31, 2022 and 2021, amounts are net of tax benefit of $11 million and $10 million, respectively. Japanese yen-denominated option contracts include zero-cost collars, purchased put and call options. With respect to the zero-cost collars, the gross notional amount includes the value of the put and call options. However, due to the nature of the zero-cost collars, only the put or call option can be exercised at maturity. Tax effects are not significant. Income tax (provision) benefit reflects a tax rate of 21%. Other foreign currency option contracts are purchased basket options that include a basket of underlying currencies, including the Japanese yen, South Korean won, Chinese yuan, euro and British pound, and each basket option will be settled against U.S. dollars. 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. Expenses that are not allocated to the segments are included in the reconciliation of reportable segment net income (loss) to consolidated net income. Derivative assets and liabilities mainly consist of foreign exchange contracts which were measured using observable inputs for similar assets and liabilities. At March 31, 2022, derivatives designated as hedging instruments include foreign exchange cash flow hedges with gross notional amounts of $714 million and fair value hedges of leased precious metals with gross notional amounts of 11,417 troy ounces. At December 31, 2021, derivatives designated as hedging instruments include foreign exchange cash flow hedges with gross notional amounts of $780 million and fair value hedges of leased precious metals with gross notional amounts of 7,559 troy ounces. For the years ended December 31, 2021 and 2020, the Preferred Stock was anti-dilutive and therefore excluded from the calculation of diluted earnings per share. This amount primarily represents the impact of foreign currency adjustments in the Display Technologies segment. Depreciation expense for Corning’s reportable segments includes an allocation of depreciation of corporate property not specifically identifiable to a segment. A loss of $14 million was reclassified from accumulated other comprehensive loss into other expense, net, resulting from the de-designation of certain cash flow hedges during the year ended December 31, 2020. All amounts are after tax. Amounts in parentheses indicate debits to accumulated other comprehensive loss. Research, development and engineering expenses include direct project spending that is identifiable to a segment. 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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended March 31, 2022

 

OR

 

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

 

CORNING INCORPORATED

(Exact name of registrant as specified in its charter)

 

 

New York

 

16-0393470

 
 

(State or other jurisdiction of incorporation or organization)

 

(I.R.S. Employer Identification No.)

 
     
 

One Riverfront Plaza, Corning, New York

 

14831

 
 

(Address of principal executive offices)

 

(Zip Code)

 

 

607-974-9000

(Registrant’s telephone number, including area code)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading Symbol(s)

 

Name of each exchange on which registered

Common Stock

 

GLW

 

New York Stock Exchange (NYSE)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.

 

 

Yes

 

No

 

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

 

 

Yes

 

No

 

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large Accelerated Filer

 

Accelerated Filer

 
 

Non-Accelerated Filer

 

Smaller Reporting Company

 
    

Emerging Growth Company

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards pursuant to Section 13(a) of the Exchange Act.

 

 

Yes

 

No

 

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

 

 

Yes

 

No

 

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

 

 

Class

 

Outstanding as of April 22, 2022

 
 

Corning’s Common Stock, $0.50 par value per share

 

844,612,498 shares

 

 

© 2022 Corning Incorporated. All Rights Reserved.

 

 

 

 

 

INDEX

 

PART I – FINANCIAL INFORMATION

 

Page

Item 1. Financial Statements

 
   

Consolidated Statements of Income (Unaudited) for the three months ended March 31, 2022 and 2021

3

   

Consolidated Statements of Comprehensive Income (Unaudited) for the three months ended March 31, 2022 and 2021

4

   

Consolidated Balance Sheets at March 31, 2022 (Unaudited) and December 31, 2021

5

   

Consolidated Statements of Cash Flows (Unaudited) for the three months ended March 31, 2022 and 2021

6

   

Consolidated Statements of Changes to Shareholders’ Equity (Unaudited) for the three months ended March 31, 2022 and 2021

7

   

Notes to Consolidated Financial Statements (Unaudited)

8

   

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

23

   

Item 3. Quantitative and Qualitative Disclosures About Market Risk

40

   

Item 4. Controls and Procedures

40

   

PART II – OTHER INFORMATION

 
   

Item 1. Legal Proceedings

41

   

Item 1A. Risk Factors

41

   

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

42

   

Item 6. Exhibits

43

   

Signatures

44

 

© 2022 Corning Incorporated. All Rights Reserved.

 
 

 

CORNING INCORPORATED AND SUBSIDIARY COMPANIES

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited; in millions, except per share amounts)

 

  

Three months ended

 
  

March 31,

 
  

2022

  

2021

 

Net sales

 $3,680  $3,290 

Cost of sales

  2,397   2,134 
         

Gross margin

  1,283   1,156 
         

Operating expenses:

        

Selling, general and administrative expenses

  434   400 

Research, development and engineering expenses

  248   222 

Amortization of purchased intangibles

  31   32 
         

Operating income

  570   502 
         

Interest income

  3   3 

Interest expense

  (71)  (77)

Translated earnings contract gain, net (Note 10)

  129   272 

Other income, net

  130   125 
         

Income before income taxes

  761   825 

Provision for income taxes (Note 3)

  (180)  (226)
         

Net income attributable to Corning Incorporated

 $581  $599 
         

Earnings per common share available to common shareholders:

        

Basic (Note 4)

 $0.69  $0.75 

Diluted (Note 4)

 $0.68  $0.67 

 

The accompanying notes are an integral part of these consolidated financial statements.

© 2022 Corning Incorporated. All Rights Reserved.

 

 

CORNING INCORPORATED AND SUBSIDIARY COMPANIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited; in millions)

 

   

Three months ended

 
   

March 31,

 
   

2022

   

2021

 

Net income attributable to Corning Incorporated

  $ 581     $ 599  
                 

Foreign currency translation adjustments and other

    (200 )     (363 )

Unamortized losses and prior service costs for postretirement benefit plans

    (1 )      

Net unrealized gains on designated hedges

    14       11  

Other comprehensive loss, net of tax

    (187 )     (352 )
                 

Comprehensive income attributable to Corning Incorporated

  $ 394     $ 247  

 

The accompanying notes are an integral part of these consolidated financial statements.

 

© 2022 Corning Incorporated. All Rights Reserved.

 

 

CORNING INCORPORATED AND SUBSIDIARY COMPANIES

CONSOLIDATED BALANCE SHEETS

(In millions, except share and per share amounts)

 

  

March 31,

  

December 31,

 
  

2022

  

2021

 
  

(unaudited)

     

Assets

        
         

Current assets:

        

Cash and cash equivalents

 $2,016  $2,148 

Trade accounts receivable, net of doubtful accounts - $39 and $42

  1,910   2,004 

Inventories, net (Note 5)

  2,618   2,481 

Other current assets

  1,317   1,026 

Total current assets

  7,861   7,659 
         

Property, plant and equipment, net of accumulated depreciation - $14,010 and $13,969

  15,780   15,804 

Goodwill, net

  2,408   2,421 

Other intangible assets, net

  1,118   1,148 

Deferred income taxes (Note 3)

  1,030   1,066 

Other assets

  2,060   2,056 
         

Total Assets

 $30,257  $30,154 
         

Liabilities and Equity

        
         

Current liabilities:

        

Current portion of long-term debt and short-term borrowings (Note 7)

 $120  $55 

Accounts payable

  1,849   1,612 

Other accrued liabilities (Note 6 and Note 9)

  3,092   3,139 

Total current liabilities

  5,061   4,806 
         

Long-term debt (Note 7)

  6,839   6,989 

Postretirement benefits other than pensions (Note 8)

  620   622 

Other liabilities (Note 6 and Note 9)

  5,108   5,192 

Total liabilities

  17,628   17,609 
         

Commitments and contingencies (Note 9)

          

Shareholders’ equity (Note 12):

        

Preferred stock – Par value $100 per share; Shares authorized 10 million; Shares issued: 0

        

Common stock – Par value $0.50 per share; Shares authorized 3.8 billion;
  Shares issued: 1.8 billion and 1.8 billion

  908   907 

Additional paid-in capital – common stock

  16,531   16,475 

Retained earnings

  16,737   16,389 

Treasury stock, at cost; Shares held: 973 million and 970 million

  (20,419)  (20,263)

Accumulated other comprehensive loss

  (1,362)  (1,175)

Total Corning Incorporated shareholders’ equity

  12,395   12,333 

Non-controlling interests

  234   212 

Total equity

  12,629   12,545 
         

Total Liabilities and Equity

 $30,257  $30,154 

 

The accompanying notes are an integral part of these consolidated financial statements. 

 

© 2022 Corning Incorporated. All Rights Reserved.

 

 

CORNING INCORPORATED AND SUBSIDIARY COMPANIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited; in millions)

 

   

Three months ended

 
   

March 31,

 
   

2022

   

2021

 

Cash Flows from Operating Activities:

               

Net income

  $ 581     $ 599  

Adjustments to reconcile net income to net cash provided by operating activities:

               

Depreciation

    342       330  

Amortization of purchased intangibles

    31       32  

Gain on sale of business

    (53 )     (14 )

Loss on investment

          36  

Share-based compensation expense

    42       34  

Translation gain on Japanese yen-denominated debt

    (84 )     (118 )

Deferred tax provision

    24       121  

Translated earnings contract gain

    (129 )     (272 )

Unrealized translation losses on transactions

    20       59  

Changes in assets and liabilities:

               

Trade accounts receivable

    7       109  

Inventories

    (159 )     44  

Other current assets

    (81 )     (26 )

Accounts payable

    238       (49 )

Other current liabilities

    (161 )     22  

Customer deposits and government incentives

    (9 )     31  

Deferred income

    (25 )     (34 )

Other, net

    (50 )     (181 )

Net cash provided by operating activities

    534       723  
                 

Cash Flows from Investing Activities:

               

Capital expenditures

    (383 )     (289 )

Proceeds from sale of business

    74       24  

Realized gains (losses) on translated earnings contract

    40       (3 )

Other, net

    (9 )     (20 )

Net cash used in investing activities

    (278 )     (288 )
                 

Cash Flows from Financing Activities:

               

Repayments of short-term borrowings

    (11 )     (25 )

Proceeds from exercise of stock options

    18       51  

Purchases of common stock for treasury

    (149 )      

Dividends paid

    (228 )     (208 )

Other, net

    (5 )     (8 )

Net cash used in financing activities

    (375 )     (190 )

Effect of exchange rates on cash

    (13 )     (49 )

Net (decrease) increase in cash and cash equivalents

    (132 )     196  

Cash and cash equivalents at beginning of period

    2,148       2,672  

Cash and cash equivalents at end of period

  $ 2,016     $ 2,868  

 

The accompanying notes are an integral part of these consolidated financial statements. 

 

© 2022 Corning Incorporated. All Rights Reserved.

 

 

CORNING INCORPORATED AND SUBSIDIARY COMPANIES

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY

(Unaudited; in millions)

 

(In millions)

 

Common stock

  

Additional paid-in capital common

  

Retained earnings

  

Treasury stock

  

Accumulated other comprehensive loss

  

Total Corning Incorporated shareholders' equity

  

Non-controlling interests

  

Total

 

Balance, December 31, 2021

 $907  $16,475  $16,389  $(20,263) $(1,175) $12,333  $212  $12,545 

Net income

          581           581   22   603 

Other comprehensive loss

                  (187)  (187)      (187)

Purchase of common stock for treasury

              (151)      (151)      (151)

Shares issued to benefit plans and for
option exercises

  1   56               57       57 

Common dividends ($0.27 per share)

          (233)          (233)      (233)

Other, net

              (5)      (5)      (5)

Balance, March 31, 2022

 $908  $16,531  $16,737  $(20,419) $(1,362) $12,395  $234  $12,629 

 

(In millions)

 

Convertible preferred stock

  

Common stock

  

Additional paid-in capital common

  

Retained earnings

  

Treasury stock

  

Accumulated other comprehensive loss

  

Total Corning Incorporated shareholders' equity

  

Non-controlling interests

  

Total

 

Balance, December 31, 2020

 $2,300  $863  $14,642  $16,120  $(19,928) $(740) $13,257  $191  $13,448 

Net income

              599           599   2   601 

Other comprehensive loss

                      (352)  (352)  (1)  (353)

Shares issued to benefit plans and for
option exercises

      1   80               81       81 

Common dividends ($0.24 per share)

              (187)          (187)      (187)

Preferred dividends ($10,625 per share)

              (24)          (24)      (24)

Other, net

              1   (6)      (5)  (3)  (8)

Balance, March 31, 2021

 $2,300  $864  $14,722  $16,509  $(19,934) $(1,092) $13,369  $189  $13,558 

 

The accompanying notes are an integral part of these consolidated financial statements. 

 

© 2022 Corning Incorporated. All Rights Reserved.

 

CORNING INCORPORATED AND SUBSIDIARY COMPANIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

 

1. Significant Accounting Policies

 

Basis of Presentation

 

In these notes, the terms “Corning,” “Company,” “we,” “us,” or “our” mean Corning Incorporated and its subsidiary companies.

 

The accompanying unaudited consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”) for interim financial information. Certain information and note disclosures normally included in financial statements prepared in accordance with GAAP have been omitted or condensed. These interim consolidated financial statements should be read in conjunction with Corning’s consolidated financial statements and notes thereto included in its Annual Report on Form 10-K for the year ended December 31, 2021 (“2021 Form 10-K”).

 

The unaudited consolidated financial statements reflect all adjustments which, in the opinion of management, are necessary for a fair statement of the results of operations, financial position and cash flows for the interim periods presented. All such adjustments are of a normal recurring nature. The results for interim periods are not necessarily indicative of results which may be expected for any other interim period or for the full year.

 

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses and the disclosure of contingent assets and liabilities. 

 

Certain prior year amounts have been reclassified to conform to the current-year presentation. These reclassifications had no impact on the results of operations, financial position, or changes in shareholders’ equity.

 

New Accounting Standards

 

In November 2021, the FASB issued Accounting Standards Update ("ASU") 2021-10 Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance, effective for financial statements issued for annual periods beginning after December 15, 2021.  ASU 2021-10 requires business entities to disclose information in the notes to the financial statements about certain types of government assistance.  The annual disclosure requirements apply to transactions with a government that are accounted for by analogizing to either a grant model or a contribution model.  We plan to adopt ASU 2020-10 when we issue our annual financial statements.  We do not expect it to have a material impact on our consolidated financial statements.

 

Other Accounting Standards


No other accounting standards, newly issued or adopted as of March 31, 2022, had a material impact on Corning’s financial statements or disclosures.

 

© 2022 Corning Incorporated. All Rights Reserved.

 

 

2. Revenue

 

Revenue Disaggregation Table

 

The following table shows revenues by major product categories, similar to the Company’s reportable segment disclosure. Within each product category, contract terms, conditions and economic factors affecting the nature, amount, timing and uncertainty of revenue recognition and cash flows are substantially similar. Commercial markets and selling channels are also similar. Except for an inconsequential amount of revenue for Telecommunications products, product category revenues are recognized at point in time when control transfers to the customer.

 

Revenues by product category are as follows (in millions):

 

  

Three months ended

 
  

March 31,

 
  

2022

  

2021

 
         

Telecommunication products

 $1,198  $937 
         

Display products

  906   888 
         

Specialty glass products

  493   451 
         

Environmental substrate and filter products

  401   442 
         

Life science products

  307   301 
         

Polycrystalline silicon and all other products

  375   271 

Total revenue

 $3,680  $3,290 

Impact of foreign currency movements (1)

  64   (27)

Net sales of reportable segments and Hemlock and Emerging Growth Businesses

 $3,744  $3,263 

 

(1)This amount primarily represents the impact of foreign currency adjustments in the Display Technologies segment.

 

Refer to Note 14 (Reportable Segments) to the consolidated financial statements for additional information.

 

Contract Assets and Liabilities

 

Contract assets, such as incremental costs to obtain or fulfill contracts, are an insignificant component of Corning’s revenue recognition process. Most of Corning’s fulfillment costs as a manufacturer of products are classified as inventory, fixed assets and intangible assets, which are accounted for under the respective guidance for those asset types. Other contract fulfillment costs are immaterial due to the nature of the products and their respective manufacturing processes.

 

Contract liabilities include deferred revenue, other advance payments and customer deposits. Other advance payments are not significant to operations and are classified as part of other accrued liabilities in the consolidated financial statements. Customer deposits are predominately related to Display products and deferred revenue is predominately related to obtaining a controlling interest in Hemlock Semiconductor Group ("Hemlock").

 

© 2022 Corning Incorporated. All Rights Reserved.

 

Customer Deposits

 

As of March 31, 2022 and December 31, 2021, Corning had customer deposits of approximately $1.2 billion and $1.3 billion, respectively.  Most of these customer deposits were non-refundable and allowed customers to secure rights to products produced by Corning under long-term supply agreements.  The duration of these long-term supply agreements ranges up to 10 years.  As products are shipped to customers, Corning will recognize revenue and reduce the amount of the customer deposit liability.

 

Customer deposits used were $83 million and $93 million, respectively, in the three months ended March 31, 2022 and 2021.  As of March 31, 2022 and December 31, 2021, $1.0 billion and $1.1 billion, respectively, were recorded as other long-term liabilities.  The remaining $236 million and $223 million, respectively, were classified as other current liabilities. 

 

Deferred Revenue

 

As of March 31, 2022 and December 31, 2021, Corning had deferred revenue of approximately $887 million and $912 million, respectively.  The deferred revenue was related to the performance obligations of non-refundable consideration previously received by Hemlock from its customers under long-term supply agreements.

 

The deferred revenue is tracked on a per-customer contract-unit basis. As customers take delivery of the committed volumes under the terms of the contract, a per-unit amount of deferred revenue is recognized when control of the promised goods is transferred to the customer based upon the units shipped.

 

As of March 31, 2022 and December 31, 2021, $751 million and $764 million, respectively, were classified as long-term liabilities and $136 million and $148 million, respectively, were classified as current liabilities.  

 

 

3. Income Taxes

 

The provision for income taxes and the related effective income tax rates are as follows (in millions):

 

  

Three months ended

 
  

March 31,

 
  

2022

  

2021

 

Provision for income taxes

 $(180) $(226)

Effective tax rate

  23.7%  27.4%

 

For the three months ended March 31, 2022, the effective income tax rate differed from the United States (“U.S.”) statutory rate of 21%, primarily due to changes in tax reserves and the impact of changes in tax legislation, partially offset by differences arising from foreign earnings.  For the three months ended March 31, 2021, the effective income tax rate differed from the U.S. statutory rate of 21%, primarily due to adjustments to our permanently reinvested foreign income position and tax reform items.

 

Corning Precision Materials is currently appealing certain tax assessments and tax refund claims in South Korea for tax years 2010 through 2018. The Company was required to deposit the disputed amounts with the South Korean government as a condition of its appeal of any tax assessments. Corning believes that it is more likely than not the Company will prevail in the appeals process.  As of March 31, 2022 and December 31, 2021, non-current receivables of $354 million and $350 million, respectively, were recorded related to these appeals.

 

© 2022 Corning Incorporated. All Rights Reserved.

 

 

4. Earnings per Common Share

 

The following table sets forth the computation of basic and diluted earnings per common share (in millions, except per share amounts):

 

  

Three months ended

 
  

March 31,

 
  

2022

  

2021

 

Net income attributable to Corning Incorporated

 $581  $599 

Less: Series A convertible preferred stock dividend

      24 

Net income available to common shareholders – basic

  581   575 

Plus: Series A convertible preferred stock dividend

      24 

Net income available to common shareholders – diluted

 $581  $599 
         

Weighted-average common shares outstanding – basic

  843   766 

Effect of dilutive securities:

        

Employee stock options and other dilutive securities

  16   17 

Series A convertible preferred stock

      115 

Weighted-average common shares outstanding – diluted

  859   898 

Basic earnings per common share

 $0.69  $0.75 

Diluted earnings per common share

 $0.68  $0.67 
         

Anti-dilutive potential shares excluded from diluted earnings per common share:

        

Employee stock options and awards

     1 

Total

     1 

 

 

5. Inventories, Net

 

Inventories, net comprise the following (in millions):

 

  

March 31,

  

December 31,

 
  

2022

  

2021

 

Finished goods

 $1,216  $1,190 

Work in process

  383   358 

Raw materials and accessories

  485   427 

Supplies and packing materials

  534   506 

Total inventories, net

 $2,618  $2,481 

 

© 2022 Corning Incorporated. All Rights Reserved.

 

 

6. Other Liabilities

 

Other liabilities follow (in millions):

 

  

March 31,

  

December 31,

 
  

2022

  

2021

 

Current liabilities:

        

Wages and employee benefits

 $488  $824 

Income taxes

  238   196 

Derivative instruments (Note 10)

  276   144 

Deferred revenue (Note 2)

  136   148 

Customer deposits (Note 2)

  236   223 

Share repurchase liability (Note 12)

  507   506 

Short-term operating leases

  93   94 

Other current liabilities

  1,118   1,004 

Other accrued liabilities

 $3,092  $3,139 
         

Non-current liabilities:

        

Defined benefit pension plan liabilities

 $696  $707 

Derivative instruments (Note 10)

  85   49 

Deferred revenue (Note 2)

  751   764 

Customer deposits (Note 2)

  985   1,072 

Share repurchase liability (Note 12)

  518   517 

Deferred tax liabilities

  248   258 

Long-term operating leases

  676   691 

Other non-current liabilities

  1,149   1,134 

Other liabilities

 $5,108  $5,192 

 

 

7. Debt

 

Based on borrowing rates currently available to us for loans with similar terms and maturities, the fair value of long-term debt was $7.3 billion and $8.3 billion at March 31, 2022 and December 31, 2021, respectively, compared to recorded book values of $6.8 billion and $7.0 billion at March 31, 2022 and December 31, 2021, respectively. The Company measures the fair value of its long-term debt using Level 2 inputs based primarily on current market yields for its existing debt traded in the secondary market.

 

Corning had no outstanding commercial paper as of  March 31, 2022 and December 31, 2021.

 

© 2022 Corning Incorporated. All Rights Reserved.

 

 

8. Employee Retirement Plans

 

Corning has defined benefit pension plans covering certain domestic and international employees. The Company’s funding policy is to contribute, over time, an amount exceeding the minimum requirements to achieve the Company’s long-term funding targets. During 2022, the Company expects to make cash contributions of $30 million to international pension plans.

 

The following table summarizes the components of net periodic benefit expense for Corning’s defined benefit pension and postretirement health care and life insurance plans (in millions):

 

  

Pension benefits

  

Postretirement benefits

 
  

Three months ended

  

Three months ended

 
  

March 31,

  

March 31,

 
  

2022

  

2021

  

2022

  

2021

 

Service cost

 $32  $32  $2  $2 

Interest cost

  27   22   4   4 

Expected return on plan assets

  (55)  (54)      

Amortization of prior service cost (credit)

  1   1   (1)  (1)

Total pension and postretirement benefit expense

 $5  $1  $5  $5 

 

The components of net periodic benefit expense, other than the service cost component, are included in the line item other income, net, in the consolidated statements of income.

 

 

9. Commitments and Contingencies

 

Corning is a defendant in various lawsuits and is subject to various claims that arise in the normal course of business, the most significant of which are summarized below. In the opinion of management, the likelihood that the ultimate disposition of these matters will have a material adverse effect on Corning’s consolidated financial position, liquidity, or results of operations, is remote.

 

Dow Corning Chapter 11 Related Matters

 

Until June 1, 2016, Corning and Dow each owned 50% of the common stock of Dow Corning. On May 31, 2016, Corning and Dow realigned their ownership interest in Dow Corning. Following the realignment, Corning no longer owned any interest in Dow Corning. With the realignment, Corning agreed to indemnify Dow Corning for 50% of Dow Corning’s non-ordinary course, pre-closing liabilities to the extent such liabilities exceed the amounts reserved for them by Dow Corning as of May 31, 2016, subject to certain conditions and limits.

 

Dow Corning Breast Implant Litigation

 

In May 1995, Dow Corning filed for bankruptcy protection to address pending and claimed liabilities arising from many thousands of breast implant product lawsuits. On June 1, 2004, Dow Corning emerged from Chapter 11 with a Plan of Reorganization (the “Plan”) which provided for the settlement or other resolution of implant claims. The Plan includes releases for Corning and Dow as shareholders in exchange for contributions to the Plan.

 

Under the terms of the Plan, Dow Corning has established and funded a Settlement Trust and a Litigation Facility, to provide a means for tort claimants to settle or litigate their claims. Inclusive of insurance, Dow Corning has paid approximately $1.8 billion to the Settlement Trust. As of May 31, 2016, Dow Corning had recorded a reserve for breast implant litigation of $290 million. In the event Dow Corning’s total liability for these claims exceeds such amount, Corning may be required to indemnify Dow for up to 50% of the excess liability, subject to certain conditions and limits. As of  March 31, 2022 and December 31, 2021, Dow Corning had recorded a reserve for breast implant litigation of $127 million and $130 million, respectively. As a result, Corning does not believe its indemnity obligation for Dow Corning’s breast implant litigation liability, if any, will be material.

 

© 2022 Corning Incorporated. All Rights Reserved.

 

Dow Corning Bankruptcy Pendency Interest Claims

   

As a separate matter arising from the bankruptcy proceedings, Dow Corning had been defending claims asserted by commercial creditors who claimed additional compounded interest at default and state statutory judgment rates as well as attorneys’ fees and other enforcement costs, during the period from May 1995 through June 2004. As of May 31, 2016, Dow Corning had recorded a reserve for these claims of $107 million. Dow Corning settled those claims as of September 30, 2019 and received approval of the settlement from the bankruptcy court. Corning does not believe its indemnity obligation, if any, for Dow Corning’s liability to be material.

 

Dow Corning Environmental Claims

 

In September 2019, Dow formally notified Corning of certain environmental matters for which Dow asserts that it has, or will, experience losses arising from remediation and response at a number of sites.  In the event Dow is liable for these claims, Corning may be required to indemnify Dow for up to 50% of that liability, subject to certain conditions and limits.  As of March 31, 2022, Corning has determined a potential liability for these environmental matters is probable and the amount reserved was not material.

 

Environmental Litigation

 

Corning has been named by the Environmental Protection Agency (the Agency) under the Superfund Act, or by state governments under similar state laws, as a potentially responsible party for 15 active hazardous waste sites.  Under the Superfund Act, all parties who may have contributed any waste to a hazardous waste site, identified by the Agency, are jointly and severally liable for the cost of cleanup unless the Agency agrees otherwise.  It is Corning’s policy to accrue for its estimated liability related to Superfund sites and other environmental liabilities related to property owned by Corning based on expert analysis and continual monitoring by both internal and external consultants.  As of  March 31, 2022 and December 31, 2021, Corning had accrued approximately $50 million and $55 million, respectively, for the estimated undiscounted liability for environmental cleanup and related litigation. Based upon the information developed to date, management believes that the accrued reserve is a reasonable estimate of the Company’s liability and that the risk of an additional loss in an amount materially higher than that accrued is remote.

 

 

10. Hedging Activities

 

Designated Hedges 

 

Corning uses over-the-counter (“OTC”) foreign exchange forward contracts as cash flow hedges to reduce the risk that movements in exchange rates will adversely affect the net cash flows resulting from the sale of products to customers and purchases from suppliers. The total gross notional values for foreign currency cash flow hedges are $714 million and $780 million at March 31, 2022 and December 31, 2021, respectively, with maturities spanning the years 2022 through 2023. Corning defers gains and losses related to the cash flow hedges into accumulated other comprehensive loss on the consolidated balance sheets until the hedged item impacts earnings. At March 31, 2022, the amount expected to be reclassified into earnings within the next 12 months is a pre-tax gain of $53 million.

 

Corning has entered into leases of precious metals with maturities through 2025. To offset the risk of changes in the fair value of the Company's separate accounting pool of leased precious metals due to adverse changes in the respective market prices, Corning designated the bifurcated embedded derivatives included in these leases as fair value hedges. The gain or loss on the derivatives, as well as the offsetting loss or gain on the hedged item attributable to the hedged risk, are recognized in current earnings. The amounts representing the time value component of the derivatives are excluded from the assessment of effectiveness and amortized in earnings. The impact of the excluded component on Corning's other comprehensive income and earnings is not material. The carrying amount of the leased precious metals pool, which is included in the property, plant and equipment, net of accumulated depreciation line of the consolidated balance sheets is $223 million and $107 million at March 31, 2022 and December 31, 2021, respectively. 

 

© 2022 Corning Incorporated. All Rights Reserved.

 

Undesignated Hedges

 

Corning uses OTC foreign exchange forward and option contracts not designated as hedging instruments for accounting purposes to offset economic currency risks. The undesignated hedges limit exposure to foreign functional currency fluctuations related to certain subsidiaries’ monetary assets, monetary liabilities and net earnings in foreign currencies. 

 

A significant portion of the Company's non-U.S. revenue and expenses are denominated in Japanese yen, South Korean won, new Taiwan dollar, Chinese yuan, and euro. When this revenue and these expenses are translated back to U.S. dollars, the Company is exposed to foreign exchange rate movements. To protect translated earnings against movements in these currencies, the Company has entered into a series of average rate forwards and option contracts. Most of these contracts hedge a significant portion of the Company’s exposure to the Japanese yen with maturities spanning years 2022 through 2024.  

 

The following table summarizes the total gross notional value for translated earnings contracts at March 31, 2022 and December 31, 2021 (in billions):

 

  

March 31,

  

December 31,

 
  

2022

  

2021

 

Average rate forward contracts:

        

Japanese yen-denominated

 $2.4  $2.9 

South Korean won-denominated

  1.6   1.2 

Euro-denominated

  0.1   0.2 

Other foreign currencies (1)

  0.1   0.1 

Option contracts:

        

Japanese yen-denominated (2)

  4.9   3.6 

Other foreign currencies (3)

  0.3   0.9 

Total gross notional value for translated earning contracts

 $9.4  $8.9 

 

(1)Denominational currencies for average rate forward contracts include the Chinese yuan and British pound.

(2)

Japanese yen-denominated option contracts include zero-cost collars, purchased put and call options. With respect to the zero-cost collars, the gross notional amount includes the value of the put and call options. However, due to the nature of the zero-cost collars, only the put or call option can be exercised at maturity.

(3)

Other foreign currency option contracts are purchased basket options that include a basket of underlying currencies, including the Japanese yen, South Korean won, euro and British pound, and each basket option will be settled against U.S. dollars.


The following table summarizes the notional amounts and respective fair values of Corning’s derivative financial instruments on a gross basis for March 31, 2022 and December 31, 2021 (in millions):

 

         

Asset derivatives

 

Liability derivatives

 
  

Notional amount

 

Balance

 

Fair value

 

Balance

 

Fair value

 
  

March

  

December

 

sheet

 

March

  

December

 

sheet

 

March

  

December

 
  

31, 2022

  

31, 2021

 

location

 

31, 2022

  

31, 2021

 

location

 

31, 2022

  

31, 2021

 
                           

Derivatives designated as hedging
instruments (1)

                          
                           

Foreign exchange contracts and other

 $714  $780 

Other current assets

 $55  $49 

Other accrued liabilities

 $(2) $(2)
         

Other assets

  19   10 

Other liabilities

  (44)  (9)
                           

Derivatives not designated as hedging
instruments

                          
                           

Foreign exchange contracts

  3,842   3,864 

Other current assets

  155   91 

Other accrued liabilities

  (133)  (95)

Translated earnings contracts

  9,396   8,899 

Other current assets

  358   196 

Other accrued liabilities

  (141)  (47)
         

Other assets

  180   154 

Other liabilities

  (41)  (40)

Total derivatives

 $13,952  $13,543   $767  $500   $(361) $(193)

 

(1)

At March 31, 2022, derivatives designated as hedging instruments include foreign exchange cash flow hedges with gross notional amounts of $714 million and fair value hedges of leased precious metals with gross notional amounts of 11,417 troy ounces.  At December 31, 2021, derivatives designated as hedging instruments include foreign exchange cash flow hedges with gross notional amounts of $780 million and fair value hedges of leased precious metals with gross notional amounts of 7,559 troy ounces. 

 

© 2022 Corning Incorporated.

All Rights Reserved.

 

The following tables summarize the effect of Corning’s derivative financial instruments on the consolidated financial statements (in millions):

 

  

Three months ended March 31,

 
  Gain recognized 

Location of gain (loss)

 Gain reclassified 

Derivatives in hedging

 

in other comprehensive

 

reclassified from accumulated

 

from accumulated

 

relationships for cash

 

income (OCI)

 

OCI into income

 

OCI into income

 

flow and fair value hedges

 

2022

  

2021

 

effective (ineffective)

 

2022

  

2021

 
                  
         

Net sales

 $10  $2 

Foreign exchange contracts
and other

 $34  $26 

Cost of sales

  7   7 

Total cash flow and fair
value hedges

 $34  $26   $17  $9 
                  

 

   

Gain recognized in income

 
   

Three months ended

 
 

Location of gain

 

March 31,

 

Undesignated derivatives

recognized in income

 

2022

  

2021

 
          

Foreign exchange contracts

Other income, net

 $26  $44 

Translated earnings contracts

Translated earnings contract gain, net

  129   272 
          

Total undesignated

 $155  $316 

 

 

11. Fair Value Measurements

 

Fair value standards under GAAP define fair value, establish a framework for measuring fair value in applying generally accepted accounting principles, and require disclosures about fair value measurements. The standards identify two kinds of inputs that are used to determine the fair value of assets and liabilities: observable and unobservable. Observable inputs are based on market data or independent sources, while unobservable inputs are based on the Company’s own market assumptions. Once inputs have been characterized, the inputs are prioritized into one of three broad levels (provided in the table below) used to measure fair value. Fair value standards apply whenever an entity is measuring fair value under other accounting pronouncements that require or permit fair value measurement and require the use of observable market data when available.

 

The following tables provide fair value measurement information for the Company’s major categories of financial assets and liabilities measured on a recurring basis; Level 1 ("L1"), quoted market prices in active markets for identical assets, Level 2 ("L2"), significant other observable inputs, and Level 3 ("L3"), significant unobservable inputs as of our reportable dates (in millions):

 

  

March 31,
2022

  

L1

  

L2

  

L3

  

December 31,
2021

  

L1

  

L2

  

L3

 

Current assets:

                                

Other current assets (1)

 $622  $11  $568  $43  $352  $10  $336  $6 

Non-current assets:

                                

Other assets (1)

 $199      $199      $175      $164  $11 

Current liabilities:

                                

Other accrued liabilities (1)

 $276      $276      $144      $144     

Non-current liabilities:

                                

Other liabilities (1)

 $102      $102      $66      $66     

 

(1)Derivative assets and liabilities mainly consist of foreign exchange contracts which were measured using observable inputs for similar assets and liabilities.

 

© 2022 Corning Incorporated. All Rights Reserved.

 

Assets and Liabilities Measured on a Non-Recurring Basis

 

There were no significant financial assets and liabilities measured on a non-recurring basis as of March 31, 2022 and December 31, 2021.

 

 

12. Shareholders Equity

 

Fixed Rate Cumulative Convertible Preferred Stock, Series A 

 

On January 16, 2021, the Preferred Stock became convertible into 115 million Common Shares.  On April 5, 2021 (“Initial Closing Date”), Corning and Samsung Display Co., Ltd. ("SDC") executed the Share Repurchase Agreement (“SRA”) and the Preferred Stock was fully converted as of April 8, 2021. 

 

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

 

The remaining 80 million Common Shares were accounted for as a conversion of Preferred Stock and resulted in an increase of common stock and additional paid-in-capital based on the carrying value of the Preferred Stock and were included in the weighted-average common shares outstanding for the calculation of the Company’s basic and diluted earnings per share.  SDC has the option to sell 22 million common shares to Corning subject to certain conditions beginning in 2024-2027. The remaining 58 million common shares are subject to a seven-year lock-up period expiring in 2027.   

 

Share Repurchases

 

On July 17, 2019, Corning’s Board of Directors authorized $5 billion in share repurchases with no expiration date (the “2019 Repurchase Program”).

 

For the three months ended March 31, 2022, the Company repurchased 3.9 million shares of common stock on the open market for approximately $151 million as part of its 2019 Repurchase Program.

 

The Company made no open market share repurchases for the three months ended March 31, 2021

 

© 2022 Corning Incorporated. All Rights Reserved.

 

Accumulated Other Comprehensive Loss

 

In the three months ended March 31, 2022 and 2021, the change in accumulated other comprehensive loss was primarily related to the foreign currency translation adjustment.

 

A summary of changes in the foreign currency translation adjustment component of accumulated other comprehensive loss is as follows (in millions) (1):

 

  

Three months ended

 
  

March 31,

 
  

2022

  

2021

 

Beginning balance

 $(933) $(329)
         

Losses on foreign currency translation (2)

  (198)  (355)

Equity method affiliates (3)

  (2)  (8)

Net current-period other comprehensive loss

  (200)  (363)

Ending balance

 $(1,133) $(692)

 

(1)

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

(2)

For the three months ended March 31, 2022 and 2021, amounts are net of tax benefit of $11 million and $10 million, respectively.  

(3)

Tax effects are not significant.

 

 

13. Share-Based Compensation

 

Corning maintains long-term incentive plans (the “Plans”) for key employees and non-employee members of its Board of Directors. The Plans allow Corning to grant equity-based compensation awards, including stock options, stock appreciation rights, performance share units, restricted stock units, restricted stock awards or a combination of awards (collectively, share-based awards). At March 31, 2022, there were approximately 39 million unissued common shares available for future grants authorized under the Plans.

 

Share-based compensation cost is allocated to the cost of sales, selling, general and administrative, and research, development and engineering, expenses lines in the consolidated statements of income.

 

The Company measures and recognizes compensation cost for all share-based payment awards made to employees and directors based on estimated fair values.

 

Total share-based compensation cost was $42 million and $34 million, respectively, for the three months ended March 31, 2022 and 2021. The income tax benefit realized from share-based compensation was $4 million for the three months ended March 31, 2022, and not significant during the same period in 2021.

 

Stock Options

 

Corning’s stock option plans provide non-qualified and incentive stock options to purchase authorized but unissued common shares, or treasury shares, at the market price on the grant date and generally become exercisable in installments from one year to five years from the grant date. The maximum term of non-qualified and incentive stock options is 10 years from the grant date. An award is considered vested when the employee’s retention of the award is no longer contingent on providing subsequent service (the “non-substantive vesting period approach”).

 

© 2022 Corning Incorporated. All Rights Reserved.

 

The following table summarizes information regarding stock options outstanding, including the related transactions under the stock option plans, for the three months ended March 31, 2022:

 

          

Weighted-

     
          

average

     
      

Weighted-

  

remaining

  

Aggregate

 
  

Number

  

average

  

contractual

  

intrinsic

 
  

of shares

  

exercise

  

term

  

value

 
  

(in thousands)

  

price

  

(in years)

  

(in thousands)

 

Options outstanding as of December 31, 2021

  11,904  $22.31         

Exercised

  (941)  18.60         

Forfeited and expired

  (109)  17.82         

Options outstanding as of March 31, 2022

  10,854   22.68   6.60  $154,501 

Options expected to vest as of March 31, 2022

  10,802   22.69   6.60   153,600 

Options exercisable as of March 31, 2022

  5,594   21.68   5.50   85,179 

 

Corning uses a multiple-point Black-Scholes valuation model to estimate the fair value of stock option grants. Corning utilizes a blended approach for calculating the volatility assumption used in the multiple-point Black-Scholes valuation model defined as the weighted average of the short-term implied volatility, the most recent volatility for the period equal to the expected term, and the most recent 15-year historical volatility. The expected term is the period the options are expected to be outstanding and is calculated using a combination of historical exercise experience adjusted to reflect the current vesting period of options being valued, and partial life cycles of outstanding options. The risk-free rates used in the multiple-point Black-Scholes valuation model are the implied rates for a zero-coupon U.S. Treasury bond with a term equal to the option’s expected term. Ranges used reflect results from separate groups of employees exhibiting different exercise behavior.

 

There have been no stock options granted for the three months ended March 31, 2022 or 2021. 

 

Incentive Stock Plans

 

The Corning Incentive Stock Plans permit restricted stock and restricted stock unit grants, either determined by specific performance goals or issued directly, in most instances, subject to the possibility of forfeiture and without cash consideration. Restricted stock and restricted stock units under the Incentive Stock Plans are granted at the closing market price on the grant date, contingently vest over a period of generally one year to ten years, and is aligned to the contractual terms. The fair value is based on the grant date closing price of the Company’s stock.

 

Time-Based Restricted Stock and Restricted Stock Units

 

Time-based restricted stock and restricted stock units are issued by the Company on a discretionary basis, and are payable in shares of the Company’s common stock upon vesting. The fair value is based on the closing market price of the Company’s stock on the grant date. Compensation cost is recognized over the requisite vesting period and adjusted for actual forfeitures before vesting.

 

The following table summarizes the Company’s non-vested time-based restricted stock and restricted stock units and changes which occurred during the  three months ended March 31, 2022:

 

      

Weighted

 
  

Number

  

average

 
  

of shares

  

grant-date

 
  

(in thousands)

  

fair value

 

Non-vested shares and share units at December 31, 2021

  10,594  $25.83 

Granted

  117   42.48 

Vested

  (180)  30.99 

Forfeited

  (71)  22.47 

Non-vested shares and share units at March 31, 2022

  10,460  $25.95 

 

© 2022 Corning Incorporated. All Rights Reserved.

 

Performance-Based Restricted Stock Units

 

Performance-based restricted stock units are earned upon the achievement of certain targets, and are payable in shares of the Company’s common stock upon vesting, typically over a three year period. The fair value is based on the closing market price of the Company’s stock on the grant date and assumes that the target payout level will be achieved. Compensation cost is recognized over the requisite vesting period and adjusted for actual forfeitures before vesting. During the performance period, compensation cost may be adjusted based on changes in the expected outcome of the performance-related target.

 

The following table summarizes the Company’s non-vested performance-based restricted stock units and changes which occurred during the three months ended March 31, 2022:

 

      

Weighted

 
  

Number

  

average

 
  

of shares

  

grant-date

 
  

(in thousands)

  

fair value

 

Non-vested share units at December 31, 2021

  3,684  $34.17 

Granted

  1,215   42.74 

Vested

  (48)  38.72 

Performance adjustments

  367   34.46 

Forfeited

  (27)  41.26 

Non-vested share units at March 31, 2022

  5,191  $36.11 

 

 

14. Reportable Segments

 

The Company’s reportable segments are as follows:

 

Optical Communications – manufactures carrier network and enterprise network components for the telecommunications industry.
Display Technologies – manufactures glass substrates for flat panel liquid crystal displays and other high-performance display panels.
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.
Environmental Technologies – manufactures ceramic substrates and filters for automotive and diesel applications.
Life Sciences – manufactures glass and plastic labware, equipment, media, serum and reagents enabling workflow solutions for drug discovery and bioproduction.

 

All other businesses that do not meet the quantitative threshold for separate reporting have been grouped as “Hemlock and Emerging Growth Businesses”.  The net sales for this group are primarily attributable to Hemlock, which is an operating segment that produces solar and semiconductor products.  The emerging growth businesses primarily consist of Pharmaceutical Technologies (“CPT”), Auto Glass Solutions (“AGS”) and the Emerging Innovations Group (“EIG”), which are also operating segments.  

 

Financial results for the reportable segments are prepared on a basis consistent with the internal disaggregation of financial information to assist the chief operating decision maker (“CODM”) in making internal operating decisions. A significant portion of segment revenues and expenses are denominated in currencies other than the U.S. dollar. Management believes it is important to understand the impact on core net income of translating these currencies into U.S. dollars.  The Company uses constant currency reporting for Display Technologies, Specialty Materials, Environmental Technologies and Life Sciences.  Corning excludes the impact of these currencies from segment sales and net income.  The adjustment for constant currency is primarily related to the Display Technologies’ segment and excludes the impact of the fluctuation of the Japanese yen, South Korean won, Chinese yuan, and new Taiwan dollar.   Certain income and expenses are included in the unallocated amounts in the reconciliation of reportable segment net income (loss) to consolidated net income. These include items that are not used by the CODM in evaluating the results of, or in allocating resources to, the segments and include the following:  the impact of translated earnings contracts; acquisition-related costs; discrete tax items and other tax-related adjustments; certain litigation, regulatory and other legal matters; restructuring, impairment losses and other charges and credits; and other non-recurring non-operational items. Although these amounts are excluded from segment results, they are included in reported consolidated results.

 

© 2022 Corning Incorporated. All Rights Reserved.

 

Earnings of equity affiliates that are closely associated with the reportable segments are included in the respective segment’s net income (loss). Certain common expenses among reportable segments have been allocated differently than they would be for stand-alone financial information. Segment net income (loss) may not be consistent with measures used by other companies.

 

Reportable Segments and Hemlock and Emerging Growth Businesses (in millions):

 

                 Hemlock and    
                 

Emerging

    
  

Optical

  

Display

  

Specialty

  

Environmental

  

Life

  

Growth

     
  

Communications

  

Technologies

  

Materials

  

Technologies

  

Sciences

  

Businesses

  

Total

 

Three months ended

                            

March 31, 2022

                            

Segment net sales

 $1,198  $959  $493  $409  $310  $375  $3,744 

Depreciation (1)

 $59  $156  $40  $33  $14  $38  $340 

Research, development and
  engineering expenses (2)

 $55  $31  $53  $25  $9  $40  $213 

Income tax provision (3)

 $(45) $(63) $(20) $(20) $(11) $(1) $(160)

Segment net income (loss) (4)

 $166  $236  $75  $74  $42  $(8) $585 

 

                      

Hemlock and

     
                      

Emerging

     
  

Optical

  

Display

  

Specialty

  

Environmental

  

Life

  

Growth

     
  

Communications

  

Technologies

  

Materials

  

Technologies

  

Sciences

  

Businesses

  

Total

 

Three months ended

                            

March 31, 2021

                            

Segment net sales

 $937  $863  $451  $441  $300  $271  $3,263 

Depreciation (1)

 $58  $148  $41  $36  $12  $32  $327 

Research, development and
  engineering expenses (2)

 $51  $22  $