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What changed in Corning Inc.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Corning Inc.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+246 added−274 removedSource: 10-K (2024-02-12) vs 10-K (2023-02-13)

Top changes in Corning Inc.'s 2023 10-K

246 paragraphs added · 274 removed · 199 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

61 edited+11 added−16 removed61 unchanged
Biggest changeHSG operates in the solar power market, as polysilicon is needed in the manufacturing process to produce sustainable solar power cell, panels and arrays, and the electronics markets, as polysilicon is used to create fabricated wafers and integrated circuit chips used by leading semiconductor manufacturers. 5 Table of Contents Hemlock and Emerging Growth Businesses also includes our pharmaceutical technologies business, which produces high-quality pharmaceutical glass tubing and vials to meet the rigorous needs of the pharmaceutical industry; our automotive glass solutions business, which enhances vehicle exteriors and interiors with innovations that enable lightweight, damage-resistant windows and displays; as well as other businesses and certain corporate investments.
Biggest changeHemlock and Emerging Growth Businesses also includes our pharmaceutical technologies business, which produces high-quality pharmaceutical glass tubing and vials to meet the rigorous needs of the pharmaceutical industry; our automotive glass solutions business, which enhances vehicle exteriors and interiors with innovations that enable lightweight, damage-resistant windows and displays; as well as other businesses and certain corporate investments.
Competition We compete with many large and varied manufacturers, both domestic and foreign. Some of these competitors are larger than us, and some have broader product lines. We strive to maintain and improve our market position through technology and product innovation.
Competition We compete with many large and varied manufacturers, both domestic and foreign. Some of these competitors are larger than we are, and some have broader product lines. We strive to maintain and improve our market position through technology and product innovation.
Human Capital Management Overview At Corning, we are proud of the life-changing innovations we bring to the world. Our unparalleled expertise in our core technologies along with deep manufacturing and engineering capabilities require a talent strategy focused on attracting and retaining exceptional people, fostering a culture that enables innovation and collaboration and supporting long and successful careers.
Human Capital Management Overview At Corning, we are proud of the life-changing innovations we bring to the world. Our unparalleled expertise in our core technologies along with deep manufacturing and engineering capabilities require a talent strategy focused on attracting and retaining exceptional people, building a culture that enables innovation and collaboration and supporting long and successful careers.
Our large-scale manufacturing experience, fiber process, technology leadership and intellectual property provide cost advantages relative to several of our competitors. Our principal competitors include CommScope, Inc. and Prysmian Group S.p.A. Display Technologies Segment We are the largest worldwide producer of glass substrates for flat panel displays.
Our large-scale manufacturing experience, fiber process, technology leadership and intellectual property provide cost advantages relative to several of our competitors. Our principal competitors include CommScope Holding Company, Inc. and Prysmian Group S.p.A. Display Technologies Segment We are the largest worldwide producer of glass substrates for flat panel displays.
He oversees corporate strategy, corporate communications and advanced analytics. Prior to joining Corning, Dr. Evenson was a senior vice president with Sanford C. Bernstein & Co., LLC, where he served as a senior analyst. Before that, Dr. Evenson was a partner at McKinsey & Company, where he led technology and market assessment for early-stage technologies.
He oversees corporate strategy, corporate communications and advanced analytics. Prior to joining Corning, Dr. Evenson was a senior vice president with Sanford C. Bernstein & Co., LLC, where he served as a senior analyst. Before that, Dr. Evenson was a partner at McKinsey & Company, where he led technology and market assessment for early-stage technologies. Age 58.
The information contained on the Company’s website is not included in, or incorporated by reference into, this Annual Report on Form 10-K. Other Additional information in response to Item 1 is found in Note 19 (Reportable Segments) in the accompanying notes to the consolidated financial statements. 12 Table of Contents
The information contained on the Company’s website is not included in, or incorporated by reference into, this Annual Report on Form 10-K. Other Additional information in response to Item 1 is found in Note 17 (Reportable Segments) in the accompanying notes to the consolidated financial statements. 12 Table of Contents
Document Availability A copy of Corning’s 2022 Annual Report on Form 10-K filed with the United States Securities and Exchange Commission (the “SEC”) is available upon written request to Corporate Secretary, Corning Incorporated, One Riverfront Plaza, Corning, NY 14831.
Document Availability A copy of Corning’s 2023 Annual Report on Form 10-K filed with the United States Securities and Exchange Commission (the “SEC”) is available upon written request to Corporate Secretary, Corning Incorporated, One Riverfront Plaza, Corning, NY 14831.
The Specialty Materials segment represented 14% of Corning’s total segment net sales in 2022. 4 Table of Contents Environmental Technologies Segment The Environmental Technologies segment manufactures ceramic substrates and filter products for emissions control in mobile applications around the world.
The Specialty Materials segment represented 14% of Corning’s total segment net sales in 2023. 4 Table of Contents Environmental Technologies Segment The Environmental Technologies segment manufactures ceramic substrates and filter products for emissions control in mobile applications around the world.
Curran was appointed executive vice president and innovation officer in 2012. Age 64. Jeffrey W. Evenson Executive Vice President and Chief Strategy Officer Dr. Evenson joined Corning in 2011 as senior vice president and operations chief of staff. In 2015, he was named chief strategy officer. He was appointed executive vice president in 2018.
Curran was appointed executive vice president and innovation officer in 2012. Age 65. Jeffrey W. Evenson Executive Vice President and Chief Strategy Officer Dr. Evenson joined Corning in 2011 as senior vice president and operations chief of staff. In 2015, he was named chief strategy officer. He was appointed executive vice president in 2018.
Amin was appointed vice president and general manager, Corning Gorilla Glass, Mobile Consumer Electronics, and in June 2022 he was appointed senior vice president and chief technology officer. Age 54. John P. Bayne, Jr. Senior Vice President and General Manager, Mobile Consumer Electronics Mr.
Amin was appointed vice president and general manager, Corning Gorilla Glass, Mobile Consumer Electronics, and in June 2022 he was appointed senior vice president and chief technology officer. Age 55. John P. Bayne, Jr. Senior Vice President and General Manager, Mobile Consumer Electronics Mr.
Life Sciences Segment We seek to maintain a competitive advantage by emphasizing product quality, global distribution, supply chain efficiency, a broad product line, technical support and superior product attributes. Our principal competitors include Thermo Fisher Scientific, Inc., Avantor, Inc., Greiner AG, Eppendorf AG, Sarstedt AG and Danaher Corporation.
Life Sciences Segment We seek to maintain a competitive advantage by emphasizing product quality, global distribution, supply chain efficiency, a broad product line, technical support and superior product attributes. Our principal competitors include Thermo Fisher Scientific Inc., Avantor, Inc., Greiner AG, Eppendorf SE, Sarstedt AG & Co. KG and Danaher Corporation.
Refer to the material under the heading “Patents and Trademarks” for more information. The Life Sciences segment represented 8% of Corning’s total segment net sales in 2022. Hemlock and Emerging Growth Businesses All other businesses that do not meet the quantitative threshold for separate reporting have been grouped as Hemlock and Emerging Growth Businesses.
Refer to the material under the heading “Patents and Trademarks” for more information. The Life Sciences segment represented 7% of Corning’s total segment net sales in 2023. Hemlock and Emerging Growth Businesses All other businesses that do not meet the quantitative threshold for separate reporting have been grouped as Hemlock and Emerging Growth Businesses.
The Display Technologies segment represented 22% of Corning’s total segment net sales in 2022. Specialty Materials Segment The Specialty Materials segment manufactures products that provide more than 150 material formulations for glass, glass ceramics and crystals, as well as precision metrology instruments and software to meet requirements for unique customer needs.
The Display Technologies segment represented 26% of Corning’s total segment net sales in 2023. Specialty Materials Segment The Specialty Materials segment manufactures products that provide more than 150 material formulations for glass, glass ceramics and crystals, as well as precision metrology instruments and software to meet requirements for unique customer needs.
We are licensed to use certain patents owned by others, which are also considered important to the segment’s operations. Refer to the material under the heading “Patents and Trademarks” for more information. The Environmental Technologies segment represented 11% of Corning’s total segment net sales in 2022.
We are licensed to use certain patents owned by others, which are also considered important to the segment’s operations. Refer to the material under the heading “Patents and Trademarks” for more information. The Environmental Technologies segment represented 13% of Corning’s total segment net sales in 2023.
In 2022, we were granted about 470 patents in the U.S. and over 1,450 patents in countries outside the U.S. Each business segment possesses a patent portfolio that provides certain competitive advantages in protecting our innovations. We have historically enforced, and will continue to enforce, our intellectual property rights.
In 2023, we were granted about 520 patents in the U.S. and over 1,510 patents in countries outside the U.S. Each business segment possesses a patent portfolio that provides certain competitive advantages in protecting our innovations. We have historically enforced, and will continue to enforce, our intellectual property rights.
Our global workforce is comprised of 62% men and 38% women. In all regions of the world, we are continuing to invest in building our pipeline of female and minority talent through targeted recruitment efforts, mentoring and coaching programs, networking opportunities, personalized development plans and proactive career management.
Our global workforce is comprised of 64% men and 36% women. In all regions of the world, we are continuing to invest in building our talent pipeline of women through targeted recruitment efforts, mentoring and coaching programs, networking opportunities, personalized development plans and proactive career management.
Worldwide, we have about 8,480 patent applications in process, with about 2,170 in process in the U.S. Our patent portfolio will continue to provide a competitive advantage in protecting our innovation, although our competitors in each of our businesses are actively seeking patent protection as well.
Worldwide, we have about 8,370 patent applications in process, with about 2,130 in process in the U.S. Our patent portfolio will continue to provide a competitive advantage in protecting our innovations, although our competitors in each of our businesses are actively seeking patent protection as well.
Important U.S.-issued patents in our reportable segments include the following: • Optical Communications: patents relating to (i) multimode and single mode optical fiber products including low-loss optical fiber, large effective area optical fiber and other high data rate optical fiber, and processes and equipment for manufacturing optical fiber, including methods for making optical fiber preforms and methods for drawing, cooling and winding optical fiber; (ii) optical fiber ribbons and methods for making such ribbon, indoor and outdoor fiber optic cable products and methods for making and installing optical fiber cable; (iii) optical fiber connectors and factory-terminated assemblies, hardware, termination and storage and associated methods of manufacture; and (iv) optical fiber and hybrid fiber-coax wireless communication systems. • Display Technologies: patents relating to glass compositions and methods for the use and manufacture of glass substrates for display applications. • Specialty Materials: patents relating to protective cover glass materials and coatings, ophthalmic glasses and polarizing dyes and semiconductor/microlithography optics and blanks, metrology instrumentation and laser/precision optics, glass polarizers, specialty fiber and refractories. • Environmental Technologies: patents relating to cellular ceramic honeycomb products, together with ceramic batch and binder system compositions, honeycomb extrusion and firing processes, and honeycomb extrusion dies and equipment for the high-volume, low-cost manufacture of such products. • Life Sciences: patents relating to methods and apparatus for the manufacture and use of scientific laboratory equipment including multiwell plates and cell culture products, as well as equipment and processes for cell and gene therapy research. 7 Table of Contents The following table presents the approximate number of patents granted to our reportable segments: Number of patents worldwide U.S. patents Important U.S. patents expiring between 2023 and 2025 Optical Communications 4,584 2,135 27 Display Technologies 1,168 159 7 Specialty Materials 2,645 816 12 Environmental Technologies 965 359 11 Life Sciences 551 152 2 Many of our patents are used in operations or are licensed for use by others, and we are licensed to use patents owned by others.
Important issued patents in our reportable segments include the following: • Optical Communications: patents relating to (i) multimode and single mode optical fiber products including low-loss optical fiber, large effective area optical fiber and other high data rate optical fiber, and processes and equipment for manufacturing optical fiber, including methods for making optical fiber preforms and methods for drawing, cooling and winding optical fiber; (ii) optical fiber ribbons and methods for making such ribbon, indoor and outdoor fiber optic cable products and methods for making and installing optical fiber cable; (iii) optical fiber connectors and factory-terminated assemblies, hardware, termination and storage and associated methods of manufacture; and (iv) optical fiber and hybrid fiber-coax wireless communication systems. • Display Technologies: patents relating to glass compositions and methods for the use and manufacture of glass substrates for display applications. • Specialty Materials: patents relating to protective cover glass materials and coatings, ophthalmic glasses and polarizing dyes and semiconductor/microlithography optics and blanks, metrology instrumentation and laser/precision optics, glass polarizers, specialty fiber and refractories. • Environmental Technologies: patents relating to cellular ceramic honeycomb products, together with ceramic batch and binder system compositions, honeycomb extrusion and firing processes, and honeycomb extrusion dies and equipment for the high-volume, low-cost manufacture of such products. • Life Sciences: patents relating to methods and apparatus for the manufacture and use of scientific laboratory equipment including multiwell plates and cell culture products, as well as equipment and processes for cell and gene therapy research. 7 Table of Contents The following table presents the approximate number of patents granted to our reportable segments: Number of patents worldwide U.S. patents Important U.S. patents expiring between 2024 and 2026 Optical Communications 4,824 2,213 31 Display Technologies 1,135 154 9 Specialty Materials 2,837 866 14 Environmental Technologies 936 346 9 Life Sciences 564 158 4 Many of our patents are used in operations or are licensed for use by others, and we are licensed to use patents owned by others.
Hemlock and Emerging Growth Businesses represented 11% of Corning’s total segment net sales in 2022. Additional explanation regarding Corning and its five reportable segments, as well as financial information about geographic areas, is presented in Management’s Discussion and Analysis of Financial Condition and Results of Operations and Note 19 (Reportable Segments) in the accompanying notes to the consolidated financial statements.
Hemlock and Emerging Growth Businesses represented 10% of Corning’s total segment net sales in 2023. 5 Table of Contents Additional explanation regarding Corning and its five reportable segments, as well as financial information about geographic areas, is presented in Management’s Discussion and Analysis of Financial Condition and Results of Operations and Note 17 (Reportable Segments) in the accompanying notes to the consolidated financial statements.
In 2009, he was appointed director, corporate development Asia Pacific. In 2010, he further expanded his role to lead the strategy & corporate development organization of Corning International. In 2014, he was named deputy general manager, Corning Display Technologies. In 2015, Mr. Zhang was elected senior vice president and general manager, Corning Display Technologies. Age 50.
In 2010, he further expanded his role to lead the strategy & corporate development organization of Corning International. In 2014, he was named deputy general manager, Corning Display Technologies. In 2015, Mr. Zhang was appointed senior vice president and general manager, Corning Display Technologies.
Talent Management Each year we formally evaluate the talent implications of our strategic business plans and align our actions and objectives accordingly. As businesses grow organically or through acquisition, we create human capital objectives to ensure we have the right people with the right skills in place to deliver that growth.
Talent Management Each year we formally evaluate the talent implications of our strategic business plans and align our actions and objectives accordingly. As business needs change, we create human capital objectives to ensure we have the right people with the right skills in place to deliver that growth.
Amin joined Corning in 1997 as a senior research scientist. He held numerous operational roles within Photonics before joining Corning Specialty Materials in 2004. He led product and process development, product engineering and commercial technology for Gorilla Glass and later for Mobile Consumer Electronics. In 2020, Dr.
He held numerous operational roles within Photonics before joining Corning Specialty Materials in 2004. He led product and process development, product engineering and commercial technology for Gorilla Glass and later for Mobile Consumer Electronics. In 2020, Dr.
Display Technologies Segment The Display Technologies segment manufactures glass substrates for flat panel displays, including liquid crystal displays (“LCDs”) and organic light-emitting diodes (“OLEDs”) that are used primarily in televisions, notebook computers, desktop monitors, tablets and handheld devices.
The Optical Communications segment represented 30% of Corning’s total segment net sales in 2023. Display Technologies Segment The Display Technologies segment manufactures glass substrates for flat panel displays, including liquid crystal displays (“LCDs”) and organic light-emitting diodes (“OLEDs”) that are used primarily in televisions, notebook computers, desktop monitors, tablets and handheld devices.
Examples of enterprise network solutions include the EDGE® platform, which provides high-density pre-connectorized cabling solutions for data center applications, supporting a path to speeds of 400G and beyond and Everon™ Network Solutions, which provide next-generation cellular connectivity products for interior spaces of all sizes.
Examples of enterprise network solutions include the EDGE® platform, which provides high-density pre-connectorized cabling solutions for data center applications, supporting a path to speeds of 400G and beyond and Everon™ Network Solutions, which provide next-generation cellular connectivity products for interior spaces of all sizes. Our optical fiber manufacturing facilities are in North Carolina, China, India and Poland.
Age 57. 10 Table of Contents Li Fang President and General Manager, International Mr. Fang joined Corning International in 1997 as business development manager, China. In 1999 he transferred to the Environmental Products Division and became production manager of Corning Environmental Technologies’ (CET) China Plant - Corning (Shanghai) Company Ltd.
Li Fang Senior Vice President, Corning International and New Business Development, Solar Mr. Fang joined Corning International in 1997 as business development manager, China. In 1999 he transferred to the Environmental Products Division and became production manager of Corning Environmental Technologies’ (CET) China Plant - Corning (Shanghai) Company Ltd.
Our capabilities are versatile and synergistic, allowing Corning to evolve to meet changing market needs, while also helping customers capture new opportunities in dynamic industries. Today, Corning’s markets include optical communications, mobile consumer electronics, display technology, automotive emissions control, laboratory products and other glass products.
Our capabilities are versatile and synergistic, allowing Corning to evolve to meet changing market needs, while also helping customers capture new opportunities in dynamic industries. Today, Corning’s markets include optical communications, mobile consumer electronics, display, automotive, solar, semiconductor and life sciences.
At the end of 2022, we owned about 12,465 unexpired patents in various countries, of which about 4,470 were U.S. patents. Between 2023 and 2025, approximately 650, or 5%, of these worldwide patents will expire, while at the same time we intend to seek patents protecting our newer innovations.
At the end of 2023, we owned about 12,975 unexpired patents in various countries, of which about 4,660 were U.S. patents. Between 2024 and 2026, approximately 730, or 6%, of these worldwide patents will expire, while at the same time we intend to seek patents protecting our newer innovations.
Each of our 57,500 full- and part-time employees in 44 countries make an important contribution, whether in one of our manufacturing or processing facilities, research labs, sales offices or other facilities. Approximately 65% of all employees are in production and maintenance roles and an estimated 58% of those employees are represented by a union or works council.
Each of our 49,800 full- and part-time employees in 44 countries make an important contribution, whether in one of our manufacturing or processing facilities, research labs, sales offices or other facilities. Approximately 60% of all employees are in production and maintenance roles and more than 60% of all employees are represented by a union, works council or other representative group.
He was appointed senior vice president and general manager, Automotive in 2020. Age 54. Edward A. Schlesinger Executive Vice President and Chief Financial Officer Mr. Schlesinger joined Corning in 2013 as senior vice president and chief financial officer of Corning Optical Communications. He was appointed vice president and corporate controller in September 2015 and principal accounting officer in December 2015.
Schlesinger Executive Vice President and Chief Financial Officer Mr. Schlesinger joined Corning in 2013 as senior vice president and chief financial officer of Corning Optical Communications. He was appointed vice president and corporate controller in September 2015 and principal accounting officer in December 2015. He was named senior vice president in 2019.
In 2022, Corning unveiled its newest glass innovation, Corning® Gorilla® Glass Victus® 2, which delivers improved cover glass drop performance on rough surfaces like concrete, while preserving the scratch resistance of Corning® Gorilla® Glass Victus®.
In 2022, Corning unveiled its newest glass innovation, Corning® Gorilla® Glass Victus® 2, which delivers improved cover glass drop performance on rough surfaces like concrete, while preserving the scratch resistance of Corning® Gorilla® Glass Victus®. Corning® Gorilla® Glass is manufactured in the United States (“U.S.”), South Korea and Taiwan.
Weeks has been a member of Corning’s Board of Directors since December 2000. He was named chief executive officer in 2005 and chairman of the board in 2007. Mr. Weeks is a director of Amazon.com, Inc. Age 63. John Z. Zhang Senior Vice President and General Manager, Display Technologies Mr. Zhang joined Corning in 2008 as director, corporate development.
He was named chief executive officer in 2005 and chairman of the board in 2007. Mr. Weeks is a director of Amazon.com, Inc. Age 64. John Z. Zhang Senior Vice President and General Manager, Display & Corning Asia Mr. Zhang joined Corning in 2008 as director, corporate development. In 2009, he was appointed director, corporate development Asia Pacific.
To maintain compliance with such regulations, capital expenditures for pollution control in operations were approximately $20.5 million in 2022 and are estimated to be $29.7 million in 2023. Our 2022 consolidated operating results were charged with approximately $60.2 million for depreciation, maintenance, waste disposal and other operating expenses associated with pollution control.
To maintain compliance with such regulations, capital expenditures for pollution control in operations were approximately $21.8 million in 2023 and are estimated to be $20.1 million in 2024. Our 2023 consolidated operating results reflect approximately $69.6 million for depreciation, maintenance, waste disposal and other operating expenses associated with pollution control.
He was appointed senior vice president and general manager of Mobile Consumer Electronics in April 2020. Age 56. Stefan Becker Senior Vice President, Finance and Corporate Controller Mr. Becker joined Corning in 2000 through Corning’s acquisition of Siemens Communication Cable Division.
He was appointed senior vice president and general manager of Mobile Consumer Electronics in April 2020. Age 57. Stefan Becker Senior Vice President and Corporate Controller Mr. Becker joined Corning in 2000 through Corning’s acquisition of Siemens Communication Cable Division. From 2001 to 2005, he held positions as manager, Planning and Analysis and later director of Finance, Corning Cable Systems.
Verkleeren Senior Vice President and General Manager, Life Sciences Technologies Mr. Verkleeren joined Corning in 2001 in the Optical Communications segment. He joined the Life Sciences segment in 2004 and has held a variety of progressive roles in that segment. In 2010, he was named division vice president and director of Advanced Life Sciences.
He joined the Life Sciences segment in 2004 and has held a variety of progressive roles in that segment. In 2010, he was named division vice president and director of Advanced Life Sciences. In 2012 he was named division vice president and program director for Corning Pharmaceutical Technologies. In 2015, Mr.
In 2009 he was named director of Finance, Corning Display Technologies (“CDT”) and in 2010 was appointed division controller, CDT. Between 2012 and 2015, he served as international division vice president, Finance, Corning Glass Technologies. Mr. Becker was appointed Corning’s operations controller in 2015 and senior vice president in 2019.
He joined the Display Technologies division in 2005 as U.S. Controller. In 2007 he was appointed CFO, Corning Display Technologies Taiwan. In 2009 he was named director of Finance, Corning Display Technologies (“CDT”) and in 2010 was appointed division controller, CDT. Between 2012 and 2015, he served as international division vice president, Finance, Corning Glass Technologies. Mr.
HSG is a leading provider of high-purity polysilicon products for the solar power and electronics industries.
This group is primarily comprised of the results of Hemlock Semiconductor Group (“HSG”). HSG is a leading provider of high-purity polysilicon products for the solar power and electronics industries.
Steverson served as senior vice president, general counsel, and corporate secretary of Motorola Solutions, Inc. During his 18 years with Motorola, he held a variety of law leadership roles across the company’s numerous business units. Prior to Motorola, Mr. Steverson was in private practice at the law firm of Arnold & Porter. Age 59. Ronald L.
He was appointed chief legal & administrative officer in 2020. Prior to joining Corning, Mr. Steverson served as senior vice president, general counsel, and corporate secretary of Motorola Solutions, Inc. During his 18 years with Motorola, he held a variety of law leadership roles across the company’s numerous business units. Prior to Motorola, Mr.
In 2018 he was appointed vice president, Human Resources and was appointed senior vice president, Human Resources in 2019. Age 57. Lawrence D. McRae Vice Chairman and Corporate Development Officer Mr. McRae joined Corning in 1985 and has held a broad range of leadership positions in finance, sales, marketing and general management across Corning’s businesses.
She has also held human resources leadership positions with SC Johnson, American Express, and DaimlerChrysler. Age 47. Lawrence D. McRae Vice Chairman and Corporate Development Officer Mr. McRae joined Corning in 1985 and has held a broad range of leadership positions in finance, sales, marketing and general management across Corning’s businesses.
Capps was appointed senior vice president and chief supply chain officer in 2020. Age 61. Martin J. Curran Executive Vice President and Innovation Officer Mr. Curran joined Corning in 1984 and has held a variety of roles in finance, manufacturing and marketing.
In 2012 he was appointed senior vice president and general manager, Optical Connectivity Solutions for Corning Optical Communications. He was appointed senior vice president and general manager, Optical Communications in 2020. Age 59. Martin J. Curran Executive Vice President and Innovation Officer Mr. Curran joined Corning in 1984 and has held a variety of roles in finance, manufacturing and marketing.
Since 2010, gender and ethnic diversity among members of the Corporate Management Group, which includes about 230 of the Company’s top global leaders, increased from 28% to 51%; corporate officer diverse representation has increased from 21% to 42%. 8 Table of Contents In 2022, we continued to maintain 100% pay equity for all salaried men and women in our worldwide operations and pay equity across minority groups compared with white salaried employees in the U.S.
Since 2013, gender and ethnic diversity among members of the Corporate Management Group, which includes approximately 240 of the Company’s top global leaders, increased from 30% to 51%; corporate officer diverse representation has increased from 23% to 42%. 8 Table of Contents In 2021, we achieved 100% pay equity for all salaried men and women in our worldwide operations, having achieved it in the U.S. since 2017.
We use the results to see what actions can be taken to improve living the Values. Corning employees all contribute to the success of the Company by Living our Values—all seven, all the time, all around the world. Diversity, Equity and Inclusion We are focused on leveraging globally diverse teams and creating an inclusive environment for all.
We use the results to pinpoint recurring global themes and develop plans to drive action based on employee feedback. Corning employees all contribute to the success of the Company by Living our Values—all seven, all the time, all around the world. Diversity, Equity and Inclusion We are focused on building globally diverse teams and creating an inclusive environment for all.
We provide on-the-job learning experience, mentoring and career planning to ensure immediate application and lasting impact. Talent retention is an ongoing important focus area which aligns with our strategy of encouraging and supporting longer-term careers with Corning. Historically, our talent retention has been consistently higher than the markets in which we compete for talent.
We offer a variety of enterprise and on-demand developmental programs and experiences, targeted to all levels in the organization. We provide on-the-job learning experience, mentoring and career planning to ensure immediate application and lasting impact. Talent retention is an ongoing focus area which aligns with our strategy of encouraging and supporting longer-term careers with Corning.
Our safety standards meet, and often exceed, local regulatory standards. Corning’s Total Recordable Incident Rate (“TRIR”) performance is at world class levels with a Company-wide TRIR of just 0.46 in 2022. Globally, we promote employee health and wellbeing through wellness programs which vary by region such as nutrition, mental health and fitness-related offerings, smoking cessation programs and smoke free campuses.
Corning continued managing Total Recordable Incident Rate (“TRIR”) performance to world class levels with an annual TRIR of just 0.35 in 2023. Globally, we promote employee health and wellbeing through wellness programs which vary by region such as nutrition and fitness-related offerings, smoking cessation programs and smoke free campuses.
He was named senior vice president in 2019. In February 2022, he was appointed executive vice president and chief financial officer. Prior to joining Corning, Mr. Schlesinger served as Vice President, Finance and Sector Chief Financial Officer for the Climate Solutions Sector for Ingersoll Rand. Mr.
In February 2022, he was appointed executive vice president and chief financial officer. Prior to joining Corning, Mr. Schlesinger served as Vice President, Finance and Sector Chief Financial Officer for the Climate Solutions Sector for Ingersoll Rand. Mr. Schlesinger’s financial career spans more than 20 years, with extensive expertise in accounting, technical financial management and reporting. Age 56.
Weeks joined Corning in 1983 in the finance group. He has held a variety of financial, business development, commercial and general management roles. He was named vice president and general manager of the Optical Fiber business in 1996 and president of Corning’s Optical Communications division in 2001. He became Corning’s president and chief operation officer in 2002. Mr.
He was named vice president and general manager of the Optical Fiber business in 1996 and president of Corning’s Optical Communications division in 2001. He became Corning’s president and chief operation officer in 2002. Mr. Weeks has been a member of Corning’s Board of Directors since December 2000.
In 2014, he was appointed executive vice president, Corning Technologies and International. In 2020, he was appointed president & chief operating officer. Age 63. Avery H. Nelson III Senior Vice President and General Manager, Automotive Mr. Nelson joined Corning in 1991 as shift supervisor at the Harrodsburg, Kentucky plant and subsequently served in progressive roles in Corning Display Technologies.
In 2014, he was appointed executive vice president, Corning Technologies and International. In 2020, he was appointed president & chief operating officer. Age 64. Avery H. Nelson III Senior Vice President and General Manager, Automotive & Solar Mr.
Our optical fiber manufacturing facilities are in North Carolina, China, India and a new facility in Poland as of the third quarter of 2022. Cabling operations are in North Carolina, Poland and smaller regional locations. Our manufacturing operations for hardware and equipment products are in Texas, Mexico, Brazil, Germany, Poland and China. Patent protection is important to the segment’s operations.
Cabling operations are in North Carolina, Poland and smaller regional locations. Our manufacturing operations for hardware and equipment products are in Texas, Mexico, Brazil, Germany, Poland and China. Patent protection is important to the segment’s operations. The segment has an extensive portfolio of patents relating to its products, technologies and manufacturing processes.
In 2012 he was named division vice president and program director for Corning Pharmaceutical Technologies. In 2015, Mr. Verkleeren became vice president and general manager of the Pharmaceutical Technologies division. He was appointed senior vice president & general manager, Life Sciences Technologies in 2020. Age 52. Wendell P. Weeks Chairman and Chief Executive Officer Mr.
Verkleeren became vice president and general manager of the Pharmaceutical Technologies division. He was appointed senior vice president & general manager, Life Sciences Technologies in 2020. Age 53. Wendell P. Weeks Chairman and Chief Executive Officer Mr. Weeks joined Corning in 1983 in the finance group. He has held a variety of financial, business development, commercial and general management roles.
In 2021 he was appointed senior vice president, Finance, and corporate controller and in February 2022 he was named principal accounting officer. Age 51. Michael A. Bell Senior Vice President and General Manager, Optical Communications Mr. Bell joined Corning in 1991 as a process engineer for the Telecommunications Cable Plant in Hickory, North Carolina.
Becker was appointed Corning’s operations controller in 2015 and senior vice president in 2019. In 2021 he was appointed senior vice president, Finance, and corporate controller and in February 2022 he was named principal accounting officer. Age 52. Michael A. Bell Senior Vice President and General Manager, Optical Communications Mr.
He has held a variety of positions in manufacturing and engineering. He was appointed to CCS Americas Cable Manufacturing Manager in 2004, which expanded to include hardware manufacturing in 2009. In 2012 he was appointed senior vice president and general manager, Optical Connectivity Solutions for Corning Optical Communications.
Bell joined Corning in 1991 as a process engineer for the Telecommunications Cable Plant in Hickory, North Carolina. He has held a variety of positions in manufacturing and engineering. He was appointed to CCS Americas Cable Manufacturing Manager in 2004, which expanded to include hardware manufacturing in 2009.
Steverson Executive Vice President and Chief Legal & Administrative Officer Mr. Steverson joined Corning in 2013 as senior vice president and general counsel. In 2018 he was named executive vice president and general counsel. He was appointed chief legal & administrative officer in 2020. Prior to joining Corning, Mr.
She brings deep experience in information technology, digital and systems transformation and risk governance to Corning. Age 48. Lewis A. Steverson Executive Vice President and Chief Legal & Administrative Officer Mr. Steverson joined Corning in 2013 as senior vice president and general counsel. In 2018 he was named executive vice president and general counsel.
In 2007, he joined CET as general manager, Corning (Shanghai) Company Limited. In 2009, he became general manager and regional director of China and India, CET. In 2010 he returned to the U.S. as program director, CET. In 2011, he assumed the role of business director, AAA Corning® Gorilla® Glass, New Business Development.
Nelson joined Corning in 1991 as shift supervisor at the Harrodsburg, Kentucky plant and subsequently served in progressive roles in Corning Display Technologies. In 2007, he joined CET as general manager, Corning (Shanghai) Company Limited. In 2009, he became general manager and regional director of China and India, CET. In 2010 he returned to the U.S. as program director, CET.
We are licensed to use certain patents owned by others, which are considered important to the segment’s operations. Refer to the material under the heading “Patents and Trademarks” for more information. The Optical Communications segment represented 34% of Corning’s total segment net sales in 2022.
The segment licenses certain of its patents to third parties and generates revenue from these licenses, although the royalty income is not currently material to this segment’s operating results. We are licensed to use certain patents owned by others, which are considered important to the segment’s operations. Refer to the material under the heading “Patents and Trademarks” for more information.
Our global workforce is concentrated in North America, the Asia Pacific region and EMEA. Values Corning is guided by an enduring set of Values that defines our relationship with employees, customers and our communities: Quality, Integrity, Performance, Leadership, Innovation, Independence and the Individual.
Values Corning is guided by an enduring set of Values that defines our relationship with employees, customers and our communities: Quality, Integrity, Performance, Leadership, Innovation, Independence and the Individual. Our Values are the key to our business success, a source of pride and excitement for our employees and the factor that ultimately sets us apart from our competitors.
Later that year, he was appointed division vice president, Heavy Duty Diesel (HDD). In 2013, he was appointed division vice president and business director. In 2014, Mr. Nelson was appointed vice president and general manager for Environmental Technologies and in 2018 he was named senior vice president and general manager, CET.
In 2011, he assumed the role of business director, AAA Corning® Gorilla® Glass, New Business Development. Later that year, he was appointed division vice president, Heavy Duty Diesel (HDD). In 2013, he was appointed division vice president and business director. In 2014, Mr.
Prior to joining Corning, she was vice president and general manager IT at Intel Corporation. She also served as chief systems officer at Anadarko Petroleum Corporation and senior director of Global Project Management Office and Business Intelligence at Baker Hughes.
She also served as chief systems officer at Anadarko Petroleum Corporation and senior director of Global Project Management Office and Business Intelligence at Baker Hughes. She spent 14 years in various divisions at General Electric (GE), including positions as Client CIO – GE Oil & Gas, IT Leader, IT program manager and Six Sigma Black Belt.
In addition, we collaborate with organizations such as the Society of Women Engineers, The Association of Latino Professionals for America, National Society of Black Engineers and military veterans’ groups to introduce us to qualified, diverse candidates. We conduct a climate survey each year at the enterprise level, analyzing results by business and region.
In addition, we collaborate with organizations such as the Society of Women Engineers, the Society of Hispanic Professional Engineers, National Society of Black Engineers and military veterans’ groups to introduce us to talented, diverse candidates. It is important to Corning that employees continue to grow and develop.
McRae has led strategy and corporate development since 2010. He was named vice chairman in 2015 and corporate development officer in 2020. Age 64. Anne Mullins Senior Vice President Ms. Mullins served as Corning’s senior vice president & chief digital & information officer from 2019 to November 2022.
McRae has led strategy and corporate development since 2010. He was named vice chairman in 2015 and corporate development officer in 2020. Mr. McRae retired on December 31, 2023 after 38 years of service. Age 65. Eric S. Musser President and Chief Operating Officer Mr.
With the continuation of the pandemic in 2022, we continued our Responsible Corning program initiated in 2020. In addition, we encouraged COVID vaccinations and boosters among our employees and in the communities in which we operate. 9 Table of Contents Executive Officers of the Registrant Jaymin Amin Senior Vice President and Chief Technology Officer Dr.
Corning also promotes healthy behaviors with its employees including flu and COVID vaccinations and has introduced global programs emphasizing mental health and wellness programs. 9 Table of Contents Executive Officers of the Registrant Jaymin Amin Senior Vice President and Chief Technology Officer Dr. Amin joined Corning in 1997 as a senior research scientist.
Our Values are the key to our business success, a source of pride and excitement for our employees and the factor that ultimately sets us apart from our competitors. In short, we believe that how we do things is as important as what we do. We measure how we live our Values through the annual Corporate Values Survey.
In short, we believe that how we do things is as important as what we do. We measure how we live our Values through our annual “Voice to Action” workplace culture survey. In 2023, we had an 85% response rate with survey participation worldwide.
He was appointed senior vice president and general manager, Optical Communications in 2020. Age 58. Cheryl C. Capps Senior Vice President and Chief Supply Chain Officer Ms. Capps joined Corning in 2011 as vice president, procurement and transportation and in 2018 she was appointed senior vice president, global supply chain. Since joining Corning, Ms.
In 2020, he was appointed senior vice president and general manager, Corning Display and was appointed as senior vice president and general manager, Display & Corning Asia in 2023. Age 51.
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The segment has an extensive portfolio of patents relating to its products, technologies and manufacturing processes. The segment licenses certain of its patents to third parties and generates revenue from these licenses, although the royalty income is not currently material to this segment’s operating results.
Added
We collaborated with Apple to deliver durable glass with infused color for the back of Apple's iPhone 15 and iPhone 15 Plus devices. These devices also feature Ceramic Shield, a highly transparent, color-free glass-ceramic, which offers unparalleled durability and toughness for smartphones.
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Corning® Gorilla® Glass is manufactured in the United States (“U.S.”), South Korea and Taiwan. ‎We invented the world’s first transparent, color-free glass-ceramic suitable for smartphone applications, which is featured as “Ceramic Shield” on the front cover of the latest iPhone models. We partnered with Apple to develop and scale the manufacturing of Ceramic Shield, which offers unparalleled durability and toughness.
Added
HSG operates in the solar power market, as polysilicon is needed in the manufacturing process to produce sustainable solar power cell, panels and arrays, and the electronics markets, as polysilicon is used to create fabricated wafers and integrated circuit chips used by leading semiconductor manufacturers.
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This group is primarily comprised of the results of Hemlock Semiconductor Group (“HSG”), which we obtained a controlling interest in during the third quarter of 2020 and have consolidated its results beginning on September 9, 2020. Refer to Note 3 (HSG Transactions and Acquisitions) in the accompanying notes to the consolidated financial statements for additional information on this transaction.
Added
Our U.S. analysis also includes minority groups compared with white employees. We continue to monitor regularly and make adjustments where appropriate to maintain our global gender pay equity. The Office of Racial Equality and Social Unity (“ORESU”) extends our longstanding commitment to diversity, equity and inclusion at Corning into the communities in which our employees live and work.
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We furthered our longstanding commitment to diversity, equity and inclusion (“DE&I”) in 2020 by creating the Office of Racial Equality and Social Unity (“ORESU”) to further our goal of a more equitable and inclusive culture at Corning and beyond.
Added
Since its creation in 2020, in addition to driving inclusive mindsets within Corning, the office leads the development and execution of programs that address racial inequalities and socioeconomic disparities in communities at the local, state and national levels. Our programs drive equity and help communities thrive by investing in education, economic growth and access to healthcare.
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The efforts of this office have not only impacted policies, practices, communications and our corporate culture, but have championed diversity and inclusion in the communities in which our employees live and work.
Added
Historically, our salaried voluntary turnover has been consistently lower than the markets in which we compete for talent. Salaried talent retention in 2023 remained strong at 95%. At Corning, the health and safety of our workforce is always of paramount consideration. Our safety standards meet, and often exceed, local regulatory standards.
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Since its creation, in addition to driving inclusive mindsets through the global deployment of a DE&I curriculum within Corning, ORESU’s external efforts have focused on building equity in education and economic development through continuous professional development, DE&I programs for educators and continued collaboration with community partners. Corning proudly sponsors 15 different Employee Resource Groups (“ERGs”) with 51 chapters worldwide.
Added
From 2012-2021 Mr. Fang served as president and general manager of Corning Greater China. In 2021 he was appointed as president and general manager, International, Corning Incorporated and in 2023 he was appointed senior vice president, Corning International and new business development, Solar. Age 61. 10 Table of Contents Jordana D.
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They represent employees who are women, Black, Asian, Latino, Native American, people with disabilities, members of the LGBTQ+ community and veterans, among others. The ERGs are vital in raising awareness, recruiting and retaining diverse talent and inspiring corporate leadership to adopt new policies, practices and services.
Added
Kammerud Senior Vice President and Chief Human Resources Officer Ms. Kammerud joined Corning in 2023 with more than 20 years of experience leading progressive HR functions and has deep expertise in people, technology, and change on a global scale and across multiple industries.
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Businesses also conduct pulse surveys as needed, to measure engagement, satisfaction and alignment with our Values. It is important to Corning that employees continue to grow and develop, pursuing their careers at the Company over the long-term. We offer a variety of developmental programs and experiences targeted to all levels in the organization.
Added
Prior to joining Corning, she served as executive vice president and chief human resources officer at Claire’s, where she was responsible for global human resources, as well as corporate strategy, and enterprise transformation management. Additionally, she led numerous technology, capability, and culture investments. Prior to that role, Ms. Kammerud served as senior vice president, chief human resources officer, at Core-Mark.
Removed
Like many other companies, 2022 yielded some recruitment and retention challenges primarily in specific locations within our US operations. However, our Human Resource teams mobilized quickly with plans in place to address those issues. In 2022, salaried talent retention remained strong at 94%. At Corning, the health and safety of our workforce is always of paramount consideration.
Added
Nelson was appointed vice president and general manager for Environmental Technologies and in 2018 he was named senior vice president and general manager, CET. In 2020 was appointed senior vice president and general manager, Automotive. He was appointed senior vice president and general manager, Automotive & Solar in 2023. Age 55. Edward A.
Removed
From 2001 to 2005, he held positions as manager, Planning and Analysis and later director of Finance, Corning Cable Systems. He joined the Display Technologies division in 2005 as U.S. Controller. In 2007 he was appointed CFO, Corning Display Technologies Taiwan.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

27 edited+4 added−6 removed55 unchanged
Biggest changeThe following table details the number of combined customers of our reportable segments that accounted for a large percentage of segment net sales: Number of combined end customers % of total segment net sales in 2022 Optical Communications 2 26% Display Technologies 2 37% Specialty Materials 2 49% Environmental Technologies 3 74% Life Sciences 2 37% 14 Table of Contents Events outside of Corning ’ s control, or those of our contract manufacturers, could cause a disruption to our manufacturing operations and our ability to serve our customers, resulting in a negative impact to Corning ’ s net sales, net income, asset values and liquidity Disruption to our manufacturing operations, or those of our contract manufacturers, could significantly impact Corning’s ability to supply its customers and could produce a near-term severe impact on our individual business units and the Company.
Biggest changeThis concentration subjects us to a variety of risks including: • The loss or insolvency of one or more of our key customers, could result in a substantial loss of sales and reduction in anticipated cash flows; • Customers may possess substantial leverage in negotiating contractual obligations, including liability provisions; and • Mergers and consolidations between customers could result in further concentration of the customer base. 14 Table of Contents The following table details the number of combined customers of our reportable segments that accounted for a large percentage of segment net sales: Number of combined end customers % of total segment net sales in 2023 Optical Communications 2 21 % Display Technologies 3 44 % Specialty Materials 2 44 % Environmental Technologies 3 68 % Life Sciences 2 41 % Events outside of Corning ’ s control, or those of our contract manufacturers, could cause a disruption to our manufacturing operations and our ability to serve our customers, resulting in a negative impact to Corning ’ s net sales, net income, asset values and liquidity Disruption to our manufacturing operations, or those of our contract manufacturers, could significantly impact Corning’s ability to supply its customers and could produce a near-term severe impact on our individual business units and the Company.
Despite our efforts, these protections may be limited and we may encounter difficulties in protecting our intellectual property rights or obtaining rights to additional intellectual property necessary to permit us to continue or expand our businesses. We cannot provide assurance that the patents that we hold or may obtain will provide meaningful protection against our competitors.
Despite our efforts, these protections may be limited and we may encounter difficulties in protecting our intellectual property rights or obtaining rights to additional intellectual property necessary to permit us to continue or expand our businesses. We cannot provide assurance that the patents we hold or may obtain will provide meaningful protection against our competitors.
Inflationary price pressures and uncertain availability of commodities, raw materials, utilities, labor or other inputs used by us and our suppliers, or instability in logistics and related costs, among other factors, could negatively impact our profitability Increases in the price of commodities, raw materials, utilities, labor or other inputs that we or our suppliers use in manufacturing and supplying products, components and parts, along with logistics and other related costs, may lead to higher production and shipping costs for our products, parts and components.
Risks Related to Our Business Inflationary price pressures and uncertain availability of commodities, raw materials, utilities, labor or other inputs used by us and our suppliers, or instability in logistics and related costs, among other factors, could negatively impact our profitability Increases in the price of commodities, raw materials, utilities, labor or other inputs that we or our suppliers use in manufacturing and supplying products, components and parts, along with logistics and other related costs, may lead to higher production and shipping costs for our products, parts and components.
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; • Governmental protectionist policies and sovereign and political risks that may adversely affect Corning’s profitability and assets; • Tariffs, trade duties and other trade barriers including anti-dumping and countervailing duties; • Geographical concentration of our factories and operations, and regional shifts in our customer base; • Periodic health epidemic or pandemic concerns, such as COVID-19; • Political unrest, geopolitical tensions, confiscation or expropriation of 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; • Differing legal systems, including protection and treatment of intellectual property and patents; • Complex, changing or competing tax regimes; • Difficulty in collecting obligations owed to us; • Natural disasters such as floods, earthquakes, tsunamis and windstorms; and • Potential loss of utilities or other disruptions affecting manufacturing.
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; • Governmental protectionist policies and sovereign and political risks that may adversely affect Corning’s profitability and assets; • Tariffs, trade duties and other trade barriers including anti-dumping and countervailing duties; • Geographical concentration of our factories and operations, and regional shifts in our customer base; • Health crisis events, including epidemic or pandemic concerns; • Political unrest, geopolitical tensions, confiscation or expropriation of 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; • Differing legal systems, including protection and treatment of intellectual property and patents; • Complex, changing or competing tax regimes; • Difficulty in collecting obligations owed to us; • Natural disasters such as floods, earthquakes, tsunamis and windstorms; and • Potential loss of utilities or other disruptions affecting manufacturing.
We may experience difficulties in enforcing our intellectual property rights, which could result in loss of market share, and we may be subject to claims of infringement of the intellectual property rights of others We rely on patent and trade secret laws, copyright, trademark, confidentiality procedures, controls and contractual commitments to protect our intellectual property rights.
We may experience difficulties in enforcing our intellectual property rights, which could result in loss of market share and decreased sales and profits, and we may be subject to claims of infringement of the intellectual property rights of others We rely on patent and trade secret laws, copyright, trademark, confidentiality procedures, controls and contractual commitments to protect our intellectual property rights.
If our investments do not provide a pipeline of products or technologies that our customers demand or lower our manufacturing costs, or if our products or technologies become obsolete, it could negatively impact our revenue and operating margins for both near- and long-term.
If our investments do not provide a pipeline of products or technologies that our customers demand or lower our manufacturing costs, or if our products or technologies become obsolete or disrupted by emerging technologies, it could negatively impact our revenue and operating margins for both near- and long-term.
Factors such as supply chain disruptions, manufacturing interruptions or delays, or the failure to accurately forecast customer demand, could affect our ability to meet customer demand, lead to higher costs, or result in excess or obsolete inventory; if we are unable to obtain the necessary equipment, raw and batch materials, natural resources, utilities and other essentials required in our products or processes, our business will be negatively impacted Corning’s business relies on the timely supply of materials, equipment, services and related products to meet the changing technical and volume requirements of its customers, which depends in part on the timely delivery of materials, equipment and services, from suppliers and contract manufacturers.
Factors such as supply chain disruptions, manufacturing interruptions or delays, or the failure to accurately forecast customer demand, could affect our ability to meet customer demand, lead to higher costs, or result in excess or obsolete inventory; if we are unable to obtain the necessary equipment, raw and batch materials, natural resources, utilities and other essentials required in our products or processes, our business will be negatively impacted Corning’s business relies on the timely supply of raw materials, precious metals, natural resources or utilities including energy and industrial water, equipment, parts and components, services and related products to meet the changing technical and volume requirements of its customers, which depends in part on the timely delivery of materials, equipment and services, from suppliers and contract manufacturers.
The pandemic has resulted in authorities around the world implementing numerous unprecedented measures such as travel restrictions, quarantines, shelter in place orders, vaccine mandates and facility shutdowns.
Recently, the COVID-19 pandemic resulted in authorities around the world implementing numerous unprecedented measures such as travel restrictions, quarantines, shelter in place orders, vaccine mandates and facility shutdowns.
These factors, which are variable and generally outside of our control, could materially impact our results of operations, anticipated future results, financial position and cash flows. We may have significant exposure to counterparties of our related derivatives portfolio We maintain a significant portfolio of over-the-counter derivatives to hedge our projected currency exposure.
These factors could materially impact our results of operations, anticipated future results, financial position and cash flows. We may have significant exposure to counterparties of our related derivatives portfolio We maintain a significant portfolio of over-the-counter derivatives to hedge our projected currency exposure.
Corning ’ s Display Technologies segment generates a significant amount of the Company ’ s profits and cash flow; any significant decrease in display glass pricing or market share could have a material and negative impact on our financial results Corning’s ability to generate profits and operating cash flow depends largely on the profitability of our display glass business, which is subject to continuous pricing pressure due to factors such as industry competition, potential over-capacity, and development of new technologies.
Corning ’ s Display Technologies segment generates a significant amount of the Company ’ s profits and cash flow; any significant decrease in display glass pricing, volume or market share could have a material and negative impact on our financial results Corning’s ability to generate profits and operating cash flow depends largely on the profitability of our display glass business, which is subject to pricing pressure, exchange rate movements, industry competition, potential over-capacity, development of new technologies and operational and regulatory risks.
Additionally, we rely on a global supply chain for key components and capabilities that are central to our ability to invent, make and sell products. Compliance with laws and regulations increases our costs.
Additionally, we rely on a global supply chain for key components and capabilities that are central to our ability to invent, make and sell products. Compliance with multiple legal and regulatory requirements increases our costs.
Item 1A. Risk Factors We operate in rapidly changing economic, political and technological environments that present numerous risks.
Item 1A. Risk Factors We operate globally in a rapidly changing economic, political and technological environment that present numerous risks.
These measures have impacted, and may continue to impact our workforce, operations and supply chains, and those of our customers, contract manufacturers and suppliers, particularly in the event of a significant global resurgence of the illness or similar global health crisis.
These measures have impacted our workforce, operations and supply chains, and those of our customers, contract manufacturers and suppliers, and may continue to have an impact particularly in the event of another significant global health crisis.
If we are not able to achieve proportionate reductions in costs and/or increases in volume to offset ongoing pricing pressure, it could have a material adverse impact on our financial results.
If we are not able to achieve proportionate reductions in costs and/or increases in volume or price to offset the aforementioned factors, it could have a material adverse impact on our financial results.
Corning may also experience significant interruptions of its manufacturing operations, delays in its ability to deliver products or services, increased costs or customer order cancellations as a result of: • The failure or inability to accurately forecast demand and obtain sufficient quantities of materials, equipment and services on a cost-effective basis; • Volatility in the availability and cost of materials, equipment and services, including rising prices due to inflation or scarcity of availability; • Difficulties or delays in obtaining required import or export approvals; • Shipment delays due to transportation interruptions or capacity constraints; • A worldwide shortage of semiconductor components or other issues; • Information technology or infrastructure failures, including those of a third-party supplier or service provider; and • Natural disasters, the impacts of climate change, or other events beyond Corning’s control (such as earthquakes, utility interruptions, tsunamis, hurricanes, typhoons, floods, storms or extreme weather conditions, fires, regional economic downturns, regional or global health epidemics, including the ongoing COVID-19 pandemic, geopolitical turmoil, increased trade restrictions between the U.S. and China and other countries, social unrest, political instability, terrorism, or acts of war) in locations where it or its customers or suppliers have manufacturing, research, engineering or other operations.
Volatility of demand for manufacturing equipment can increase capital, technical, operational and other risks for Corning and for companies throughout our supply chain, and may cause some suppliers to exit businesses, scale back or cease operations, which could impact our ability to meet customer demand and could have a material adverse effect on our business. 13 Table of Contents Corning may also experience significant interruptions of its manufacturing operations, delays in its ability to deliver products or services, increased costs or customer order cancellations as a result of: • The failure or inability to accurately forecast demand and obtain sufficient quantities of materials, equipment and services on a cost-effective basis; • Volatility in the availability and cost of materials, equipment and services, including rising prices due to inflation or scarcity of availability; • Difficulties or delays in obtaining required import or export approvals; • Shipment delays due to transportation interruptions or capacity constraints; • A worldwide shortage of semiconductor components or other issues; • Information technology or infrastructure failures, including those of a third-party supplier or service provider; and • Natural disasters, the impacts of climate change, or other events beyond Corning’s control (such as earthquakes, utility interruptions, tsunamis, hurricanes, typhoons, floods, storms or extreme weather conditions, fires, regional economic downturns, regional or global health crisis events, geopolitical turmoil, increased trade restrictions between the U.S. and China and other countries, social unrest, political instability, terrorism, or acts of war) in locations where it or its customers or suppliers have manufacturing, research, engineering or other operations.
Changes in regulations and the regulatory environment in the U.S. and the many other countries in which we operate, such as those resulting from the regulation and impact of climate change, CO 2 abatement and emission reduction targets, may affect our businesses and results in adverse ways by, among other things, substantially increasing manufacturing costs, limiting availability of scarce resources, especially energy, or requiring limitations on production or sales of our products or those of our customers.
Changes in regulations and the regulatory environment in the U.S. and the many other countries in which we operate, such as those resulting from the regulation and impact of climate change, CO 2 abatement and emission reduction targets, may affect our businesses and results in adverse ways by, among other things, substantially increasing manufacturing costs, limiting availability of scarce resources, especially energy, or requiring limitations on production or sales of our products or those of our customers. 16 Table of Contents General Risk Factors We may have additional tax liabilities We are subject to income taxes in the U.S. and many foreign jurisdictions and are commonly audited by various tax authorities.
Such claims of infringement or misappropriation may result in loss of revenue, substantial costs, or lead to monetary damages or injunctive relief against us. 15 Table of Contents Information technology dependency and cybersecurity vulnerabilities could lead to reduced revenue, liability claims, competitive or reputational harm, and result in material adverse effects on our operations and financial results The Company is dependent on information technology systems and infrastructure (“IT systems”) owned and operated by the Company or managed by third-party service providers, suppliers and contract manufacturers.
Information technology dependency and cybersecurity vulnerabilities could lead to reduced revenue, liability claims, competitive or reputational harm, and result in material adverse effects on our operations and financial results The Company is dependent on information technology systems and infrastructure (“IT systems”) owned and operated by the Company or managed by third-party service providers, suppliers and contract manufacturers.
Risks Related to Our Business The ongoing COVID-19 pandemic has adversely impacted, and may continue to impact, the global economy and disrupt our operations and supply chains, which may have an adverse effect on our results of operations COVID-19 has impacted and may further impact the global economy and could have additional impacts on economic growth, the proper functioning of financial and capital markets, foreign currency exchange rates and interest rates.
Health crisis events, such as epidemics or pandemics, have adversely impacted, and may continue to impact, the economy and disrupt our operations and supply chains, which may have an adverse effect on our results of operations Health crisis events, including epidemics or pandemics, such as COVID-19, have impacted and may further impact the economy and could have additional impacts on economic growth, supply chains, the proper functioning of financial and capital markets, foreign currency exchange rates and interest rates.
There is considerable uncertainty regarding the duration, scope and severity of the pandemic and the impacts on our business and the global economy from the effects of the ongoing pandemic and response measures.
There is considerable uncertainty regarding the duration, scope and severity of a health crisis event and the impacts on our business and the economy from the effects of such an event and response measures.
We may be unable to anticipate, detect, prevent or remediate future attacks, particularly as attackers are becoming more sophisticated in their ability to circumvent controls and remove forensic evidence.
From time to time, both we and certain of our providers, have been subject to cyberattacks and security incidents. We may be unable to anticipate, detect, prevent or remediate future attacks, particularly as attackers are becoming more sophisticated in their ability to circumvent controls and remove forensic evidence.
Such shortages, as well as shipment delays due to transportation interruptions, have adversely impacted, and may continue to adversely impact, our ability to meet our demand requirements. 17 Table of Contents Uncertain economic and industry conditions also make it more challenging for Corning to forecast its operating results, make business decisions and identify and prioritize the risks that may affect its businesses, sources and uses of cash, financial condition and results of operations.
Uncertain economic and industry conditions also make it more challenging for Corning to forecast its operating results, make business decisions and identify and prioritize the risks that may affect its businesses, sources and uses of cash, financial condition and results of operations.
We are also subject to a variety of other risks in managing a global organization, including those related to: • The economic and political conditions in each country or region and relationships among countries; • 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.
Even during periods of economic uncertainty or lower revenues, Corning must continue to invest in research and development and maintain a global business infrastructure to compete effectively and support its customers, which can have a negative impact on its operating margins and earnings. 17 Table of Contents We are also subject to a variety of other risks in managing a global organization, including those related to: • The economic and political conditions in each country or region and relationships among countries; • 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.
However, we cannot provide assurance that environmental claims will not be brought against us or that government regulators will not take steps to adopt more stringent environmental standards. 16 Table of Contents Any failure on our part to comply with any present or future environmental regulations could result in the assessment of damages or imposition of fines against us, or the suspension/cessation of production or operations.
Any failure on our part to comply with any present or future environmental regulations could result in the assessment of damages or imposition of fines against us, or the suspension/cessation of production or operations.
General Risk Factors We may have additional tax liabilities We are subject to income taxes in the U.S. and many foreign jurisdictions and are commonly audited by various tax authorities. There are many transactions and calculations where the ultimate tax treatment is uncertain. Judgment is required in determining our worldwide provision for income taxes.
There are many transactions and calculations where the ultimate tax treatment is uncertain. Judgment is required in determining our worldwide provision for income taxes.
Our IT systems, and those of our providers, may be vulnerable to compromise or disruption due to human error or malfeasance, outdated applications, computer viruses or malware (e.g., ransomware), natural disasters, unauthorized access, cyber-attacks and other similar incidents and disruptions. Increased work-from-home, at both the Company and our providers, presents additional operational risk.
Intrusion into a supplier or contract manufacturer system not integrated with a Corning IT system could result in service disruption and/or loss of financial control. 15 Table of Contents Our IT systems, and those of our providers, may be vulnerable to compromise or disruption due to human error or malfeasance, outdated applications, computer viruses or malware (e.g., ransomware), natural disasters, unauthorized access, cyber-attacks and other similar incidents and disruptions.
We have significant exposure to foreign currency movements A large portion of our sales, profit and cash flows are transacted in non-U.S. dollar currencies. The Company expects to continue to experience fluctuations in the U.S. dollar value of these activities if it is not possible, cost-effective or should we not elect to hedge certain currency exposure.
The Company expects to continue to experience fluctuations in the U.S. dollar value of these activities if it is not possible, cost-effective or should we not elect to hedge certain currency exposure. Additionally, gains or losses may be experienced if the underlying exposure which has been hedged increases or decreases significantly.
Companies that provide utilities, water, transportation, natural gas and other resources and services across our supply chain, are critical to our manufacturing operations and are vulnerable to cyber-attacks. From time to time, both we and certain of our providers, have been subject to cyberattacks and security incidents.
Inadequate account security or organizational security practices may also result in unauthorized access. Increased work-from-home, at both the Company and our providers, presents additional operational risk. Companies that provide utilities, water, transportation, natural gas and other resources and services across our supply chain, are critical to our manufacturing operations and are vulnerable to cyber-attacks.
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Volatility of demand for manufacturing equipment can increase capital, technical, operational and other risks for Corning and for companies throughout our supply chain, and may cause some suppliers to exit businesses, scale back or cease operations, which could impact our ability to meet customer demand. 13 Table of Contents Our ability to meet customer demand depends, in part, on our ability to obtain timely and adequate delivery of equipment, raw and batch materials, natural resources or utilities, equipment, parts and components from our suppliers.
Added
Such claims of infringement or misappropriation may result in loss of revenue, substantial costs, or lead to monetary damages or injunctive relief against us.
Removed
We may experience shortages that could adversely affect our operations. A reduction, interruption or delay of supply, or a significant increase in the price for supplies, such as manufacturing equipment, precious metals, raw materials, utilities including energy and industrial water, could have a material adverse effect on our business.
Added
However, we cannot provide assurance that environmental claims will not be brought against us or that government regulators will not take steps to adopt more stringent environmental standards.
Removed
This concentration subjects us to a variety of risks including: • The loss or insolvency of one or more of our key customers, could result in a substantial loss of sales and reduction in anticipated cash flows; • Customers may possess substantial leverage in negotiating contractual obligations, including liability provisions; and • Mergers and consolidations between customers could result in further concentration of the customer base.
Added
Such shortages, as well as shipment delays due to transportation interruptions, have adversely impacted, and may continue to adversely impact, our ability to meet our demand requirements.
Removed
Intrusion into a supplier or contract manufacturer system not integrated with a Corning IT system could result in service disruption and/or loss of financial control.
Added
We have significant exposure to foreign currency movements A large portion of our sales, profit and cash flows are transacted in non-U.S. dollar currencies, primarily the Japanese yen, South Korean won, New Taiwan dollar, Chinese yuan and euro.
Removed
Even during periods of economic uncertainty or lower revenues, Corning must continue to invest in research and development and maintain a global business infrastructure to compete effectively and support its customers, which can have a negative impact on its operating margins and earnings.
Removed
Additionally, gains or losses may be experienced if the underlying exposure which has been hedged increases or decreases significantly.

Item 2. Properties

Properties — owned and leased real estate

4 edited+0 added−0 removed0 unchanged
Biggest changeThe following table presents the distribution of this total area: (million square feet) Total Domestic Foreign Manufacturing 55.7 20.7 35.0 Sales and administrative 2.4 1.8 0.6 Research and development 3.9 1.9 2.0 Warehouse 3.8 3.0 0.8 Total 65.8 27.4 38.4 Total assets and capital expenditures by reportable segment are included in Note 19 (Reportable Segments) in the accompanying notes to the consolidated financial statements.
Biggest changeThe following table presents the distribution of this total area: (million square feet) Total Domestic Foreign Manufacturing 55.8 22.5 33.3 Sales and administrative 2.4 1.8 0.6 Research and development 3.9 1.9 2.0 Warehouse 3.4 2.6 0.8 Total 65.5 28.8 36.7 Total assets and capital expenditures by reportable segment are included in Note 17 (Reportable Segments) in the accompanying notes to the consolidated financial statements.
Item 2. Properties We operate 124 manufacturing plants and processing facilities in 15 countries, of which approximately 32% are in the U.S. We own approximately 53% of our executive and corporate buildings, with 93% located in and around Corning, New York.
Item 2. Properties We operate 124 manufacturing plants and processing facilities in 15 countries, of which approximately 33% are in the U.S. We own approximately 53% of our executive and corporate buildings, with 93% located in and around Corning, New York.
Information concerning lease commitments is included in Note 6 (Leases) in the accompanying notes to the consolidated financial statements.
Information concerning lease commitments is included in Note 5 (Leases) in the accompanying notes to the consolidated financial statements.
We also own approximately 64% of our sales and administrative office square footage, 81% of our research and development square footage, 66% of our manufacturing square footage and 7% of our warehousing square footage. Manufacturing, sales and administrative, research and development facilities and warehouse facilities have an aggregate floor space of approximately 65.8 million square feet.
We also own approximately 63% of our sales and administrative office square footage, 80% of our research and development square footage, 60% of our manufacturing square footage and 8% of our warehousing square footage. Manufacturing, sales and administrative, research and development facilities and warehouse facilities have an aggregate floor space of approximately 65.5 million square feet.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeAs of December 31, 2022 and 2021, Corning had accrued approximately $109 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.
Biggest changeAs of December 31, 2023 and 2022, Corning had accrued approximately $88 million and $109 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.
Item 3. Legal Proceedings 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 in Note 13 (Commitments, Contingencies and Guarantees) in the accompanying notes to the consolidated financial statements.
Item 3. Legal Proceedings 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 in Note 12 (Commitments, Contingencies and Guarantees) in the accompanying notes to the consolidated financial statements.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest change(c) The following table provides information about purchases of common stock during the fourth quarter of 2022: Issuer Purchases of Equity Securities Period Total number of shares purchased (1) Average price paid per share (2) Number of shares purchased as part of publicly announced programs Approximate dollar value of shares that may yet be purchased under the programs October 1-31, 2022 91,941 $ 30.11 — November 1-30, 2022 38,800 $ 32.62 — December 1-31, 2022 14,832 $ 33.91 — Total 145,573 $ 31.16 — $ 3,301,085,426 (1) This column reflects: (i) 86,443 shares of common stock related to the vesting of employee restricted stock; (ii) 58,007 shares of common stock related to the vesting of employee restricted stock units; (iii) 945 shares of common stock related to the vesting of employee performance stock units; and (iv) 178 shares of common stock related to the exercise of employee stock options and payment of the exercise price.
Biggest change(c) The following table provides information about purchases of common stock during the fourth quarter of 2023: Issuer Purchases of Equity Securities Execution date Total number of shares purchased (1) Average price paid per share (2) Number of shares purchased as part of publicly announced programs Approximate dollar value of shares that may be purchased under the publicly announced programs October 1-31, 2023 78,098 $ 29.94 — November 1-30, 2023 11,783 $ 26.70 — December 1-31, 2023 35,216 $ 29.02 — Total 125,097 $ 29.38 — $ 3,301,085,426 (1) This column reflects: (i) 94,437 shares of common stock related to the vesting of employee restricted stock; (ii) 29,894 shares of common stock related to the vesting of employee restricted stock units; and (iii) 766 shares of common stock related to the vesting of employee performance stock units.
The NYSE ticker symbol for Corning Incorporated is “GLW”. As of December 31, 2022, there were approximately 11,500 registered holders of common stock and approximately 748,000 beneficial shareholders. Information with respect to securities authorized for issuance under equity compensation plans is included herein under Item 12.
The NYSE ticker symbol for Corning Incorporated is “GLW”. As of December 31, 2023, there were approximately 11,000 registered holders of common stock and approximately 777,000 beneficial shareholders. Information with respect to securities authorized for issuance under equity compensation plans is included herein under Item 12.
Performance Graph The following graph illustrates the cumulative total shareholder return over the last five years of Corning’s common stock, the S&P 500 and the S&P Communications Equipment Companies. The graph includes the capital-weighted-performance results of those companies in the communications equipment company classification that are also included in the S&P 500. 21 Table of Contents (b) Not applicable.
Performance Graph The following graph illustrates the cumulative total shareholder return over the last five years of Corning’s common stock compared with the cumulative total return of companies on the Standard & Poor's (“S&P’s”) 500 Stock Index and the S&P Communications Equipment companies.
Added
This graph assumes the investment of $100 on December 31, 2018 and the reinvestment of all dividends since that date. 22 Table of Contents (b) Not applicable.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

98 edited+31 added−53 removed39 unchanged
Biggest changeThe following table presents the estimated increases (decreases) in future ongoing pension expense and projected benefit obligation assuming a 25 basis point change in the key assumptions for our U.S. pension plans (in millions): Change in ongoing pension expense Change in projected benefit obligation 25 basis point decrease in each spot rate $ (1 ) $ 74 25 basis point increase in each spot rate $ 1 $ (71 ) 25 basis point decrease in expected return on assets $ 7 25 basis point increase in expected return on assets $ (7 ) The above sensitivities reflect the impact of changing one assumption at a time.
Biggest changeThe following table presents our actual and expected return (loss) on assets, as well as the corresponding percentages (in millions, except percentages): December 31, 2023 2022 2021 Actual return (loss) on plan assets – Domestic plans $ 281 $ (728 ) $ 208 Expected return on plan assets – Domestic plans 176 210 209 Actual return (loss) on plan assets – International plans 10 (139 ) (2 ) Expected return on plan assets – International plans 13 9 7 Weighted-average actual and expected return on assets: Actual return (loss) on plan assets – Domestic plans 10.94 % (20.05 )% 6.17 % Expected return on plan assets – Domestic plans 6.75 % 6.00 % 6.00 % Actual return (loss) on plan assets – International plans 2.54 % (26.26 )% (0.33 )% Expected return on plan assets – International plans 3.85 % 1.64 % 1.26 % As of December 31, 2023, the Projected Benefit Obligation (“PBO”) for U.S. pension plans was $3.3 billion. 40 Table of Contents The following table presents the estimated increases (decreases) in future ongoing pension expense and projected benefit obligation assuming a 25 basis point change in the key assumptions for our U.S. pension plans (in millions): Change in ongoing pension expense Change in projected benefit obligation 25 basis point decrease in each spot rate $ (1 ) $ 76 25 basis point increase in each spot rate $ 1 $ (73 ) 25 basis point decrease in expected return on assets $ 7 25 basis point increase in expected return on assets $ (7 ) The above sensitivities reflect the impact of changing one assumption at a time.
Therefore, management utilizes constant-currency reporting for Display Technologies, Specialty Materials, Environmental Technologies and Life Sciences segments to exclude the impact from the Japanese yen, South Korean won, Chinese yuan, new Taiwan dollar and the euro, as applicable to the segment. The most significant constant-currency adjustment relates to the Japanese yen exposure within the Display Technologies segment.
Therefore, management utilizes constant-currency reporting for the Display Technologies, Specialty Materials, Environmental Technologies and Life Sciences segments to exclude the impact from the Japanese yen, South Korean won, Chinese yuan, New Taiwan dollar and euro, as applicable to the segment. The most significant constant-currency adjustment relates to the Japanese yen exposure within the Display Technologies segment.
Included in our forward exchange contracts are foreign currency hedges that hedge our cash flow and translation exposure resulting from movements in the Japanese yen, South Korean won, euro, new Taiwan dollar, Chinese yuan and British pound.
Included in our foreign exchange forward contracts and foreign exchange option contracts are foreign currency hedges that hedge our cash flow and translation exposure resulting from movements in the Japanese yen, South Korean won, New Taiwan dollar, Chinese yuan, British pound, and euro.
As a result, it is possible that our estimate of the benefits we will realize for uncertain tax positions may change when we become aware of new information affecting these judgments and estimates. 40 Table of Contents Fair value measures As required, we use two kinds of inputs to determine the fair value of assets and liabilities: observable and unobservable.
As a result, it is possible that our estimate of the benefits we will realize for uncertain tax positions may change when we become aware of new information affecting these judgments and estimates. 39 Table of Contents Fair value measures As required, we use two kinds of inputs to determine the fair value of assets and liabilities: observable and unobservable.
Some of the risks, uncertainties and other factors that could cause actual results to differ materially from those expressed in or implied by the forward-looking statements include, but are not limited to: — global economic trends, competition and geopolitical risks, or an escalation of sanctions, tariffs or other trade tensions between the U.S. and China or other countries, and related impacts on our businesses’ global supply chains and strategies; — changes in macroeconomic and market conditions and market volatility, including developments and volatility arising from the COVID-19 pandemic, inflation, interest rates, the value of securities and other financial assets, precious metals, oil, natural gas and other commodity prices and exchange rates (particularly between the U.S. dollar and the Japanese yen, new Taiwan dollar, euro, Chinese yuan and South Korean won), the availability of government incentives, decreases or sudden increases of consumer demand, and the impact of such changes and volatility on our financial position and businesses; — the duration and severity of the COVID-19 pandemic and its impact across our businesses on demand, operations, our global supply chains and stock price; — possible disruption in commercial activities or our supply chain due to terrorist activity, cyber-attack, armed conflict, political or financial instability, natural disasters, international trade disputes or major health concerns; — loss of intellectual property due to theft, cyber-attack, or disruption to our information technology infrastructure; — ability to enforce patents and protect intellectual property and trade secrets; — unanticipated disruption to Corning’s, our suppliers’ and manufacturers’ supply chain, equipment, facilities, IT systems or operations; — product demand and industry capacity; — competitive products and pricing; — availability and costs of critical components, materials, equipment, natural resources and utilities; — new product development and commercialization; — order activity and demand from major customers; — the amount and timing of our cash flows and earnings and other conditions, which may affect our ability to pay our quarterly dividend at the planned level or to repurchase shares at planned levels; — the amount and timing of any future dividends; — the effects of acquisitions, dispositions and other similar transactions; — the effect of regulatory and legal developments; — ability to pace capital spending to anticipated levels of customer demand; — our ability to increase margins through implementation of operational changes, pricing actions and cost reduction measures; — rate of technology change; — adverse litigation; — product and component performance issues; — retention of key personnel; — customer ability to maintain profitable operations and obtain financing to fund ongoing operations and manufacturing expansions and pay receivables when due; — loss of significant customers; — changes in tax laws, regulations and international tax standards; — the impacts of audits by taxing authorities; and — the potential impact of legislation, government regulations and other government action and investigations.
Some of the risks, uncertainties and other factors that could cause actual results to differ materially from those expressed in or implied by the forward-looking statements include, but are not limited to: — global economic trends, competition and geopolitical risks, or an escalation of sanctions, tariffs or other trade tensions between the U.S. and China or other countries, and related impacts on our businesses’ global supply chains and strategies; — changes in macroeconomic and market conditions and market volatility, including developments and volatility arising from health crisis events, inflation, interest rates, the value of securities and other financial assets, precious metals, oil, natural gas, raw materials and other commodity prices and exchange rates (particularly between the U.S. dollar and the Japanese yen, New Taiwan dollar, euro, Chinese yuan and South Korean won), the availability of government incentives, decreases or sudden increases of consumer demand, and the impact of such changes and volatility on our financial position and businesses; — the duration and severity of health crisis events, such as an epidemic or pandemic, and its impact across our businesses on demand, personnel, operations, our global supply chains and stock price; — possible disruption in commercial activities or our supply chain due to terrorist activity, cyber-attack, armed conflict, political or financial instability, natural disasters, international trade disputes or major health concerns; — loss of intellectual property due to theft, cyber-attack, or disruption to our information technology infrastructure; — ability to enforce patents and protect intellectual property and trade secrets; — disruption to Corning’s, our suppliers’ and manufacturers’ supply chain, equipment, facilities, IT systems or operations; — product demand and industry capacity; — competitive products and pricing; — availability and costs of critical components, materials, equipment, natural resources and utilities; — new product development and commercialization; — order activity and demand from major customers; — the amount and timing of our cash flows and earnings and other conditions, which may affect our ability to pay our quarterly dividend at the planned level or to repurchase shares at planned levels; — the amount and timing of any future dividends; — the effects of acquisitions, dispositions and other similar transactions; — the effect of regulatory and legal developments; — ability to pace capital spending to anticipated levels of customer demand; — our ability to increase margins through implementation of operational changes, pricing actions and cost reduction measures; — rate of technology change; — adverse litigation; — product and component performance issues; — retention of key personnel; — customer ability to maintain profitable operations and obtain financing to fund ongoing operations and manufacturing expansions and pay receivables when due; — loss of significant customers; — changes in tax laws, regulations and international tax standards; — the impacts of audits by taxing authorities; and — the potential impact of legislation, government regulations and other government action and investigations. 42 Table of Contents
In addition, some of our debt instruments contain a cross default provision, whereby an uncured default exceeding a specified amount on one debt obligation, also would be considered a default under the terms of another debt instrument. As of December 31, 2022, we were in compliance with all such provisions.
In addition, some of our debt instruments contain a cross default provision, whereby an uncured default exceeding a specified amount on one debt obligation, also would be considered a default under the terms of another debt instrument. As of December 31, 2023, we were in compliance with all such provisions.
As of December 31, 2022, approximately $3.3 billion remains available under our 2019 Authorization, which does not have an expiration date and may be amended or terminated by the Board of Directors at any time without prior notice.
As of December 31, 2023, approximately $3.3 billion remains available under our 2019 Authorization, which does not have an expiration date and may be amended or terminated by the Board of Directors at any time without prior notice.
Impairment of assets held for use We are required to assess the recoverability of the carrying value of long-lived assets when an indicator of impairment has been identified. We perform this review each quarter and exercises judgment in assessing whether impairment indicators are present.
Impairment of assets held for use We are required to assess the recoverability of the carrying value of long-lived assets when an indicator of impairment has been identified. We perform this review each quarter and exercise judgment in assessing whether impairment indicators are present.
The discussion and analysis of the 2021 to 2020 year-over-year changes are not included herein and can be found in the “Management’s Discussion and Analysis of Financial Conditions and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2021.
The discussion and analysis of the 2022 to 2021 year-over-year changes are not included herein and can be found in “Management’s Discussion and Analysis of Financial Conditions and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2022.
See “Items Excluded from GAAP Measures” for the descriptions of the footnoted reconciling items. 32 Table of Contents Items Excluded from GAAP Measures Items we exclude from GAAP measures to arrive at core performance measures are as follows: (1) Constant-currency adjustment : As a significant portion of revenues and expenses are denominated in currencies other than the U.S. dollar, management believes it is important to understand the impact on sales and net income of translating these currencies into U.S. dollars.
See “Items Adjusted from GAAP Measures” for the descriptions of the footnoted reconciling items. 32 Table of Contents Items Adjusted from GAAP Measures Items adjusted from GAAP measures to arrive at core performance measures are as follows: (1) Constant-currency adjustment : As a significant portion of revenues and expenses are denominated in currencies other than the U.S. dollar, management believes it is important to understand the impact on sales and net income of translating these currencies into U.S. dollars.
Note that economic factors and conditions often affect multiple assumptions simultaneously and the effects of changes in key assumptions are not necessarily linear. These changes in assumptions would have no effect on our funding requirements.
Economic factors and conditions often affect multiple assumptions simultaneously and the effects of changes in key assumptions are not necessarily linear. These changes in assumptions would have no effect on our funding requirements.
Under this program, we may issue the paper from time to time and will use the proceeds for general corporate purposes. As of December 31, 2022, we did not have outstanding commercial paper. Our $1.5 billion Revolving Credit Agreement is available to support obligations under the commercial paper program and for general corporate purposes, if needed.
Under this program, we may issue commercial paper from time to time and will use the proceeds for general corporate purposes. As of December 31, 2023, we did not have any commercial paper outstanding. Our $1.5 billion Revolving Credit Agreement is available to support obligations under the commercial paper program and for general corporate purposes, if needed.
Segment net income (loss) may not be consistent with measures used by other companies.
Segment net income may not be consistent with measures used by other companies.
Core net sales, core net income and the related per share numbers are non-GAAP financial measures utilized by our management to analyze financial performance without the impact of items that are driven by general economic conditions and events that do not reflect the underlying fundamentals and trends in our operations.
Core net sales, core net income and core earnings per share are non-GAAP financial measures utilized by our management to analyze financial performance without the impact of items that are driven by general economic conditions and events that do not reflect the underlying fundamentals and trends in our operations.
In addition, other than items discussed, there are no known material trends, favorable or unfavorable, in our capital resources and no expected material changes in the mix of such resources. Our major source of funding for 2023 and beyond will be our operating cash flow, our existing balances of cash and cash equivalents and proceeds from any issuances of debt.
In addition, other than items discussed, there are no known material trends, favorable or unfavorable, in our capital resources and no expected material changes in the mix of such resources. Our major sources of funding for 2024 and beyond will be our operating cash flow, our existing balances of cash and cash equivalents and proceeds from any issuances of debt.
NEW ACCOUNTING STANDARDS Refer to Note 1 (Summary of Significant Accounting Policies) in the accompanying notes to the consolidated financial statements. 42 Table of Contents FORWARD-LOOKING STATEMENTS The statements in this Annual Report on Form 10-K, in reports subsequently filed by Corning with the Securities and Exchange Commission (“SEC”) on Form 10-Q and Form 8-K and related comments by management that are not historical facts or information and contain words such as “will,” “believe,” “anticipate,” “expect,” “intend,” “plan,” “seek,” “see,” “would,” and “target” and similar expressions are forward-looking statements.
NEW ACCOUNTING STANDARDS Refer to Note 1 (Summary of Significant Accounting Policies) in the accompanying notes to the consolidated financial statements. 41 Table of Contents FORWARD-LOOKING STATEMENTS The statements in this Annual Report on Form 10-K, in reports subsequently filed by Corning with the Securities and Exchange Commission (“SEC”) on Forms 10-Q and 8-K and related comments by management that are not historical facts or information and contain words such as “will,” “believe,” “anticipate,” “expect,” “intend,” “plan,” “seek,” “see,” “would,” “target,” “estimate,” “forecast” or similar expressions are forward-looking statements.
Our cash and cash equivalents are held in various locations throughout the world and are generally unrestricted. We utilize a variety of strategies to ensure that our worldwide cash is available in the locations in which it is needed. As of December 31, 2022, approximately 56% of the consolidated cash and cash equivalents were held outside the U.S.
Our cash and cash equivalents are held in various locations throughout the world and are generally unrestricted. We utilize a variety of strategies to ensure that our worldwide cash is available in the locations in which it is needed. As of December 31, 2023, approximately 60% of the consolidated cash and cash equivalents were held outside the U.S.
Common Stock Dividends During the years ended December 31, 2022, 2021 and 2020, total dividends paid to common shareholders were $932 million, $871 million and $787 million, respectively. The Board’s decision to declare and pay future dividends will depend on our income and liquidity position, among other factors.
Common Stock Dividends During the years ended December 31, 2023, 2022 and 2021, total dividends paid to common shareholders were $989 million, $932 million and $871 million, respectively. The Board’s decision to declare and pay future dividends will depend on our income and liquidity position, among other factors.
Refer to Note 1 (Summary of Significant Accounting Policies) and Note 4 (Revenue) in the accompanying notes to the consolidated financial statements for additional information. Uses of Cash Fixed Rate Cumulative Convertible Preferred Stock, Series A We had 2,300 outstanding shares of Fixed Rate Cumulative Convertible Preferred Stock, Series A (the “Preferred Stock”) as of December 31, 2020.
Refer to Note 1 (Summary of Significant Accounting Policies) and Note 3 (Revenue) in the accompanying notes to the consolidated financial statements for additional information. 36 Table of Contents Uses of Cash Fixed Rate Cumulative Convertible Preferred Stock, Series A We had 2,300 outstanding shares of Fixed Rate Cumulative Convertible Preferred Stock, Series A (the “Preferred Stock”) as of December 31, 2020.
We expect to declare quarterly dividends and fund payments with cash from operations. On February 8, 2023, our Board of Directors declared a quarterly dividend of $0.28 per share of common stock, beginning with the dividend paid in the first quarter of 2023. The dividend will be payable on March 30, 2023.
We expect to declare quarterly dividends and fund payments with cash from operations. On February 7, 2024, our Board of Directors declared a quarterly dividend of $0.28 per share of common stock, beginning with the dividend paid in the first quarter of 2024. The dividend will be payable on March 28, 2024.
In estimating these amounts, we must exercise judgment around factors such as the weighting of the tax law in our favor, the willingness of a tax authority to aggressively pursue an opposing position, or alternatively, consider a negotiated compromise, and our willingness to dispute a tax authorities’ assertion to the level of appeal we believe is required to sustain our position.
In estimating these amounts, we must exercise judgment around factors such as the weighting of the tax law in our favor or alternatively, consider a negotiated compromise, and our willingness to dispute a tax authorities’ assertion to the level of appeal we believe is required to sustain our position.
These categories use observable inputs only and are measured using a market approach based on quoted prices in markets considered active or in markets in which there are few transactions. Derivative assets and liabilities may include interest rate swaps and forward exchange contracts that are measured using observable quoted prices for similar assets and liabilities.
These categories use observable inputs only and are measured using a market approach based on quoted prices in markets considered active or in markets in which there are few transactions. Derivative assets and liabilities may include foreign exchange forward contracts and foreign exchange option contracts that are measured using observable quoted prices for similar assets and liabilities.
Our Revolving Credit Agreement includes affirmative and negative covenants with which we must comply, including a leverage (debt to capital ratio) financial covenant. The required leverage ratio is a maximum of 60%. As of December 31, 2022, our leverage using this measure was approximately 36%. As of December 31, 2022, we were in compliance.
Our Revolving Credit Agreement includes affirmative and negative covenants with which we must comply, including a leverage (debt to capital ratio) financial covenant. The required leverage ratio is a maximum of 60%. As of December 31, 2023, our leverage using this measure was approximately 39%. As of December 31, 2023, we were in compliance with all such covenants.
By utilizing these types of programs, we have accelerated the collection of $1.6 billion and $0.6 billion of accounts receivable cumulatively throughout the years ended December 31, 2022 and 2021, respectively.
By utilizing these types of programs, we have accelerated the collection of $1.5 billion and $1.6 billion of accounts receivable cumulatively throughout the years ended December 31, 2023 and 2022, respectively.
Refer to Note 16 (Shareholders’ Equity) in the accompanying notes to the consolidated financial statements for additional information. 36 Table of Contents Stock Repurchases In 2019, the Board authorized the repurchase of up to $5.0 billion of additional common stock upon the completion of the 2018 repurchase plan (“2019 Authorization”).
Refer to Note 14 (Shareholders’ Equity) in the accompanying notes to the consolidated financial statements for additional information. Share Repurchases In 2019, the Board authorized the repurchase of up to $5.0 billion of additional common stock upon the completion of the 2018 repurchase plan (“2019 Authorization”).
(9) Gain (loss) on investments : Amount reflects the gain or loss recognized on investment due to mark-to-mark adjustments for the change in fair value or the disposition of the investment. (10) Gain on sale of business : Amount reflects the gain recognized for the sale of a business.
(9) Gain on investments : Amount reflects the gain or loss recognized on investment due to mark-to-market adjustments for the change in fair value or the disposition of the investment. (10) Gain on sale of assets : Amount represents the gain recognized for the sale of assets.
See “Items Excluded from GAAP Measures” for the descriptions of the footnoted reconciling items. 31 Table of Contents The following tables reconcile our non-GAAP financial measures to their most directly comparable GAAP financial measure (amounts in millions except percentages and per share amounts): Year ended December 31, 2022 Net income Income attributable Effective Net before to Corning tax Per sales income taxes Incorporated rate (a)(b) share As reported - GAAP $ 14,189 $ 1,797 $ 1,316 22.9 % $ 1.54 Constant-currency adjustment (1) 616 480 369 0.43 Translation gain on Japanese yen-denominated debt (2) (191 ) (146 ) (0.17 ) Translated earnings contract gain, net (3) (348 ) (267 ) (0.31 ) Acquisition-related costs (4) 140 109 0.13 Discrete tax items and other tax-related adjustments (5) 84 0.10 Restructuring, impairment and other charges and credits (6) 414 316 0.37 Litigation, regulatory and other legal matters (7) 100 77 0.09 Pension mark-to-market adjustment (8) 11 10 0.01 Gain on investments (9) (8 ) (8 ) (0.01 ) Gain on sale of business (10) (53 ) (41 ) (0.05 ) Contingent consideration (11) (32 ) (25 ) (0.03 ) Core performance measures $ 14,805 $ 2,310 $ 1,794 19.3 % $ 2.09 (a) Based upon statutory tax rates in the specific jurisdiction for each event.
Year ended December 31, 2022 Net income Income attributable Effective Net before to Corning tax Per sales income taxes Incorporated rate (a)(b) share As reported - GAAP $ 14,189 $ 1,797 $ 1,316 22.9 % $ 1.54 Constant-currency adjustment (1) 616 480 369 0.43 Translation gain on Japanese yen-denominated debt (2) (191 ) (146 ) (0.17 ) Translated earnings contract gain (3) (348 ) (267 ) (0.31 ) Acquisition-related costs (4) 140 109 0.13 Discrete tax items and other tax-related adjustments (5) 84 0.10 Restructuring, impairment and other charges and credits (6) 414 316 0.37 Litigation, regulatory and other legal matters (7) 100 77 0.09 Pension mark-to-market adjustment (8) 11 10 0.01 Gain on investments (9) (8 ) (8 ) (0.01 ) Gain on sale of business (11) (53 ) (41 ) (0.05 ) Contingent consideration (12) (32 ) (25 ) (0.03 ) Core performance measures $ 14,805 $ 2,310 $ 1,794 19.3 % $ 2.09 (a) Based upon statutory tax rates in the specific jurisdiction for each event.
Our off balance sheet arrangements include guarantee and indemnity contracts. At the time a guarantee is issued, we are required to recognize a liability for the fair value or market value of the obligation it assumes. In the normal course of our business, we do not routinely provide significant third-party guarantees.
At the time a guarantee is issued, we are required to recognize a liability for the fair value or market value of the obligation it assumes. In the normal course of our business, we do not routinely provide significant third-party guarantees.
(b) The calculation of the effective tax rate excludes net income attributable to non-controlling interest of $70 million.
(b) The calculation of the effective tax rate GAAP and Core excludes net income attributable to non-controlling interest of approximately $70 million.
Refer to Note 13 (Commitments, Contingencies and Guarantees) in the accompanying notes to the consolidated financial statements for additional information. ENVIRONMENT Refer to Item 3.
Refer to Note 12 (Commitments, Contingencies and Guarantees) in the accompanying notes to the consolidated financial statements for additional information. ENVIRONMENT Refer to Item 3. Legal Proceedings or Note 12 (Commitments, Contingencies and Guarantees) in the accompanying notes to the consolidated financial statements for information.
During the years ended December 31, 2022 and 2021, cash flows provided by operating activities were $2.6 billion and $3.4 billion, respectively.
During the years ended December 31, 2023 and 2022, cash flows provided by operating activities were $2.0 billion and $2.6 billion, respectively.
Immediately following the conversion, we repurchased and retired 35 million of the common shares held by SDC for an aggregate purchase price of approximately $1.5 billion, of which approximately $507 million was paid on both April 8, 2022 and 2021. The remaining payment of approximately $507 million will be paid on April 8, 2023.
Immediately following the conversion, we 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 in April in each of 2023, 2022 and 2021.
Constant-currency rates are as follows and are applied to all periods presented: Currency Japanese yen Korean won Chinese yuan New Taiwan dollar Euro Rate ¥107 ₩1,175 ¥6.7 NT$31 €.81 (2) Translation of Japanese yen-denominated debt : Amount reflects the gain or loss on the translation of our yen-denominated debt to U.S. dollars.
Constant-currency rates are as follows and are applied to all periods presented and to all foreign exchange exposures during the period, even though we may be less than 100% hedged: Currency Japanese yen Korean won Chinese yuan New Taiwan dollar Euro Rate ¥107 ₩1,175 ¥6.7 NT$31 €.81 (2) Translation of Japanese yen-denominated debt : Amount reflects the gain or loss on the translation of our yen-denominated debt to U.S. dollars.
The following table presents balance sheet and working capital measures (in millions): December 31, 2022 2021 Working capital $ 2,278 $ 2,853 Current ratio 1.4:1 1.6:1 Trade accounts receivable, net of doubtful accounts $ 1,721 $ 2,004 Days sales outstanding 45 49 Inventories $ 2,904 $ 2,481 Inventory turns 3.4 3.7 Days payable outstanding (1) 52 50 Long-term debt $ 6,687 $ 6,989 Total debt $ 6,911 $ 7,044 Total debt to total capital 36 % 36 % (1) Includes trade payables only.
The following table presents balance sheet and working capital measures (in millions): December 31, 2023 2022 Working capital $ 2,893 $ 2,278 Current ratio 1.7:1 1.4:1 Trade accounts receivable, net of doubtful accounts $ 1,572 $ 1,721 Days sales outstanding 47 45 Inventories $ 2,666 $ 2,904 Inventory turns 3.2 3.4 Days payable outstanding (1) 52 52 Long-term debt $ 7,206 $ 6,687 Total debt $ 7,526 $ 6,911 Total debt to total capital 39 % 36 % (1) Includes trade payables only.
We believe we have sufficient liquidity to fund operations, acquisitions, capital expenditures, scheduled debt repayments, dividend payments and share repurchase programs through 2023. We will continue to generate cash from operations and maintain access to our revolving credit facilities and commercial paper programs as discussed in more detail below.
We believe we have sufficient liquidity to fund operations and meet our obligations for the foreseeable future. Such obligations include requirements for acquisitions, capital expenditures, debt repayments, dividend payments and share repurchase programs. We will continue to generate cash from operations and maintain access to our revolving credit facilities and commercial paper programs as discussed in more detail below.
Examples of events or circumstances that may be indicative of impairments include, but are not limited to: • A significant decrease in the market price of an asset; • A significant change in the use of a long-lived asset or 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 more than 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. 39 Table of Contents For purposes of recognition and measurement of an impairment loss, a long-lived asset or assets is grouped with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities.
Precious metals are only acquired to support our operations and are not held for trading or other non-manufacturing related purposes. 38 Table of Contents Examples of events or circumstances that may be indicative of impairments include, but are not limited to: • A significant decrease in the market price of an asset; • A significant change in the use of a long-lived asset or 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 more than 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.
In addition to the common shares repurchased under the SRA, as discussed above, we repurchased 6.0 million and 7.3 million shares of common stock under our 2019 Authorization for approximately $221 million and $274 million, respectively, during the years ended December 31, 2022 and 2021, respectively.
In addition to the common shares repurchased under the SRA, as discussed above, we repurchased 6.0 million shares of common stock under our 2019 Authorization for approximately $221 million, respectively, during the year ended December 31, 2022. No shares were repurchased under our 2019 Authorization during the year ended December 31, 2023.
In arriving at the fair value of our derivative assets and liabilities, we have considered the appropriate valuation and risk criteria, including such factors as credit risk of the relevant party to the transaction. Amounts related to credit risk are not material.
In arriving at the fair value of our derivative assets and liabilities, we have considered the appropriate valuation and risk criteria, including such factors as credit risk of the relevant party to the transaction. Amounts related to credit risk are not material. Refer to Note 13 (Financial Instruments) in the accompanying notes to the consolidated financial statements for additional information.
Hemlock and Emerging Growth Businesses The increase was primarily driven by HSG due to higher solar prices. 29 Table of Contents CORE PERFORMANCE MEASURES In managing the Company and assessing our financial performance, we adjust certain measures provided by our consolidated financial statements to exclude specific items to arrive at our core performance measures.
Hemlock and Emerging Growth Businesses The decrease was primarily driven by our HSG and Pharmaceutical Technologies businesses due to lower sales, as outlined above. 29 Table of Contents CORE PERFORMANCE MEASURES In managing the Company and assessing our financial performance, we adjust certain measures included in our consolidated financial statements to exclude specific items to arrive at our core performance measures.
Of these amounts, we believe $1.2 billion and $0.4 billion would have been collected during the normal course of business within 2022 and 2021, respectively. 34 Table of Contents Cash Flows The following table presents a summary of cash flow data (in millions): Year ended December 31, 2022 2021 Net cash provided by operating activities $ 2,615 $ 3,412 Net cash used in investing activities $ (1,355 ) $ (1,419 ) Net cash used in financing activities $ (1,649 ) $ (2,452 ) Net cash provided by operating activities decreased by $797 million for the year ended December 31, 2022, when compared to the same period in the prior year, primarily driven by the decrease in net income.
Of these amounts, we believe $1.2 billion would have been collected during the normal course of business within each year ended December 31, 2023 and 2022. 34 Table of Contents Cash Flows The following table presents a summary of cash flow data (in millions): Year ended December 31, 2023 2022 Net cash provided by operating activities $ 2,005 $ 2,615 Net cash used in investing activities $ (1,000 ) $ (1,355 ) Net cash used in financing activities $ (883 ) $ (1,649 ) Net cash provided by operating activities decreased by $610 million for the year ended December 31, 2023, when compared to the same period in the prior year, primarily driven by the decrease in net income partially offset by improvements in working capital, mostly due to the reduction in inventory levels.
We believe investors should consider these non-GAAP measures in evaluating our results as they are more indicative of our core operating performance and how management evaluates our operational results and trends. These measures are not, and should not be viewed as a substitute for, GAAP reporting measures.
We provide investors with these non-GAAP measures to evaluate our results as we believe they are indicative of our core operating performance and provide greater transparency to how management evaluates our results and trends and makes financial and operational decisions. These measures are not, and should not be viewed as a substitute for, GAAP reporting measures.
(6) Restructuring, impairment and other charges and credits : Amount reflects certain restructuring, impairment losses and other charges and credits, as well as other expenses, primarily accelerated depreciation and asset write-offs, which are not related to ongoing operations.
(6) Restructurin g, impairment and other charges and credits : Amount reflects certain restructuring, impairment losses and other charges and credits, as well as other expenses, including severance, accelerated depreciation, asset write-offs and facility repairs resulting from power outages, which are not related to ongoing operations.
As of December 31, 2022, our cash and cash equivalents and available credit capacity included (in millions): December 31, 2022 Cash and cash equivalents $ 1,671 Available credit capacity: U.S. dollar revolving credit facility $ 1,500 Japanese yen liquidity facility $ 191 Chinese yuan facilities $ 321 Cash and Cash Equivalents We ended 2022 with $1.7 billion of cash and cash equivalents.
As of December 31, 2023, our cash and cash equivalents and available credit capacity included (in millions): December 31, 2023 Cash and cash equivalents $ 1,779 Available credit capacity: U.S. dollar revolving credit facility $ 1,500 Chinese yuan facilities $ 110 Cash and Cash Equivalents We ended 2023 with $1.8 billion of cash and cash equivalents.
The following table sets forth the computation of core basic and core diluted earnings per common share (in millions, except per share amounts): Year ended December 31, 2022 2021 Core net income attributable to Corning Incorporated $ 1,794 $ 1,811 Less: Series A convertible preferred stock dividend 24 Core net income available to common shareholders - basic 1,794 1,787 Plus: Series A convertible preferred stock dividend 24 Core net income available to common shareholders - diluted $ 1,794 $ 1,811 Weighted-average common shares outstanding - basic 843 828 Effect of dilutive securities: Stock options and other dilutive securities 14 16 Series A convertible preferred stock 31 Weighted-average common shares outstanding - diluted 857 875 Core basic earnings per common share $ 2.13 $ 2.16 Core diluted earnings per common share $ 2.09 $ 2.07 RECONCILIATION OF NON-GAAP MEASURES We utilize certain financial measures and key performance indicators that are not calculated in accordance with GAAP to assess our financial and operating performance.
The following table sets forth the computation of core earnings per share (in millions, except per share amounts): Year ended December 31, 2023 2022 Core net income $ 1,463 $ 1,794 Weighted-average common shares outstanding - basic 848 843 Effect of dilutive securities: Stock options and other awards 11 14 Weighted-average common shares outstanding - diluted 859 857 Core earnings per share $ 1.70 $ 2.09 RECONCILIATION OF NON-GAAP MEASURES We utilize certain financial measures and key performance indicators that are not calculated in accordance with GAAP to assess our financial and operating performance.
This requires us to make estimates and assumptions that affect reported amounts and related disclosures. Actual results could differ from those estimates. The following estimates are considered by management to be the most critical to the understanding of the consolidated financial statements as they require significant judgments that could materially impact our results of operations, financial position and cash flows.
The following estimates are considered by management to be the most critical to the understanding of the consolidated financial statements as they require significant judgments that could materially impact our results of operations, financial position and cash flows.
Although the Company believes that these forward-looking statements are based upon reasonable assumptions regarding, among other things, current estimates and forecasts, general economic conditions, its knowledge of its business and key performance indicators that impact the Company, actual results could differ materially.
Although the Company believes that these forward-looking statements are based upon reasonable assumptions regarding, among other things, current estimates and forecasts, general economic conditions, its knowledge of its business and key performance indicators that impact the Company, there can be no assurance that these forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements.
The following table provides detailed information on the impact of translated earnings contracts gain, net for the years ended December 31, 2022 and 2021 (in millions): Income before tax Net income Income before tax Net income Income before tax Net income 2022 2021 2022 vs. 2021 Hedges related to translated earnings: Realized gain, net (1) $ 320 $ 245 $ 47 $ 36 $ 273 $ 209 Unrealized gain, net (2) 31 24 307 237 (276 ) (213 ) Total translated earnings contract gain, net $ 351 $ 269 $ 354 $ 273 $ (3 ) $ (4 ) (1) For the years ended December 31, 2022 and 2021, includes pre-tax realized gains of $20 million and pre-tax realized losses of $20 million, respectively, related to the expiration of option contracts.
The following table provides detailed information on the impact of translated earnings contract gain, net (in millions): Income before tax Net income Income before tax Net income Income before tax Net income 2023 2022 2023 vs. 2022 Hedges related to translated earnings: Realized gain, net (1) (2) $ 247 $ 198 $ 320 $ 245 $ (73 ) $ (47 ) Unrealized (loss) gain, net (3) (86 ) (68 ) 31 24 (117 ) (92 ) Total translated earnings contract gain, net $ 161 $ 130 $ 351 $ 269 $ (190 ) $ (139 ) (1) For the years ended December 31, 2023 and 2022, amount includes pre-tax realized losses of $68 million and pre-tax realized gains of $20 million, respectively, related to the expiration of option contracts.
This review considers all our precious metals that are either in place in the production process; in reclamation, fabrication, or refinement in anticipation of re-use; or awaiting use to support increased capacity. Precious metals are only acquired to support our operations and are not held for trading or other non-manufacturing related purposes.
This review considers all our precious metals that are either in place in the production process; in reclamation, fabrication, or refinement in anticipation of re-use; or awaiting use to support increased capacity.
We have access to certain unsecured variable rate loan facilities, with an aggregate capacity of 4,645 million Chinese yuan, equivalent to approximately $673 million, whose proceeds are used for capital investment and general corporate purposes. As of December 31, 2022 and 2021, these facilities had variable rates ranging from 3.3% to 4.3% and maturities ranging from 2023 to 2032.
We have access to certain Chinese yuan-denominated unsecured variable rate loan facilities, whose proceeds are used for capital investment and general corporate purposes. As of December 31, 2023, borrowings totaled $293 million and these facilities had variable interest rates ranging from 3.2% to 4.1% and maturities ranging from 2024 to 2032.
During the year ended December 31, 2022, we distributed approximately $534 million from foreign subsidiaries to their respective U.S. parent companies. As of December 31, 2022, Corning has approximately $1.3 billion of indefinitely reinvested foreign earnings.
During the year ended December 31, 2023, the Company distributed an immaterial amount from foreign subsidiaries to their respective U.S. parent companies. As of December 31, 2023, Corning had approximately $1.4 billion of indefinitely reinvested foreign earnings.
The U.S. enacted the Inflation Reduction Act of 2022 (“IRA”) in August 2022, which, among other sections, creates a new book minimum tax of at least 15% of consolidated pre-tax income for corporations with average book income in excess of $1 billion. This provision of the IRA will first apply to the Company in 2024.
The U.S. enacted the Inflation Reduction Act of 2022 (“IRA”) in August 2022, which, among other sections, creates a new book minimum tax of at least 15% of consolidated pre-tax income for corporations with average book income in excess of $1 billion. The IRA also provides credit incentives to taxpayers based on the type and amount of manufacturing activity performed.
We account for uncertain tax positions in accordance with ASC Topic 740, Income Taxes, which requires that companies only record tax benefits for technical positions that are believed to have a greater than 50% likelihood of being sustained on their technical merits and then only to the extent of the amount of tax benefit that is greater than 50% likely of being realized upon settlement.
We record uncertain tax positions only when they are believed to have a less than 50% likelihood of being sustained on their technical merits and then only to the extent of the amount of tax benefit that is less than 50% likely of being realized upon settlement.
Research, Development and Engineering Expenses Research, development and engineering expenses increased by $52 million, or 5%, and were consistent as a percentage of sales when compared to 2021. 25 Table of Contents Translated earnings contract gain, net Included in translated earnings contract gain, net, is the impact of foreign currency contracts which economically hedge the translation exposure arising from movements in the Japanese yen, South Korean won, new Taiwan dollar, euro, Chinese yuan and British pound and its impact on net income.
Translated earnings contract gain, net Included in translated earnings contract gain, net, is the impact of foreign currency contracts which economically hedge the translation exposure arising from movements in the Japanese yen, South Korean won, New Taiwan dollar, euro, Chinese yuan and British pound and its impact on net income.
Inherent in this estimation process is the requirement for us to estimate future book and taxable income and possible tax planning strategies. These estimates require us to exercise judgment about our future results, the prudence and feasibility of possible tax planning strategies and the economic environments in which we do business.
Income taxes We are required to exercise judgment about our future results in assessing the realizability of our deferred tax assets. Inherent in this estimation process is the requirement for us to estimate future book and taxable income and possible tax planning strategies.
The Company utilizes constant-currency reporting for Display Technologies, Specialty Materials, Environmental Technologies and Life Sciences segments for the Japanese yen, Korean won, Chinese yuan, New Taiwan dollar and Euro, as applicable to the segment.
The Company utilizes constant-currency reporting for Display Technologies, Specialty Materials, Environmental Technologies and Life Sciences segments for the Japanese yen, Korean won, Chinese yuan, New Taiwan dollar and euro, as applicable to the segment. The constant-currency rates established for our core performance measures are internally derived long-term management estimates, which are closely aligned with our hedging instrument rates.
The following table presents segment net sales by reportable segment and Hemlock and Emerging Growth Businesses (in millions): Year ended December 31, $ change % change 2022 2021 22 vs. 21 22 vs. 21 Optical Communications $ 5,023 $ 4,349 $ 674 15 % Display Technologies 3,306 3,700 (394 ) (11 )% Specialty Materials 2,002 2,008 (6 ) 0 % Environmental Technologies 1,584 1,586 (2 ) 0 % Life Sciences 1,228 1,234 (6 ) 0 % Net sales of reportable segments 13,143 12,877 266 2 % Hemlock and Emerging Growth Businesses 1,662 1,243 419 34 % Net sales of reportable segments and Hemlock and Emerging Growth Businesses (1) $ 14,805 $ 14,120 $ 685 5 % (1) Refer to Note 19 (Reportable Segments) in the accompanying notes to the consolidated financial statements for the reconciliation to consolidated net sales.
The following table presents segment net sales by reportable segment and Hemlock and Emerging Growth Businesses (in millions): Year ended December 31, $ change % change 2023 2022 23 vs. 22 23 vs. 22 Optical Communications $ 4,012 $ 5,023 $ (1,011 ) (20 )% Display Technologies 3,532 3,306 226 7 % Specialty Materials 1,865 2,002 (137 ) (7 )% Environmental Technologies 1,766 1,584 182 11 % Life Sciences 959 1,228 (269 ) (22 )% Net sales of reportable segments 12,134 13,143 (1,009 ) (8 )% Hemlock and Emerging Growth Businesses 1,446 1,662 (216 ) (13 )% Net sales of reportable segments and Hemlock and Emerging Growth Businesses (1) $ 13,580 $ 14,805 $ (1,225 ) (8 )% (1) Refer to Note 17 (Reportable Segments) in the accompanying notes to the consolidated financial statements for the reconciliation to consolidated net sales.
Net cash used in investing activities decreased by $64 million for the year ended December 31, 2022, when compared to the same period last year, primarily driven by an increase in realized gains on translated earnings contracts of $233 million.
Net cash used in investing activities improved by $355 million for the year ended December 31, 2023, when compared to the same period last year, primarily driven by lower capital expenditures of $214 million, lower premiums paid on hedging contracts of $66 million and higher realized gains on translated earnings contracts of $26 million.
Capital Expenditures Capital expenditures were $1.6 billion, $1.6 billion and $1.4 billion during the years ended December 31, 2022, 2021 and 2020, respectively. We continue to invest in capacity expansions and new product lines across our businesses. We expect our 2023 capital expenditures to be consistent with 2022.
Capital Expenditures Capital expenditures were $1.4 billion, $1.6 billion and $1.6 billion during the years ended December 31, 2023, 2022 and 2021, respectively. We expect our 2024 capital expenditures to be lower than 2023.
These instruments had a gross notional value outstanding as of December 31, 2022 and 2021 of $2.1 billion and $1.2 billion, respectively. Off Balance Sheet Arrangements Off balance sheet arrangements are transactions, agreements, or other contractual arrangements with an unconsolidated entity for which we have an obligation to the entity that is not recorded in our consolidated financial statements.
Off Balance Sheet Arrangements Off balance sheet arrangements are transactions, agreements, or other contractual arrangements with an unconsolidated entity for which we have an obligation to the entity that is not recorded in our consolidated financial statements. Our off balance sheet arrangements include guarantee and indemnity contracts.
Provision for Income Taxes For the year ended December 31, 2022, the effective tax rate differed from the U.S. statutory rate of 21% primarily due to the following: • A net provision of $67 million due to changes in tax reserves; • A net provision of $40 million due to differences arising from foreign earnings; and • A net provision of $38 million due to changes in valuation allowance assessments, offset by • A net benefit of $60 million due to tax credits; and • A net benefit of $49 million due to foreign derived intangible income.
Provision for Income Taxes For the year ended December 31, 2023, the effective tax rate differed from the U.S. statutory rate of 21% primarily due to tax credits generated, non-taxable items, foreign derived intangible income and stock compensation windfall deductions, partially offset by changes in valuation allowance assessments, non-deductible items and tax reserves.
(13) Bond redemption loss : Amount reflects premiums on redemption of debentures. 33 Table of Contents LIQUIDITY AND CAPITAL RESOURCES Our financial condition and liquidity are strong. We are not aware of any known trends, demands, commitments, events or uncertainties that will result in or that are reasonably likely to result in a material decrease in our liquidity.
We are not aware of any known trends, demands, commitments, events or uncertainties that will result in or that are reasonably likely to result in a material decrease in our liquidity.
Note that economic factors and conditions often affect multiple assumptions simultaneously and the effects of changes in key assumptions are not necessarily linear.
Economic factors and conditions often affect multiple assumptions simultaneously and the effects of changes in key assumptions are not necessarily linear. Refer to Note 11 (Employee Retirement Plans) in the accompanying notes to the consolidated financial statements for additional information.
Our MD&A is organized as follows: • Overview • Results of Operations • Segment Analysis • Core Performance Measures • Liquidity and Capital Resources • Environment • Critical Accounting Estimates • New Accounting Standards • Forward-Looking Statements OVERVIEW We introduced our 2020-to-2023 Strategy & Growth Framework with a focus on capturing opportunities to sell more Corning content through each of our Market-Access Platforms.
Our MD&A is organized as follows: • Overview • Results of Operations • Segment Analysis • Core Performance Measures • Liquidity and Capital Resources • Environment • Critical Accounting Estimates • New Accounting Standards • Forward-Looking Statements OVERVIEW Corning is vital to progress – in the industries we help advance and in the world we share.
Selling, General and Administrative Expenses Selling, general and administrative expenses increased by $71 million, or 4%, and were consistent as a percentage of sales when compared to 2021.
Selling, general and administrative expenses decreased by $55 million, or 3%, and increased as a percentage of net sales when compared to 2022, primarily due to the decline in net sales.
The activity during 2022 primarily relates to capacity optimization for Display Technologies, Specialty Materials and an emerging growth business and severance charges across all segments. The activity in 2021 primarily relates to asset write-offs and charges for facility repairs resulting from the impact of power outages; the Company is pursuing recoveries under its applicable property insurance policies.
The activity during 2023 primarily relates to asset write-offs associated with the exit of certain facilities and product lines and severance charges across all segments. The activity in 2022 primarily relates to capacity optimization for Display Technologies, Specialty Materials and an emerging growth business and severance charges across all segments.
Optical Communications The increase in segment net income was primarily driven by the increases in sales, outlined above, partially offset by higher inflationary costs and manufacturing costs. Display Technologies The decrease in segment net income was primarily driven by the lower glass volume, impacting sales, as outlined above.
Optical Communications The decrease in segment net income was primarily driven by a decline in sales volume, as outlined above, partially offset by improvements from pricing and productivity actions.
In making determinations of likely outcomes of litigation matters, we consider the evaluation of legal counsel knowledgeable about each matter, case law and other case-specific issues. Refer to Item 3. Legal Proceedings or Note 13 (Commitments, Contingencies and Guarantees) in the accompanying notes to the consolidated financial statements for a discussion of Corning’s material litigation matters.
Legal Proceedings or Note 12 (Commitments, Contingencies and Guarantees) in the accompanying notes to the consolidated financial statements for a discussion of Corning’s material litigation matters.
RESULTS OF OPERATIONS The following table presents selected highlights from our operations (in millions): Year ended December 31, % change 2022 2021 22 vs. 21 Net sales $ 14,189 $ 14,082 1 % Gross margin $ 4,506 $ 5,063 (11 %) (gross margin %) 32 % 36 % Selling, general and administrative expenses $ 1,898 $ 1,827 4 % (as a % of net sales) 13 % 13 % Research, development and engineering expenses $ 1,047 $ 995 5 % (as a % of net sales) 7 % 7 % Translated earnings contract gain, net $ 351 $ 354 (1 %) (as a % of net sales) 2 % 3 % Income before income taxes $ 1,797 $ 2,426 (26 %) (as a % of net sales) 13 % 17 % Provision for income taxes $ (411 ) $ (491 ) 16 % Effective tax rate 23 % 20 % Net income attributable to Corning Incorporated $ 1,316 $ 1,906 (31 %) (as a % of net sales) 9 % 14 % Comprehensive income attributable to Corning Incorporated $ 661 $ 1,471 (55 %) 24 Table of Contents Net Sales Net sales for the year ended December 31, 2022 increased by $107 million, or 1%, when compared to the same period in 2021.
Therefore, as we expect our markets to normalize in the midterm, we believe we are well-positioned with the production capacity and technical capabilities necessary to capture this growth opportunity and deliver powerful incremental profit and cash to our shareholders. 2024 Corporate Outlook We expect core net sales of approximately $3.1 billion for the first quarter of 2024. 24 Table of Contents RESULTS OF OPERATIONS The following table presents selected highlights from our operations (in millions): Year ended December 31, % change 2023 2022 23 vs. 22 Net sales $ 12,588 $ 14,189 (11 %) Cost of sales $ 8,657 $ 9,683 (11 %) Gross margin $ 3,931 $ 4,506 (13 %) Gross margin % 31 % 32 % Selling, general and administrative expenses $ 1,843 $ 1,898 (3 %) as a % of net sales 15 % 13 % Research, development and engineering expenses $ 1,076 $ 1,047 3 % as a % of net sales 9 % 7 % Translated earnings contract gain, net $ 161 $ 351 (54 %) Income before income taxes $ 816 $ 1,797 (55 %) Provision for income taxes $ (168 ) $ (411 ) 59 % Effective tax rate 20.6 % 22.9 % Net income attributable to Corning Incorporated $ 581 $ 1,316 (56 %) Comprehensive income attributable to Corning Incorporated $ 363 $ 661 (45 %) Net Sales Net sales for the year ended December 31, 2023 decreased by $1.6 billion, or 11%, when compared to the same period in 2022.
Year ended December 31, 2021 Net income Income attributable Effective Net before to Corning tax Per sales income taxes Incorporated rate (a)(b) share As reported - GAAP $ 14,082 $ 2,426 $ 1,906 20.2 % $ 1.28 Preferred stock redemption (c) 0.90 Subtotal 14,082 2,426 1,906 20.2 % 2.18 Constant-currency adjustment (1) 38 87 76 0.09 Translation gain on Japanese yen-denominated debt (2) (180 ) (138 ) (0.16 ) Translated earnings contract gain, net (3) (354 ) (273 ) (0.32 ) Acquisition-related costs (4) 159 123 0.15 Discrete tax items and other tax-related adjustments (5) (24 ) (0.03 ) Restructuring, impairment and other charges and credits (6) 110 78 0.09 Litigation, regulatory and other legal matters (7) 16 27 0.03 Pension mark-to-market adjustment (8) 32 25 0.03 Loss on investments (9) 23 17 0.02 Gain on sale of business (10) (54 ) (46 ) (0.05 ) Preferred stock conversion (12) 17 17 0.02 Bond redemption loss (13) 31 23 0.03 Core performance measures $ 14,120 $ 2,313 $ 1,811 20.4 % $ 2.07 (a) Based upon statutory tax rates in the specific jurisdiction for each event.
See “Items Adjusted from GAAP Measures” for the descriptions of the footnoted reconciling items. 31 Table of Contents The following tables reconcile our non-GAAP financial measures to their most directly comparable GAAP financial measure (amounts in millions, except percentages and per share amounts): Year ended December 31, 2023 Net income Income attributable Effective Net before to Corning tax Per sales income taxes Incorporated rate (a)(b) share As reported - GAAP $ 12,588 $ 816 $ 581 20.6 % $ 0.68 Constant-currency adjustment (1) 992 744 550 0.64 Translation gain on Japanese yen-denominated debt (2) (100 ) (81 ) (0.09 ) Translated earnings contract gain (3) (161 ) (130 ) (0.15 ) Acquisition-related costs (4) 131 90 0.10 Discrete tax items and other tax-related adjustments (5) 34 0.04 Restructuring, impairment and other charges and credits (6) 471 378 0.44 Litigation, regulatory and other legal matters (7) 61 54 0.06 Pension mark-to-market adjustment (8) 15 12 0.01 Gain on investments (9) (10 ) (10 ) (0.01 ) Gain on sale of assets (10) (20 ) (15 ) (0.02 ) Core performance measures $ 13,580 $ 1,947 $ 1,463 20.7 % $ 1.70 (a) Based upon statutory tax rates in the specific jurisdiction for each event.
The decrease in core net income of $17 million was driven by lower reportable segment net income of $132 million, as discussed in the “Segment Analysis” section of our MD&A, offset by an increase in $90 million in Hemlock and Emerging Growth Businesses, primarily driven by HSG. 30 Table of Contents Core Earnings per Common Share Core earnings per share increased for the year ended December 31, 2022 to $2.09 per share, as result of a decrease in the weighted-average common shares outstanding offset by lower core net income.
Net income of reportable segment and Hemlock and Emerging Growth Businesses are discussed in detail in the “Segment Analysis” section of our MD&A. Core Earnings per Share Core earnings per share decreased for the year ended December 31, 2023 to $1.70 per share, as a result of the decrease in core net income, as outlined above.
Customer Deposits, Deferred Revenue and Government Incentives We receive cash deposits or consideration, generally non-refundable, from customers under long-term supply agreements. In addition, we receive cash incentives from government entities primarily to offset capital expenditures or related expenses. For the year ended December 31, 2022, the amount received from these types of arrangements was $420 million.
In addition, we receive incentives from government entities, typically in the form of cash incentives primarily to offset capital expenditures or related expenses. For the years ended December 31, 2023 and 2022, the amounts received from these types of arrangements were $0.3 billion and $0.4 billion, respectively.
These amounts were reflected within operating activities in the consolidated statements of cash flows. (2) The impact to income was primarily driven by Japanese yen, South Korean won and euro-denominated hedges of translated earnings.
(3) The impact to income for the years ended December 31, 2023 and 2022 was primarily driven by Japanese yen, South Korean won and euro-denominated hedges of translated earnings.
Current Maturities of Short and Long-Term Debt As of December 31, 2022, we had $224 million of short-term borrowings that mature in less than one year. The maturity schedule of our existing long-term debt does not require significant cash outflows, with approximately $1.1 billion due over the next five years.
The maturity schedule of our existing long-term debt does not require significant cash outflows, with approximately $1.4 billion due over the next five years. Defined Benefit Pension Plans Our global pension plans, including our unfunded and non-qualified plans, were 81% funded as of December 31, 2023.
The increase was primarily driven by sales growth in Optical Communications of $674 million and Hemlock and Emerging Growth Businesses of $419 million, offset by the adverse impact of volume declines in Display Technologies resulting in a decrease in segment net sales of $394 million.
The decrease was primarily driven by a decline in segment sales for Optical Communications of $1.0 billion, Life Sciences of $0.3 billion and Hemlock and Emerging Growth Businesses of $0.2 billion, partially offset by an increase in segment sales for Environmental Technologies of $0.2 billion.
The funded status of our pension plans is dependent upon multiple factors including actuarial assumptions, interest rates at year-end, prior investment returns and contributions made to the plans. In 2022, Corning made no voluntary contributions to our domestic defined benefit pension plan and cash contributions to our international pension plans were not material.
Our largest single pension plan is our U.S. qualified plan, which accounted for 77% of our consolidated defined benefit pension plans’ projected benefit obligation, was 92% funded as of December 31, 2023. 37 Table of Contents The funded status of our pension plans is dependent upon multiple factors including actuarial assumptions, interest rates at year-end, prior investment returns and contributions made to the plans.
Core Net Income For the year ended December 31, 2022, we generated core net income of $1.8 billion, or $2.09 per share, compared to core net income generated for the year ended December 31, 2021 of $1.8 billion, or $2.07 per share.
Net sales of reportable segment and Hemlock and Emerging Growth Businesses are discussed in detail in the “Segment Analysis” section of our MD&A. 30 Table of Contents Core Net Income For the year ended December 31, 2023, we generated core net income of $1.5 billion, or $1.70 per share, compared to core net income generated for the year ended December 31, 2022 of $1.8 billion, or $2.09 per share.
Core performance measures are not prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), but management believes that reporting core performance measures provides investors with greater transparency to the information used by our management team to make financial and operational decisions.
We believe that the use of constant-currency reporting allows management to understand our results without the volatility of currency fluctuations, analyze underlying trends in the businesses and establish operational goals and forecasts. Core performance measures are not prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).
We establish constant-currency rates based on internally derived management estimates, which are closely aligned with the currencies we have hedged. For details of the rates used, please see the footnotes to the “Reconciliation of Non-GAAP Measures” section.
The constant-currency rates established for our core performance measures are internally derived long-term management estimates, which are closely aligned with our hedging instrument rates. These hedging instruments may include, but are not limited to, foreign exchange forward or option contracts and foreign-denominated debt. For details of the rates used, please see the footnotes to the “Reconciliation of Non-GAAP Measures” section.
As a result, management is unable to provide outlook information on a GAAP basis. For a reconciliation of non-GAAP performance measures to their most directly comparable GAAP financial measure, please see “Reconciliation of Non-GAAP Measures”.
As a result, management is unable to provide outlook information on a GAAP basis.
Life Sciences The decrease in segment net income was primarily driven by the relatively flat level of sales, as outlined above, and impacted by inflationary costs and higher manufacturing costs that were not completely offset by pricing actions.
Environmental Technologies The increase in segment net income was primarily driven by the increase in sales, as outlined above, and as a result of improvements from productivity actions. Life Sciences The decrease in segment net income was primarily driven by lower sales volume, as outlined above.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

4 edited+0 added−0 removed8 unchanged
Biggest changeWhen this revenue is translated back to U.S. dollars, we are exposed to foreign exchange rate movements in the Japanese yen. To protect translated earnings against movements in the Japanese yen, we have entered into a series of average rate forwards and other derivative instruments. We use a sensitivity analysis to assess the market risk associated with foreign currency exposure.
Biggest changeWhen this revenue is translated back to U.S. dollars, we are exposed to foreign exchange rate movements in the Japanese yen. To protect translated earnings against movements in the Japanese yen, we have entered into a series of option contracts and average rate forwards. We use a sensitivity analysis to assess the market risk associated with foreign currency exposure.
Our most significant foreign currency exposure relates to the Japanese yen, South Korean won, new Taiwan dollar, Chinese yuan and the euro. We seek to mitigate the impact of exchange rate movements in our income statement by using over-the-counter (“OTC”) derivative instruments including foreign exchange forward and option contracts.
Our most significant foreign currency exposure relates to the Japanese yen, South Korean won, New Taiwan dollar, Chinese yuan and euro. We seek to mitigate the impact of exchange rate movements in our income statement by using over-the-counter (“OTC”) derivative instruments including foreign exchange forward and option contracts.
As of December 31, 2022, with respect to open foreign exchange forward and option contracts and foreign denominated debt with values exposed to exchange rate movements, a 10% adverse movement in quoted foreign currency exchange rates could result in a loss in fair value of these instruments of $0.8 billion compared to $0.7 billion as of December 31, 2021.
As of December 31, 2023, with respect to open foreign exchange forward and option contracts and foreign denominated debt with values exposed to exchange rate movements, a 10% adverse movement in quoted foreign currency exchange rates could result in a loss in fair value of these instruments of $0.6 billion compared to $0.8 billion as of December 31, 2022.
Specific to the Japanese yen, a 10% adverse movement in quoted yen exchange rates could result in a loss in fair value of these instruments of $0.4 billion and $0.6 billion as of December 31, 2022 and 2021, respectively.
Specific to the Japanese yen, a 10% adverse movement in quoted yen exchange rates could result in a loss in fair value of these instruments of $0.3 billion and $0.4 billion as of December 31, 2023 and 2022, respectively.

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