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Cover and table of contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
| ☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended March 31, 2025
OR
| ☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from ____________________________ To ____________________________
Commission file number: 1-3247
CORNING INCORPORATED
(Exact name of registrant as specified in its charter)
| New York | 16-0393470 | |||||||||||||
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||||||||
| One Riverfront Plaza, Corning, New York | 14831 | |||||||||||||
| (Address of principal executive offices) | (Zip Code) |
607-974-9000
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
| Common Stock, $0.50 par value per share | GLW | New York Stock Exchange | ||||||||||||
| 3.875% Notes due 2026 | GLW26 | New York Stock Exchange | ||||||||||||
| 4.125% Notes due 2031 | GLW31 | New York Stock Exchange |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.
| Yes | ☒ | No | ☐ |
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
| Yes | ☒ | No | ☐ |
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large Accelerated Filer | ☒ | Accelerated Filer | ☐ | |||||||||||||||||
| Non-Accelerated Filer | ☐ | Smaller Reporting Company | ☐ | |||||||||||||||||
| Emerging Growth Company | ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards pursuant to Section 13(a) of the Exchange Act. ☐
If securities are registered pursuant to Section 12(b) of the Exchange Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
| Yes | ☐ | No | ☒ |
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
| Class | Outstanding as of April 24, 2025 | |||||||||||||
| Corning’s Common Stock, $0.50 par value per share | 856,471,447 shares |
INDEX
| Consolidated Statements of Income | Corning Incorporated and Subsidiary Companies | ||||
| (Unaudited; in millions, except per share amounts) |
| Three months ended March 31, | |||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||
| Net sales | $ | 3,452 | $ | 2,975 | |||||||||||||||||||
| Cost of sales | 2,238 | 1,982 | |||||||||||||||||||||
| Gross margin | 1,214 | 993 | |||||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| Selling, general and administrative expenses | 471 | 451 | |||||||||||||||||||||
| Research, development and engineering expenses | 270 | 258 | |||||||||||||||||||||
| Amortization of purchased intangibles | 28 | 30 | |||||||||||||||||||||
| Operating income | 445 | 254 | |||||||||||||||||||||
| Interest income | 12 | 12 | |||||||||||||||||||||
| Interest expense | (82) | (83) | |||||||||||||||||||||
| Translated earnings contract (loss) gain, net (Note 11) | (101) | 39 | |||||||||||||||||||||
| Other (expense) income, net | (34) | 74 | |||||||||||||||||||||
| Income before income taxes | 240 | 296 | |||||||||||||||||||||
| Provision for income taxes (Note 3) | (55) | (71) | |||||||||||||||||||||
| Net income | 185 | 225 | |||||||||||||||||||||
| Net income attributable to non-controlling interest | (28) | (16) | |||||||||||||||||||||
| Net income attributable to Corning Incorporated | $ | 157 | $ | 209 | |||||||||||||||||||
| Earnings per common share available to common shareholders: | |||||||||||||||||||||||
| Basic (Note 4) | $ | 0.18 | $ | 0.25 | |||||||||||||||||||
| Diluted (Note 4) | $ | 0.18 | $ | 0.24 |
The accompanying notes are an integral part of these consolidated financial statements.
| Consolidated Statements of Comprehensive Income (Loss) | Corning Incorporated and Subsidiary Companies | ||||
| (Unaudited; in millions) |
| Three months ended March 31, | |||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||
| Net income | $ | 185 | $ | 225 | |||||||||||||||||||
| Foreign currency translation adjustments and other (Note 12) | 161 | (330) | |||||||||||||||||||||
| Unamortized (losses) gains and prior service costs for postretirement benefit plans | (5) | 2 | |||||||||||||||||||||
| Realized and unrealized gains on derivatives | 27 | 1 | |||||||||||||||||||||
| Other comprehensive income (loss), net of tax | 183 | (327) | |||||||||||||||||||||
| Comprehensive income (loss) | 368 | (102) | |||||||||||||||||||||
| Comprehensive income attributable to non-controlling interest | (28) | (16) | |||||||||||||||||||||
| Comprehensive income (loss) attributable to Corning Incorporated | $ | 340 | $ | (118) |
The accompanying notes are an integral part of these consolidated financial statements.
| Consolidated Balance Sheets | Corning Incorporated and Subsidiary Companies | ||||
| (Unaudited; in millions, except share and per share amounts) |
| March 31, 2025 | December 31, 2024 | ||||||||||
| Assets | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 1,359 | $ | 1,768 | |||||||
| Trade accounts receivable, net of doubtful accounts - $31 and $33 | 2,045 | 2,053 | |||||||||
| Inventories (Note 5) | 2,896 | 2,724 | |||||||||
| Other current assets | 1,344 | 1,447 | |||||||||
| Total current assets | 7,644 | 7,992 | |||||||||
| Property, plant and equipment, net of accumulated depreciation - $14,523 and $14,492 | 13,360 | 13,359 | |||||||||
| Goodwill | 2,371 | 2,363 | |||||||||
| Other intangible assets, net | 732 | 752 | |||||||||
| Deferred income taxes (Note 3) | 1,183 | 1,130 | |||||||||
| Other assets | 2,104 | 2,139 | |||||||||
| Total Assets | $ | 27,394 | $ | 27,735 | |||||||
| Liabilities and Equity | |||||||||||
| Current liabilities: | |||||||||||
| Current portion of long-term debt and short-term borrowings (Note 7) | $ | 283 | $ | 326 | |||||||
| Accounts payable | 1,737 | 1,472 | |||||||||
| Other accrued liabilities (Notes 6 and 10) | 2,503 | 3,121 | |||||||||
| Total current liabilities | 4,523 | 4,919 | |||||||||
| Long-term debt (Note 7) | 6,954 | 6,885 | |||||||||
| Postretirement benefits other than pensions (Note 8) | 333 | 336 | |||||||||
| Other liabilities (Notes 6 and 10) | 4,456 | 4,525 | |||||||||
| Total liabilities | 16,266 | 16,665 | |||||||||
| Commitments and contingencies (Note 10) | |||||||||||
| Shareholders’ equity (Note 12): | |||||||||||
| Common stock – Par value $0.50 per share; Shares authorized 3.8 billion; Shares issued: 1.8 billion and 1.8 billion | 922 | 921 | |||||||||
| Additional paid-in capital – common stock | 17,327 | 17,264 | |||||||||
| Retained earnings | 15,839 | 15,926 | |||||||||
| Treasury stock, at cost; Shares held: 990 million and 987 million | (21,012) | (20,882) | |||||||||
| Accumulated other comprehensive loss | (2,360) | (2,543) | |||||||||
| Total Corning Incorporated shareholders’ equity | 10,716 | 10,686 | |||||||||
| Non-controlling interest | 412 | 384 | |||||||||
| Total equity | 11,128 | 11,070 | |||||||||
| Total Liabilities and Equity | $ | 27,394 | $ | 27,735 |
The accompanying notes are an integral part of these consolidated financial statements.
| Consolidated Statements of Cash Flows | Corning Incorporated and Subsidiary Companies | ||||
| (Unaudited; in millions) |
| Three months ended March 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Cash Flows from Operating Activities: | |||||||||||
| Net income | $ | 185 | $ | 225 | |||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
| Depreciation | 291 | 307 | |||||||||
| Amortization of purchased intangibles | 28 | 30 | |||||||||
| Share-based compensation expense | 54 | 60 | |||||||||
| Translation loss (gain) on Japanese yen-denominated debt, net | 43 | (81) | |||||||||
| Deferred tax (benefit) provision | (50) | 10 | |||||||||
| Translated earnings contract loss (gain), net | 101 | (39) | |||||||||
| Changes in assets and liabilities: | |||||||||||
| Trade accounts receivable | 10 | (161) | |||||||||
| Inventories | (146) | (86) | |||||||||
| Other current assets | (30) | 2 | |||||||||
| Accounts payable and other current liabilities | (253) | (114) | |||||||||
| Customer deposits and government incentives | (16) | (25) | |||||||||
| Deferred income | (29) | (34) | |||||||||
| Other, net | (37) | 2 | |||||||||
| Net cash provided by operating activities | 151 | 96 | |||||||||
| Cash Flows from Investing Activities: | |||||||||||
| Capital expenditures | (208) | (252) | |||||||||
| Realized gains on translated earnings contracts and other | 56 | 94 | |||||||||
| Other, net | (13) | (26) | |||||||||
| Net cash used in investing activities | (165) | (184) | |||||||||
| Cash Flows from Financing Activities: | |||||||||||
| Repayments of debt | (47) | (37) | |||||||||
| Proceeds from cross currency swap | 24 | ||||||||||
| Payments of employee withholding tax on stock awards | (29) | (34) | |||||||||
| Proceeds from exercise of stock options | 11 | 13 | |||||||||
| Purchases of common stock for treasury | (100) | ||||||||||
| Dividends paid | (242) | (243) | |||||||||
| Other, net | (20) | (7) | |||||||||
| Net cash used in financing activities | (403) | (308) | |||||||||
| Effect of exchange rates on cash | 8 | (18) | |||||||||
| Net decrease in cash and cash equivalents | (409) | (414) | |||||||||
| Cash and cash equivalents at beginning of period | 1,768 | 1,779 | |||||||||
| Cash and cash equivalents at end of period | $ | 1,359 | $ | 1,365 |
The accompanying notes are an integral part of these consolidated financial statements.
| Consolidated Statements of Changes in Shareholders’ Equity | Corning Incorporated and Subsidiary Companies | ||||
| (Unaudited; in millions, except per share amounts) |
| Common stock | Additional paid-in capital common | Retained earnings | Treasury stock | Accumulated other comprehensive loss | Total Corning Incorporated shareholders’ equity | Non-controlling interest | Total | ||||||||||||||||||||||||||||||||||||||||
| Balance as of December 31, 2024 | $ | 921 | $ | 17,264 | $ | 15,926 | $ | (20,882) | $ | (2,543) | $ | 10,686 | $ | 384 | $ | 11,070 | |||||||||||||||||||||||||||||||
| Net income | 157 | 157 | 28 | 185 | |||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income | 183 | 183 | 183 | ||||||||||||||||||||||||||||||||||||||||||||
| Purchase of common stock for treasury | (100) | (100) | (100) | ||||||||||||||||||||||||||||||||||||||||||||
| Shares issued to benefit plans and for option exercises | 1 | 63 | 64 | 64 | |||||||||||||||||||||||||||||||||||||||||||
| Common dividends ($0.28 per share) | (244) | (244) | (244) | ||||||||||||||||||||||||||||||||||||||||||||
| Other, net (1) | (30) | (30) | (30) | ||||||||||||||||||||||||||||||||||||||||||||
| Balance as of March 31, 2025 | $ | 922 | $ | 17,327 | $ | 15,839 | $ | (21,012) | $ | (2,360) | $ | 10,716 | $ | 412 | $ | 11,128 | |||||||||||||||||||||||||||||||
| Common stock | Additional paid-in capital common | Retained earnings | Treasury stock | Accumulated other comprehensive loss | Total Corning Incorporated shareholders’equity | Non-controlling interest | Total | ||||||||||||||||||||||||||||||||||||||||
| Balance as of December 31, 2023 | $ | 916 | $ | 16,929 | $ | 16,391 | $ | (20,637) | $ | (2,048) | $ | 11,551 | $ | 317 | $ | 11,868 | |||||||||||||||||||||||||||||||
| Net income | 209 | 209 | 16 | 225 | |||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive loss | (327) | (327) | (1) | (328) | |||||||||||||||||||||||||||||||||||||||||||
| Shares issued to benefit plans and for option exercises | 1 | 69 | 70 | 70 | |||||||||||||||||||||||||||||||||||||||||||
| Common dividends ($0.28 per share) | (242) | (242) | (242) | ||||||||||||||||||||||||||||||||||||||||||||
| Other, net (1) | (35) | (35) | 1 | (34) | |||||||||||||||||||||||||||||||||||||||||||
| Balance as of March 31, 2024 | $ | 917 | $ | 16,998 | $ | 16,358 | $ | (20,672) | $ | (2,375) | $ | 11,226 | $ | 333 | $ | 11,559 | |||||||||||||||||||||||||||||||
(1)Treasury stock includes the deemed surrender to the Company of common stock to satisfy employee tax withholding obligations.
The accompanying notes are an integral part of these consolidated financial statements.
CORNING INCORPORATED AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Summary of Significant Accounting Policies
Basis of Presentation and Principles of Consolidation
In these notes, the terms “Corning,” “Company,” “we,” “us,” or “our” mean Corning Incorporated and its subsidiary companies.
The consolidated financial statements include the accounts of Corning Incorporated and our consolidated subsidiaries (collectively, the “Company”), consisting of our wholly-owned subsidiaries and those entities in which we have a variable interest and of which we are the primary beneficiary, and are consolidated in conformity with accounting principles generally accepted in the United States of America (“GAAP”). In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments, consisting of normal recurring adjustments, necessary to state fairly the financial position, results of operations and cash flows for the periods presented. All intercompany accounts, transactions and profits have been eliminated. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been omitted pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”). These consolidated financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 (“2024 Form 10-K”). The results of operations for the interim periods are not necessarily indicative of results which may be expected for any other interim period or for the full year.
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses and the disclosure of contingent assets and liabilities in the consolidated financial statements and accompanying notes. Significant estimates and assumptions in these consolidated financial statements require the exercise of judgment. Due to the inherent uncertainty involved in making estimates, actual results could differ materially from these estimates.
The non-controlling interest as recorded in the consolidated financial statements represents amounts attributable to the minority shareholders of less-than-wholly-owned consolidated subsidiaries, including Hemlock Semiconductor Group (“HSG”) and other subsidiaries primarily within our Optical Communications segment.
Certain prior year amounts have been reclassified to conform to the current year presentation, including the recast of the Company’s segment related disclosures to align with the new reportable segments as of January 1, 2025. Refer to Note 14 (Reportable Segments) for additional information. These reclassifications had no impact on the results of operations, financial position or changes in shareholders’ equity.
2. Revenue
Disaggregated Revenue
The following table presents revenues by product category (in millions):
| Three months ended March 31, | |||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||
| Optical communications products | $ | 1,355 | $ | 930 | |||||||||||||||||||
| Display products | 704 | 632 | |||||||||||||||||||||
| Specialty materials products | 495 | 450 | |||||||||||||||||||||
| Automotive products | 426 | 463 | |||||||||||||||||||||
| Life sciences products | 228 | 225 | |||||||||||||||||||||
| Polycrystalline silicon products | 206 | 216 | |||||||||||||||||||||
| All other products | 38 | 59 | |||||||||||||||||||||
| Total revenue | $ | 3,452 | $ | 2,975 |
Customer Deposits
As of March 31, 2025 and December 31, 2024, Corning had customer deposits of approximately $1.1 billion. Most of these customer deposits were non-refundable and allowed customers to secure rights to products produced under long-term supply agreements, generally over a period of up to ten years. As products are delivered to customers, Corning will recognize revenue and reduce the amount of the customer deposit liability.
For the three months ended March 31, 2025 and 2024, customer deposits recognized were $62 million and $80 million, respectively.
Refer to Note 6 (Other Liabilities) for additional information.
Deferred Revenue
As of March 31, 2025 and December 31, 2024, Corning had deferred revenue of approximately $804 million and $833 million, respectively. Deferred revenue was primarily related to the performance obligations of non-refundable consideration previously received by HSG from its customers under long-term supply agreements.
Deferred revenue is tracked on a per-customer contract-unit basis. As customers take delivery of the committed volumes under the terms of the contract, a per-unit amount of deferred revenue is recognized when control of the promised goods is transferred to the customer based upon the units delivered compared to the remaining contractual units. For the three months ended March 31, 2025 and 2024, the amount of deferred revenue recognized in the consolidated statements of income was not material.
Refer to Note 6 (Other Liabilities) for additional information.
3. Income Taxes
The following table presents the provision for income taxes and the related effective tax rate (in millions, except percentages):
| Three months ended March 31, | |||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||
| Provision for income taxes | $ | (55) | $ | (71) | |||||||||||||||||||
| Effective tax rate | 22.9 | % | 24.0 | % |
For the three months ended March 31, 2025, the effective tax rate differed from the United States (“U.S.”) statutory rate of 21%, primarily due to certain pre-tax losses with no corresponding expected tax benefit, partially offset by foreign derived intangible income and non-taxable items.
For the three months ended March 31, 2024, the effective tax rate differed from the U.S. statutory rate of 21%, primarily due to changes in tax reserves, partially offset by a net benefit due to foreign derived intangible income.
Corning Precision Materials, a South Korean subsidiary, is currently appealing certain tax assessments and tax refund claims for tax years 2010 through 2019. The Company was required to deposit the disputed tax amounts with the South Korean government as a condition of its appeal of any tax assessment. The non-current receivable balance was $255 million and $253 million as of March 31, 2025 and December 31, 2024, respectively, for the amount on deposit with the South Korean government. Corning believes that it is more likely than not the Company will prevail in the appeals process relating to these matters.
4. Earnings Per Common Share
The following table presents the reconciliation of the amounts used to compute basic and diluted earnings per common share (in millions, except per share amounts):
| Three months ended March 31, | |||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||
| Net income attributable to Corning Incorporated | $ | 157 | $ | 209 | |||||||||||||||||||
| Weighted-average common shares outstanding – basic | 855 | 852 | |||||||||||||||||||||
| Effect of dilutive securities: | |||||||||||||||||||||||
| Stock options and other awards | 11 | 10 | |||||||||||||||||||||
| Weighted-average common shares outstanding – diluted | 866 | 862 | |||||||||||||||||||||
| Basic earnings per common share | $ | 0.18 | $ | 0.25 | |||||||||||||||||||
| Diluted earnings per common share | $ | 0.18 | $ | 0.24 | |||||||||||||||||||
| Anti-dilutive potential shares excluded from diluted earnings per common share: | |||||||||||||||||||||||
| Stock options and other awards | 2 | 3 |
5. Inventories
Inventories consisted of the following (in millions):
| March 31, 2025 | December 31, 2024 | ||||||||||
| Finished goods | $ | 1,419 | $ | 1,323 | |||||||
| Work in process | 552 | 547 | |||||||||
| Raw materials and accessories | 461 | 413 | |||||||||
| Supplies and packing materials | 464 | 441 | |||||||||
| Inventories | $ | 2,896 | $ | 2,724 |
6. Other Liabilities
Other liabilities consisted of the following (in millions):
| March 31, 2025 | December 31, 2024 | ||||||||||
| Current liabilities: | |||||||||||
| Wages and employee benefits | $ | 469 | $ | 883 | |||||||
| Income taxes | 107 | 109 | |||||||||
| Derivative instruments (Note 11) | 255 | 348 | |||||||||
| Deferred revenue (Note 2) | 205 | 190 | |||||||||
| Customer deposits (Note 2) | 170 | 127 | |||||||||
| Short-term operating leases | 90 | 95 | |||||||||
| Other current liabilities | 1,207 | 1,369 | |||||||||
| Other accrued liabilities | $ | 2,503 | $ | 3,121 | |||||||
| Non-current liabilities: | |||||||||||
| Defined benefit pension plan liabilities | $ | 541 | $ | 529 | |||||||
| Derivative instruments (Note 11) | 297 | 273 | |||||||||
| Deferred revenue (Note 2) | 599 | 643 | |||||||||
| Customer deposits (Note 2) | 885 | 983 | |||||||||
| Deferred tax liabilities | 138 | 137 | |||||||||
| Long-term operating leases | 826 | 785 | |||||||||
| Other non-current liabilities | 1,170 | 1,175 | |||||||||
| Other liabilities | $ | 4,456 | $ | 4,525 |
7. Debt
Based on borrowing rates currently available to us for loans with similar terms and maturities, the fair value of long-term debt was $6.5 billion and $6.4 billion compared to the carrying value of $7.0 billion and $6.9 billion as of March 31, 2025 and December 31, 2024, respectively. The Company measures the fair value of its long-term debt using Level 2 inputs based primarily on current market yields for its existing debt traded in the secondary market.
During the three months ended March 31, 2025, the Company de-designated €100 million ($108 million equivalent as of March 31, 2025) notional of the €300 million ($325 million equivalent as of March 31, 2025) 3.875% Notes due 2026 as a net investment hedge. Refer to Note 11 (Financial Instruments) for additional information.
From time to time, the Company enters into various cross currency swap contracts to economically lock in unrealized foreign exchange gains relating to a portion of the Company’s Japanese yen-denominated debt. Refer to Note 11 (Financial Instruments) for additional information.
8. Employee Retirement Plans
The following table presents the components of net periodic pension and postretirement benefit expense (income) for employee retirement plans, which other than the service cost component is recorded in other (expense) income, net in the consolidated statements of income (in millions):
| Pension benefits | Postretirement benefits | ||||||||||||||||||||||||||||||||||||||||||||||
| Three months ended March 31, | Three months ended March 31, | ||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||||||||||||||||||||||||
| Service cost | $ | 24 | $ | 23 | $ | 1 | $ | 1 | |||||||||||||||||||||||||||||||||||||||
| Interest cost | 47 | 46 | 4 | 5 | |||||||||||||||||||||||||||||||||||||||||||
| Expected return on plan assets | (50) | (48) | |||||||||||||||||||||||||||||||||||||||||||||
| Amortization of actuarial net gain | (6) | (5) | |||||||||||||||||||||||||||||||||||||||||||||
| Amortization of prior service cost (credit) | 1 | 1 | (2) | (2) | |||||||||||||||||||||||||||||||||||||||||||
| Total pension and postretirement benefit expense (income) | $ | 22 | $ | 22 | $ | (3) | $ | (1) |
9. Leases
During the first quarter of 2025, Corning entered into a lease primarily for production related equipment, that has not yet commenced, of approximately $261 million on an undiscounted basis. The lease is expected to commence late in 2026 with a lease term of 16 years. This lease is expected to be classified as a finance lease and the amount of right-of-use asset and lease liability will be determined and recorded upon lease commencement.
10. Commitments and Contingencies
Corning is a defendant in various lawsuits and is subject to various claims that arise in the normal course of business, the most significant of which are summarized below. In the opinion of management, the likelihood that the ultimate disposition of these matters will have a material adverse effect on Corning’s consolidated financial position, liquidity or results of operations, is remote.
Dow Corning Environmental Claims
Beginning in September 2019, Dow formally notified Corning of certain environmental matters for which Dow asserts that it has or will experience losses arising from remediation and response at a number of sites. Subject to certain conditions and limits, Corning may be required to indemnify Dow for up to 50% of such losses. As of March 31, 2025, Corning has determined a potential liability for these environmental matters is probable and the amount reserved was not material.
Environmental Litigation
Corning has been designated by federal or state governments under environmental laws, including Superfund, as a potentially responsible party that may be liable for cleanup costs associated with 20 hazardous waste sites. It is Corning’s policy to accrue for its estimated liability related to such hazardous waste sites and other environmental liabilities related to property owned by Corning based on expert analysis and continual monitoring by both internal and external consultants. As of March 31, 2025 and December 31, 2024, Corning had accrued approximately $94 million and $78 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.
11. Financial Instruments
The following table summarizes the notional amounts and respective fair values of Corning’s derivative financial instruments on a gross basis (in millions):
| March 31, 2025 | December 31, 2024 | ||||||||||||||||||||||||||||||||||
| Notional amount | Fair value asset (1) | Fair value liability (1) | Notional amount | Fair value asset (1) | Fair value liability (1) | ||||||||||||||||||||||||||||||
| Derivatives designated as hedging instruments (2): | |||||||||||||||||||||||||||||||||||
| Foreign exchange and precious metals lease contracts (3) | $ | 1,274 | $ | 66 | $ | (45) | $ | 928 | $ | 106 | $ | (69) | |||||||||||||||||||||||
| Derivatives not designated as hedging instruments: | |||||||||||||||||||||||||||||||||||
| Foreign exchange contracts | 3,085 | 45 | (24) | 2,339 | 14 | (77) | |||||||||||||||||||||||||||||
| Translated earnings contracts (4) | 11,336 | 700 | (316) | 9,817 | 859 | (327) | |||||||||||||||||||||||||||||
| Cross currency swap contracts | 571 | (167) | 439 | (148) | |||||||||||||||||||||||||||||||
| Total derivatives | $ | 16,266 | $ | 811 | $ | (552) | $ | 13,523 | $ | 979 | $ | (621) | |||||||||||||||||||||||
| Current | $ | 572 | $ | (255) | $ | 619 | $ | (348) | |||||||||||||||||||||||||||
| Non-current | 239 | (297) | 360 | (273) | |||||||||||||||||||||||||||||||
| Total derivatives | $ | 811 | $ | (552) | $ | 979 | $ | (621) |
(1)All of the Company’s derivative contracts are measured at fair value and are classified as Level 2 within the fair value hierarchy. Derivative assets are presented in other current assets or other assets in the consolidated balance sheets. Derivative liabilities are presented in other accrued liabilities or other liabilities in the consolidated balance sheets.
(2)The amounts above do not include €750 million ($806 million equivalent) and €850 million ($879 million equivalent) of euro-denominated debt as of March 31, 2025 and December 31, 2024, respectively, which is a non-derivative financial instrument designated as a net investment hedge.
(3)As of March 31, 2025 and December 31, 2024, derivatives designated as hedging instruments include foreign exchange cash flow hedges and net investment hedges with gross notional amounts of $1.3 billion and $928 million, respectively, and fair value hedges of leased precious metals with gross notional amounts of 9,344 troy ounces and 12,694 troy ounces, respectively. Fair value assets include designated derivatives pertaining to precious metals lease contracts in the amounts of $51 million and $104 million as of March 31, 2025 and December 31, 2024, respectively. Fair value liabilities include designated derivatives pertaining to precious metals lease contracts in the amounts of $3 million as of March 31, 2025.
(4)The Company has deferred payments associated with its purchased option contracts that are classified as non-derivative liabilities and will be settled by the end of the option contract term. As of March 31, 2025 and December 31, 2024, the Company has $148 million and $141 million recorded in other accrued liabilities and $139 million and $172 million recorded in other liabilities, respectively, in the consolidated balance sheets.
The following table summarizes the total gross notional values for translated earnings contracts (in millions):
| March 31, 2025 | December 31, 2024 | ||||||||||
| Forward contracts: | |||||||||||
| Chinese yuan-denominated | $ | 1,117 | $ | 864 | |||||||
| Japanese yen-denominated | 569 | 259 | |||||||||
| South Korean won-denominated | 1,166 | 1,151 | |||||||||
| New Taiwan dollar-denominated | 637 | 503 | |||||||||
| Euro-denominated | 1,439 | 1,538 | |||||||||
| Mexican peso-denominated | 1,900 | 320 | |||||||||
| Option contracts: | |||||||||||
| Japanese yen-denominated | 4,369 | 4,997 | |||||||||
| Euro-denominated | 139 | 185 | |||||||||
| Total gross notional amount for translated earnings contracts | $ | 11,336 | $ | 9,817 |
The following tables summarize the effect in the consolidated statements of income relating to Corning’s derivative financial instruments (in millions). The accumulated derivative loss included in accumulated other comprehensive loss on the consolidated balance sheets as of March 31, 2025 and December 31, 2024 is $5 million and $11 million, respectively.
| Three months ended March 31, | |||||||||||||||||||||||||||||
| (Loss) gain recognized in other comprehensive income (loss) (OCI) | Location of (loss) gain reclassified from accumulated OCI into income effective (ineffective) | (Loss) gain reclassified from accumulated OCI into income | |||||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||||||
| Derivative hedging relationships for cash flow, net investment and fair value hedges: | |||||||||||||||||||||||||||||
| Foreign exchange and precious metals lease contracts | $ | 33 | Cost of sales | $ | (7) | $ | 6 | ||||||||||||||||||||||
| Other (expense) income, net | 1 | ||||||||||||||||||||||||||||
| Total designated | $ | — | $ | 33 | $ | (6) | $ | 6 |
| (Loss) gain recognized in income | Location of (loss) gain recognized in income | ||||||||||||||||||||||||||||
| Three months ended March 31, | |||||||||||||||||||||||||||||
| Undesignated derivatives | 2025 | 2024 | |||||||||||||||||||||||||||
| Foreign exchange contracts | $ | 38 | $ | (22) | Other (expense) income, net | ||||||||||||||||||||||||
| Translated earnings contracts | (101) | 39 | Translated earnings contract (loss) gain, net | ||||||||||||||||||||||||||
| Total undesignated | $ | (63) | $ | 17 |
Cross Currency Swap Contracts
Since inception of the Company’s Japanese yen-denominated debt, the Japanese yen has weakened and the U.S. dollar value of these liabilities has decreased, generating unrealized foreign exchange gains that have been recognized over time in the consolidated statements of income. During 2024, the Company entered into various cross currency swap contracts relating to a portion of the Company’s Japanese yen-denominated debt in order to economically lock in unrealized foreign exchange gains. At inception of these instruments, Corning receives a net amount from the counterparties, representing an exchange of the notional amounts at a fixed foreign exchange rate of Japanese yen to U.S. dollar and initially records this amount as a derivative liability. In the first quarter of 2025, the Company entered into a cross currency swap contract relating to a portion of the Company’s Japanese yen-denominated debt due in 2028. During the three months ended March 31, 2025, the net payments received were $24 million. There were no contracts entered into during the three months ended March 31, 2024. As of March 31, 2025 and December 31, 2024, the fair value of the derivative liability associated with these contracts is $167 million and $148 million, respectively.
Net Investment Hedges
In May 2023, the Company issued €300 million ($325 million equivalent as of March 31, 2025) 3.875% Notes due 2026 (“2026 Notes”) and €550 million ($595 million equivalent as of March 31, 2025) 4.125% Notes due 2031 (“2031 Notes”). The proceeds from the 2026 Notes and 2031 Notes were received in euros and converted to U.S. dollars on the date of issuance. In 2023, the Company designated the full amount of its euro-denominated 2026 Notes and 2031 Notes with a total notional amount of €850 million ($920 million equivalent as of March 31, 2025), which are non-derivative financial instruments, as net investment hedges against its investments in certain European subsidiaries with euro functional currencies. During the three months ended March 31, 2025, the Company de-designated €100 million ($108 million equivalent as of March 31, 2025) notional of the €300 million ($325 million equivalent as of March 31, 2025) bond due in 2026 as a net investment hedge.
During the three months ended March 31, 2025, the Company entered into various foreign exchange forward contracts with notional amounts totaling €110 million ($119 million equivalent as of March 31, 2025) and ¥40.2 billion ($268 million equivalent as of March 31, 2025), and designated these forward contracts as net investment hedges against its investments in certain European subsidiaries with euro functional currencies and its Taiwanese subsidiary with Japanese yen functional currency, respectively.
As of March 31, 2025, these net investment hedges are deemed to be effective. During the three months March 31, 2025 and March 31, 2024, foreign currency (losses) gains of $(33) million and $22 million, respectively, associated with these net investment hedges were recognized in other comprehensive income (loss).
Leased Precious Metals Contracts
The carrying amount of the leased precious metals pool, which is included within property, plant and equipment, net of accumulated depreciation in the consolidated balance sheets, is $52 million and $58 million as of March 31, 2025 and December 31, 2024, respectively. The carrying amount of the leased precious metals pool includes cumulative fair value losses of $51 million and $108 million as of March 31, 2025 and December 31, 2024, respectively. These losses are offset by changes in the fair value of hedges.
12. Shareholders’ Equity
Common Stock Dividends
On May 1, 2025, Corning’s Board of Directors declared a quarterly dividend of $0.28 per share of common stock. The dividend will be payable on June 27, 2025.
Fixed Rate Cumulative Convertible Preferred Stock, Series A
The Company had 2,300 outstanding shares of Fixed Rate Cumulative Convertible Preferred Stock, Series A (the “Preferred Stock”) as of December 31, 2020. On January 16, 2021, the Preferred Stock became convertible into 115 million common shares. On April 5, 2021, Corning and Samsung Display Co., Ltd. (“SDC”) executed the Share Repurchase Agreement (“SRA”), and the Preferred Stock was fully converted as of April 8, 2021. Immediately following the conversion, Corning repurchased and retired 35 million of the common shares held by SDC for an aggregate purchase price of approximately $1.5 billion.
Pursuant to the SRA, with respect to the remaining 80 million common shares outstanding held by SDC, 58 million common shares are subject to a seven-year lock-up period expiring in 2027. The remaining 22 million common shares can be offered to be sold to Corning in specified tranches from time to time in calendar years 2024 through 2027. Corning may, at its sole discretion, elect to repurchase such common shares. If Corning elects not to repurchase the common shares and SDC sells the common shares on the open market, Corning is required to pay SDC a make-whole payment, subject to a 5% cap of the repurchase proceeds that otherwise would have been paid by Corning. As of March 31, 2025 and December 31, 2024, the fair value of the liability associated with this option, measured using Level 2 significant other observable inputs, was not material.
Share Repurchase Program
In 2019, the Board authorized the repurchase of up to $5.0 billion of additional common stock (“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 March 31, 2025, approximately $3.0 billion remains available under the Company’s 2019 Authorization.
During the three months ended March 31, 2025, the Company repurchased 2.1 million shares, for approximately $100 million. No shares were repurchased during the three months ended March 31, 2024.
Accumulated Other Comprehensive Loss
For the three months ended March 31, 2025 and 2024, the change in accumulated other comprehensive loss was primarily related to the foreign currency translation adjustments.
The following table presents the changes in the foreign currency translation adjustment component of accumulated other comprehensive loss, including the proportionate share of equity method affiliates’ accumulated other comprehensive loss (in millions):
| Three months ended March 31, | |||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||
| Beginning balance | $ | (2,530) | $ | (1,942) | |||||||||||||||||||
| Gain (loss) on foreign currency translation (1) | 154 | (331) | |||||||||||||||||||||
| Equity method affiliates (1) | 7 | 1 | |||||||||||||||||||||
| Net current-period other comprehensive income (loss), net of tax | 161 | (330) | |||||||||||||||||||||
| Ending balance | $ | (2,369) | $ | (2,272) |
(1)Amounts are after tax. Tax effects are not significant.
13. Share-Based Compensation
Total share-based compensation expense was $54 million and $60 million for the three months ended March 31, 2025 and 2024 respectively.
Incentive Stock Plans
Time-Based Restricted Stock and Restricted Stock Units
The following table summarizes the changes in non-vested time-based restricted stock and restricted stock units for the three months ended March 31, 2025:
| Number of shares (in thousands) | Weighted average grant-date fair value | ||||||||||
| Non-vested shares and share units as of December 31, 2024 | 8,456 | $ | 32.94 | ||||||||
| Granted | 107 | 51.79 | |||||||||
| Vested | (811) | 35.12 | |||||||||
| Forfeited | (59) | 33.34 | |||||||||
| Non-vested shares and share units as of March 31, 2025 | 7,693 | $ | 32.97 |
Performance-Based Restricted Stock Units
The following table summarizes the changes in non-vested performance-based restricted stock units for the three months ended March 31, 2025:
| Number of shares (in thousands) | Weighted average grant-date fair value | ||||||||||
| Non-vested share units as of December 31, 2024 | 4,040 | $ | 33.28 | ||||||||
| Granted | 1,101 | 52.01 | |||||||||
| Vested | (499) | 33.61 | |||||||||
| Performance adjustments | 769 | 48.17 | |||||||||
| Forfeited | (50) | 48.82 | |||||||||
| Non-vested share units as of March 31, 2025 | 5,361 | $ | 39.07 |
Stock Options
During the three months ended March 31, 2025, 448 thousand options were exercised and 6 thousand options were forfeited and expired with a weighted-average exercise price of $23.46 and $22.36, respectively. As of March 31, 2025, 3.8 million options were outstanding, vested and exercisable, with a weighted-average exercise price of $24.27, weighted average remaining contractual term of 4.0 years and aggregate intrinsic value of $81 million. As of December 31, 2024, 4.2 million options were outstanding, vested and exercisable, with a weighted-average exercise price of $24.18.
14. Reportable Segments
As of January 1, 2025, the Company began managing its Automotive Glass Solutions business together with its Environmental Technologies business, forming the Automotive segment. In addition, the Display Technologies segment has been renamed to Display.
The segment information presented below has been recast for the comparative period presented for the Automotive segment.
As a result of the above changes, the Company has five reportable segments for financial reporting purposes, as follows:
-
Optical Communications – manufactures carrier network and enterprise network components for the telecommunications industry; the carrier network group consists primarily of products and solutions for optical-based communications infrastructure for services such as video, data and voice communications; the enterprise network group consists primarily of optical-based communication networks, including hyperscale data centers, sold to businesses, governments and individuals for their own use.
-
Display – manufactures high quality glass substrates for flat panel displays, including liquid crystal displays and organic light-emitting diodes that are used primarily in televisions, notebook computers, desktop monitors, tablets and handheld devices.
-
Specialty Materials – manufactures products that provide material formulations for glass, glass ceramics and crystals, as well as precision metrology instruments and software to meet demand for unique customer needs across a wide variety of commercial and industrial markets, including materials optimized for mobile consumer electronics, semiconductor equipment optics and consumables, aerospace and defense optics, radiation shielding products, sunglasses and telecommunications components.
-
Automotive – manufactures ceramic substrates and filter products for emissions control systems in mobile applications; as well as glass products for the interior and exterior of vehicles.
-
Life Sciences – develops, manufactures, and supplies laboratory products, including labware, equipment, media, serum and reagents, enabling workflow solutions for drug discovery and bioproduction.
All other businesses that do not meet the quantitative threshold for separate reporting have been grouped as Hemlock and Emerging Growth Businesses. Net sales for this group are mainly attributable to HSG, an operating segment that produces solar and semiconductor products. The emerging growth businesses primarily consist of Pharmaceutical Technologies and the Emerging Innovations Group.
The chief operating decision maker (“CODM”) of the Company is the Company's chief executive officer. The CODM assesses performance and decides how to allocate resources, including employees, financial or capital resources, based on segment net income, which includes certain overhead allocations directly attributable to each of the segments. The CODM considers actual-to-actual variances on a quarterly basis when making decisions about allocating capital and other resources to the segments and to assesses the performance for each segment.
Financial results for the reportable segments are prepared on a basis consistent with the internal disaggregation of financial information to assist the CODM in making internal operating decisions. As a significant portion of segment revenues and expenses are denominated in currencies other than the U.S. dollar, management believes it is important to understand the impact on segment net sales and segment net income of translating these currencies into U.S. dollars. Therefore, the Company utilizes constant-currency reporting for the Optical Communications, Display, Specialty Materials, Automotive and Life Sciences segments to exclude the impact on segment sales and segment net income from the Japanese yen, South Korean won, Chinese yuan, New Taiwan dollar, Mexican peso and euro, as applicable to the segment. The Company believes that the use of constant-currency reporting allows management to understand our results without the volatility of currency fluctuation, analyze underlying trends in the businesses and establish operational goals and forecasts. The most significant constant-currency adjustment relates to the Japanese yen exposure within the Display segment.
The constant-currency rates established for core performance measures are internally derived long-term management estimates, which are closely aligned with the Company’s hedging instrument rates. These hedging instruments may include, but are not limited to, foreign exchange forward or option contracts and foreign-denominated debt. Effective January 1, 2025, management updated the constant-currency rates and the updated rates were applied prospectively beginning with reporting periods in 2025. Comparative results were not recast and are reported based on the 2024 rates.
Constant-currency rates used are as follows and are applied to the respective periods presented and to all foreign exchange exposures during the period, even though the Company may be less than 100% hedged:
| Currency | Japanese yen | South Korean won | Chinese yuan | New Taiwan dollar | Euro | Mexican peso | ||||||||||||||
| 2024 Rate | ¥107 | ₩1,175 | ¥6.7 | NT$31 | €0.81 | MX$20 | ||||||||||||||
| 2025 Rate | ¥120 | ₩1,250 | ¥6.9 | NT$31 | €0.88 | MX$21 |
In addition, certain income and expenses are excluded from segment net income (loss) and included in the unallocated amounts in the reconciliation of reportable segment net income (loss) to net income. These items are not used by the CODM in allocating resources or evaluating the results of the segments and include the following: the impact of translating Japanese yen-denominated debt, the impact of the translated earnings contracts, acquisition-related costs, certain discrete tax items and other tax-related adjustments, restructuring, impairment and other charges and credits, certain litigation, regulatory and other legal matters, pension mark-to-market adjustments, and other items which do not reflect the ongoing operating results of the segment. Although these amounts are excluded from segment results, they are included in reported consolidated results.
Corning’s administrative and staff functions are performed on a centralized basis and such costs and expenses are allocated among the segments differently than they would be for stand-alone financial reporting purposes. These include certain costs and expenses of shared services, such as information technology, human resources, legal, finance and supply chain management. Expenses that are not allocated to the segments are included in the reconciliation of reportable segment net income (loss) to net income. Segment net income (loss) may not be consistent with measures used by other companies.
The following provides selected segment information as described above:
Segment information (in millions):
| Optical Communications | Display | Specialty Materials | Automotive | Life Sciences | Hemlock and Emerging Growth Businesses | Total | |||||||||||||||||||||||||||||||||||
| Three months ended March 31, 2025 | |||||||||||||||||||||||||||||||||||||||||
| Segment net sales | $ | 1,355 | $ | 905 | $ | 501 | $ | 440 | $ | 234 | $ | 244 | $ | 3,679 | |||||||||||||||||||||||||||
| Less: | |||||||||||||||||||||||||||||||||||||||||
| Research, development and engineering expenses (1) | 77 | 25 | 67 | 35 | 6 | 26 | 236 | ||||||||||||||||||||||||||||||||||
| Depreciation (2) | 65 | 102 | 35 | 41 | 16 | 30 | 289 | ||||||||||||||||||||||||||||||||||
| Other segment items (3) | 954 | 471 | 305 | 278 | 195 | 206 | 2,409 | ||||||||||||||||||||||||||||||||||
| Income tax provision (benefit) (4) | 58 | 64 | 20 | 18 | 4 | (2) | 162 | ||||||||||||||||||||||||||||||||||
| Segment net income (loss) | $ | 201 | $ | 243 | $ | 74 | $ | 68 | $ | 13 | $ | (16) | $ | 583 | |||||||||||||||||||||||||||
| Investment in affiliated companies, at equity | $ | 5 | $ | 91 | $ | 17 | $ | — | $ | — | $ | 186 | $ | 299 | |||||||||||||||||||||||||||
| Segment assets (5) | $ | 3,768 | $ | 6,613 | $ | 2,506 | $ | 2,412 | $ | 767 | $ | 1,907 | $ | 17,973 | |||||||||||||||||||||||||||
| Capital expenditures | $ | 97 | $ | 46 | $ | 31 | $ | 12 | $ | 3 | $ | 50 | $ | 239 |
| Optical Communications | Display | Specialty Materials | Automotive | Life Sciences | Hemlock and Emerging Growth Businesses | Total | |||||||||||||||||||||||||||||||||||
| Three months ended March 31, 2024 | |||||||||||||||||||||||||||||||||||||||||
| Segment net sales | $ | 930 | $ | 872 | $ | 454 | $ | 491 | $ | 236 | $ | 275 | $ | 3,258 | |||||||||||||||||||||||||||
| Less: | |||||||||||||||||||||||||||||||||||||||||
| Research, development and engineering expenses (1) | 65 | 26 | 60 | 38 | 6 | 21 | 216 | ||||||||||||||||||||||||||||||||||
| Depreciation (2) | 66 | 116 | 36 | 43 | 17 | 27 | 305 | ||||||||||||||||||||||||||||||||||
| Other segment items (3) | 671 | 476 | 303 | 311 | 196 | 202 | 2159 | ||||||||||||||||||||||||||||||||||
| Income tax provision (4) | 28 | 53 | 11 | 21 | 4 | 8 | 125 | ||||||||||||||||||||||||||||||||||
| Segment net income | $ | 100 | $ | 201 | $ | 44 | $ | 78 | $ | 13 | $ | 17 | $ | 453 | |||||||||||||||||||||||||||
| Investment in affiliated companies, at equity | $ | 4 | $ | 98 | $ | 15 | $ | — | $ | 3 | $ | 181 | $ | 301 | |||||||||||||||||||||||||||
| Segment assets (5) | $ | 3,326 | $ | 7,616 | $ | 2,514 | $ | 2,513 | $ | 787 | $ | 1,680 | $ | 18,436 | |||||||||||||||||||||||||||
| Capital expenditures | $ | 36 | $ | 73 | $ | 33 | $ | 9 | $ | 5 | $ | 30 | $ | 186 |
(1)Research, development and engineering expenses include direct project spending that is identifiable to a segment.
(2)Depreciation expense for Corning’s reportable segments includes an allocation of depreciation of corporate property not specifically identifiable to a segment.
(3)Other segment items for each reportable segment primarily includes the cost of materials, salaries, wages and benefits, including variable compensation, and selling, general and administrative expenses.
(4)Income tax provision (benefit) reflects a tax rate of 21%.
(5)Segment assets include inventory, accounts receivable, property, plant and equipment, net of accumulated depreciation and associated equity companies.
The following table presents a reconciliation of net sales of reportable segments to consolidated net sales (in millions):
| Three months ended March 31, | |||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||
| Net sales of reportable segments | $ | 3,435 | $ | 2,983 | |||||||||||||||||||
| Net sales of Hemlock and Emerging Growth Businesses | 244 | 275 | |||||||||||||||||||||
| Impact of constant-currency reporting (1) | (227) | (283) | |||||||||||||||||||||
| Consolidated net sales | $ | 3,452 | $ | 2,975 |
(1)This amount primarily represents the impact of foreign currency adjustments in the Display segment.
The following table presents a reconciliation of net income of reportable segments to consolidated net income (in millions):
| Three months ended March 31, | |||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||
| Net income of reportable segments | $ | 599 | $ | 436 | |||||||||||||||||||
| Net (loss) income of Hemlock and Emerging Growth Businesses | (16) | 17 | |||||||||||||||||||||
| Unallocated amounts: | |||||||||||||||||||||||
| Impact of constant-currency reporting | (180) | (226) | |||||||||||||||||||||
| Translated earnings contract (loss) gain, net | (101) | 39 | |||||||||||||||||||||
| Translation (loss) gain on Japanese yen-denominated debt, net | (43) | 81 | |||||||||||||||||||||
| Research, development, and engineering expenses | (34) | (42) | |||||||||||||||||||||
| Amortization of intangibles | (28) | (30) | |||||||||||||||||||||
| Interest expense, net | (63) | (61) | |||||||||||||||||||||
| Income tax benefit | 107 | 54 | |||||||||||||||||||||
| Restructuring, impairment and other charges and credits | 7 | 9 | |||||||||||||||||||||
| Other corporate items | (63) | (52) | |||||||||||||||||||||
| Net income | $ | 185 | $ | 225 |
In April 2025, the Company, through a wholly-owned subsidiary, acquired 100% ownership interest of a U.S. based manufacturing business, which will be reported as part of our Hemlock and Emerging Growth businesses. The Company is currently in the process of evaluating the fair value of the total consideration transferred, which includes an initial cash payment of $17 million that was paid at closing and approximately $112 million to be paid in 2025, as well as evaluating the assets acquired, liabilities assumed and any potential goodwill. We expect to complete the valuation and initial accounting for the acquisition, including all required disclosures under applicable accounting standards, by the end of the second quarter of 2025.
Next: Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations