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Note 16 - Reportable Segments
 9 Months Ended
Sep. 30, 2015
Segment Reporting [Abstract]  
Segment Reporting Disclosure [Text Block]
16.      Reportable Segments

Our reportable segments are as follows:

·  
Display Technologies – manufactures glass substrates primarily for flat panel liquid crystal displays.

·  
Optical Communications – manufactures carrier network and enterprise network components for the telecommunications industry.

·  
Environmental Technologies – manufactures ceramic substrates and filters for automotive and diesel applications.

·  
Specialty Materials – manufactures products that provide more than 150 material formulations for glass, glass ceramics and fluoride crystals to meet demand for unique customer needs.

·  
Life Sciences – manufactures glass and plastic labware, equipment, media and reagents to provide workflow solutions for scientific applications.

All other reportable segments that do not meet the quantitative threshold for separate reporting have been grouped as “All Other.” This group is primarily comprised of the results of Corning Precision Materials’ non-LCD business and new product lines and development projects that involve the use of various technologies for new products such as advanced flow reactors and adjacency businesses in pursuit of thin, strong glass.

We prepared the financial results for our reportable segments on a basis that is consistent with the manner in which we internally disaggregate financial information to assist in making internal operating decisions.  We included the earnings of equity affiliates that are closely associated with our reportable segments in the respective segment’s net income.  We have allocated certain common expenses among reportable segments differently than we would for stand-alone financial information.  Segment net income may not be consistent with measures used by other companies.  The accounting policies of our reportable segments are the same as those applied in the consolidated financial statements.

Reportable Segments (in millions)

 
Display
Technologies
 
Optical
Communications
 
Environmental
Technologies
 
Specialty
Materials
 
Life
Sciences
 
All
Other
 
Total
Three months ended
  September 30, 2015
                                       
 
Net sales
$
757 
 
$
747 
 
$
257 
 
$
288 
 
$
211 
 
$
12 
 
$
2,272 
 
Depreciation (1)
$
147 
 
$
41 
 
$
32 
 
$
29 
 
$
15 
 
$
9 
 
$
273 
 
Amortization of purchased intangibles
     
$
7 
             
$
5 
       
$
12 
 
Research, development and engineering expenses (2)
$
28 
 
$
33 
 
$
21 
 
$
27 
 
$
6 
 
$
34 
 
$
149 
 
Restructuring, impairment and other charges
                 
$
2 
             
$
2 
 
Equity in earnings of affiliated companies
$
(3)
                         
$
4 
 
$
1 
 
Income tax (provision) benefit
$
(119)
 
$
(34)
 
$
(19)
 
$
(23)
 
$
(9)
 
$
19 
 
$
(185)
 
Net income (loss) (3)
$
255 
 
$
70 
 
$
38 
 
$
46 
 
$
18 
 
$
(38)
 
$
389 

 
Display
Technologies
 
Optical
Communications
 
Environmental
Technologies
 
Specialty
Materials
 
Life
Sciences
 
All
Other
 
Total
Three months ended
  September 30, 2014
                                       
 
Net sales
$
1,009 
 
$
698 
 
$
282 
 
$
327 
 
$
214 
 
$
10 
 
$
2,540 
 
Depreciation (1)
$
166 
 
$
38 
 
$
29 
 
$
30 
 
$
15 
 
$
9 
 
$
287 
 
Amortization of purchased intangibles
     
$
3 
             
$
6 
       
$
9 
 
Research, development and engineering expenses (2)
$
31 
 
$
35 
 
$
23 
 
$
35 
 
$
6 
 
$
43 
 
$
173 
 
Restructuring, impairment and other charges
$
3 
                         
$
(3)
 
 
 
 
Equity in earnings of affiliated companies
$
(3)
                         
$
4 
 
$
1 
 
Income tax (provision) benefit
$
(136)
 
$
(35)
 
$
(28)
 
$
(25)
 
$
(9)
 
$
21 
 
$
(212)
 
Net income (loss) (3)
$
387 
 
$
68 
 
$
57 
 
$
43 
 
$
19 
 
$
(41)
 
$
533 

 
Display
Technologies
 
Optical
Communications
 
Environmental
Technologies
 
Specialty
Materials
 
Life
Sciences
 
All
Other
 
Total
Nine months ended
  September 30, 2015
                                       
 
Net sales
$
2,354 
 
$
2,244 
 
$
799 
 
$
832 
 
$
619 
 
$
32 
 
$
6,880 
 
Depreciation (1)
$
455 
 
$
122 
 
$
93 
 
$
82 
 
$
45 
 
$
29 
 
$
826 
 
Amortization of purchased intangibles
     
$
24 
             
$
15 
       
$
39 
 
Research, development and engineering expenses (2)
$
78 
 
$
101 
 
$
67 
 
$
87 
 
$
17 
 
$
123 
 
$
473 
 
Restructuring, impairment and other charges
     
$
(1)
       
$
5 
             
$
4 
 
Equity in earnings of affiliated companies
$
(8)
                         
$
12 
 
$
4 
 
Income tax (provision) benefit
$
(387)
 
$
(100)
 
$
(64)
 
$
(66)
 
$
(26)
 
$
63 
 
$
(580)
 
Net income (loss) (3)
$
852 
 
$
204 
 
$
132 
 
$
128 
 
$
52 
 
$
(131)
 
$
1,237 

 
Display
Technologies
 
Optical
Communications
 
Environmental
Technologies
 
Specialty
Materials
 
Life
Sciences
 
All
Other
 
Total
Nine months ended
  September 30, 2014
                                       
 
Net sales
$
2,925 
 
$
1,977 
 
$
842 
 
$
886 
 
$
647 
 
$
34 
 
$
7,311 
 
Depreciation (1)
$
510 
 
$
111
 
$
89 
 
$
86 
 
$
46 
 
$
21 
 
$
863 
 
Amortization of purchased intangibles
     
$
7 
             
$
18 
       
$
25 
 
Research, development and engineering expenses (2)
$
117 
 
$
106 
 
$
65 
 
$
102 
 
$
16 
 
$
119 
 
$
525 
 
Restructuring, impairment and other charges
$
42 
 
$
12 
                   
$
(3)
 
$
51 
 
Equity in earnings of affiliated companies
$
(16)
       
$
2 
             
$
13 
 
$
(1)
 
Income tax (provision) benefit
$
(453)
 
$
(85)
 
$
(72)
 
$
(62)
 
$
(26)
 
$
59 
 
$
(639)
 
Net income (loss) (3)
$
878 
 
$
156 
 
$
147 
 
$
113 
 
$
54 
 
$
(140)
 
$
1,208 

(1)
Depreciation expense for Corning’s reportable segments includes an allocation of depreciation of corporate property not specifically identifiable to a segment.

(2)
Research, development and engineering expenses include direct project spending that is identifiable to a segment.

(3)
Many of Corning’s administrative and staff functions are performed on a centralized basis.  Where practicable, Corning charges these expenses to segments based upon the extent to which each business uses a centralized function.  Other staff functions, such as corporate finance, human resources and legal, are allocated to segments, primarily as a percentage of sales.

A reconciliation of reportable segment net income to consolidated net income follows (in millions):

 
Three months ended
September 30,
 
Nine months ended
September 30,
 
2015
 
2014
 
2015
 
2014
Net income of reportable segments
$
427 
 
$
574 
 
$
1,368 
 
$
1,348 
Non-reportable segments
 
(38)
   
(41)
   
(131)
   
(140)
Unallocated amounts:
                     
Net financing costs (1)
 
(31)
   
(27)
   
(80)
   
(86)
Stock-based compensation expense
 
(11)
   
(19)
   
(36)
   
(47)
Exploratory research
 
(32)
   
(24)
   
(86)
   
(75)
Corporate contributions
 
(13)
   
(19)
   
(37)
   
(35)
Equity in earnings of affiliated companies, net of impairments (2)
 
38 
   
94 
   
191 
   
245 
Asbestos settlement
 
9 
   
(5)
   
6 
   
(11)
Unrealized (loss) gain on foreign currency hedges related to translated earnings
 
(200)
   
431 
   
(282)
   
282 
Other corporate items (3)
 
63 
   
50 
   
202 
   
3 
Net income
$
212 
 
$
1,014 
 
$
1,115 
 
$
1,484 

(1)
Net financing costs include interest income, interest expense, and interest costs and investment gains associated with benefit plans.

(2)
Primarily represents the equity earnings of Dow Corning.

(3)
Other corporate items include the tax impact of the unallocated amounts, excluding foreign currency hedges related to translated earnings.