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Note 17 - Shareholders' Equity
 12 Months Ended
Dec. 31, 2015
Stockholders' Equity Note [Abstract]  
Stockholders' Equity Note Disclosure [Text Block]
17.      Shareholders’ Equity

Fixed Rate Cumulative Convertible Preferred Stock, Series A

On January 15, 2014, Corning designated a new series of its preferred stock as Fixed Rate Cumulative Convertible Preferred Stock, Series A, par value $100 per share, and issued 1,900 shares of Preferred Stock at an issue price of $1 million per share, for an aggregate issue price of $1.9 billion, to Samsung Display in connection with the acquisition of its equity interests in Samsung Corning Precision Materials.  Corning also issued to Samsung Display an additional amount of Preferred Stock at closing, for an aggregate issue price of $400 million in cash.

Dividends on the Preferred Stock are cumulative and accrue at the annual rate of 4.25% on the per share issue price of $1 million.  The dividends are payable quarterly as and when declared by the Company’s Board of Directors.  The Preferred Stock ranks senior to our common stock with respect to payment of dividends and rights upon liquidation.  The Preferred Stock is not redeemable except in the case of a certain deemed liquidation event, the occurrence of which is under the control of the Company.  The Preferred Stock is convertible at the option of the holder and the Company upon certain events, at a conversion rate of 50,000 shares of Corning’s common stock per one share of Preferred Stock, subject to certain anti-dilution provisions.  As of December 31, 2015, the Preferred Stock has not been converted, and none of the anti-dilution provisions have been triggered.  Following the seventh anniversary of the closing of the acquisition of Samsung Corning Precision Materials, the Preferred Stock will be convertible, in whole or in part, at the option of the holder.  The Company has the right, at its option, to cause some or all of the shares of Preferred Stock to be converted into Common Stock, if, for 25 trading days (whether or not consecutive) within any period of 40 consecutive trading days, the closing price of Common Stock exceeds $35 per share.  If the aforementioned right becomes exercisable before the seventh anniversary of the closing, the Company must first obtain the written approval of the holders of a majority of the Preferred Stock before exercising its conversion right.  The Preferred Stock does not have any voting rights except as may be required by law.

Share Repurchases

2013 Repurchase Program

On October 31, 2013, as part of the share repurchase program announced on April 24, 2013 (the “2013 Repurchase Program”), Corning entered into an accelerated share repurchase (“ASR”) agreement (the “2013 ASR agreement”) with JP Morgan Chase Bank, National Association, London Branch (“JPMC”).  Under the 2013 ASR agreement, Corning agreed to purchase $1 billion of its common stock, in total, with an initial delivery by JPMC of 47.1 million shares based on the current market price, and payment of $1 billion made by Corning to JPMC.  The payment to JPMC was recorded as a reduction to shareholders’ equity, consisting of an $800 million increase in treasury stock, which reflects the value of the initial 47.1 million shares received upon execution, and a $200 million decrease in other-paid-in capital, which reflects the value of the stock held back by JPMC pending final settlement.  On January 28, 2014, the 2013 ASR agreement was completed.  Corning received an additional 10.5 million shares on January 31, 2014 to settle the 2013 ASR agreement.  In total, Corning purchased 57.6 million shares based on the average daily volume weighted-average price of Corning’s common stock during the term of the 2013 ASR agreement, less a discount.

In addition to the shares repurchased through the 2013 ASR agreement, we repurchased 61.3 million shares of common stock on the open market for approximately $1 billion, as part of the 2013 Repurchase Program.  This program was executed between the second quarter of 2013 and the first quarter of 2014, with a total of 118.9 million shares repurchased for approximately $2 billion.

March 2014 Repurchase Program

On March 4, 2014, as part of the $2 billion share repurchase program announced on October 22, 2013 and made effective concurrent with the closing of Corning’s acquisition of Samsung Corning Precision Materials on January 15, 2014 (the “March 2014 Repurchase Program”), Corning entered into an ASR agreement (the “2014 ASR agreement”) with Citibank N.A. (“Citi”).  Under the 2014 ASR agreement, Corning agreed to purchase $1.25 billion of its common stock, with an initial delivery by Citi of 52.5 million shares based on the current market price, and payment of $1.25 billion made by Corning to Citi.  The 2014 ASR agreement was completed on May 28, 2014, and Corning received an additional 8.7 million shares to settle the 2014 ASR agreement.  In total, Corning repurchased 61.2 million shares based on the average daily volume weighted-average price of Corning’s common stock during the term of the 2014 ASR agreement, less a discount.

In addition to the shares repurchased through the 2014 ASR agreement, in the year ended December 31, 2014, we repurchased 36.9 million shares of common stock on the open market for approximately $750 million, as part of the March 2014 Repurchase Program.  This program was completed in the fourth quarter of 2014, with a total of 98.2 million shares repurchased for approximately $2 billion.

December 2014 Repurchase Program

On December 3, 2014, Corning’s Board of Directors authorized the repurchase of up to $1.5 billion shares of common stock (the “December 2014 Repurchase Program”) between the date of announcement and December 31, 2016.  In the year ended December 31, 2015, we repurchased 70.4 million shares of common stock for approximately $1.5 billion as part of the December 2014 Repurchase Program, which was completed in the third quarter of 2015.

2015 Repurchase Programs

On July 15, 2015, Corning’s Board of Directors approved a $2 billion share repurchase program (the “July 2015 Repurchase Program”) and on October 26, 2015 the Board of Directors authorized an additional $4 billion share repurchase program (together with the July 2015 Repurchase Program, the “2015 Repurchase Programs”).  The 2015 Repurchase Programs permit Corning to effect repurchases from time to time through a combination of open market repurchases, privately negotiated transactions, advance repurchase agreements and/or other arrangements.

On October 28, 2015, Corning entered into an ASR with Morgan Stanley & Co. LLC (“Morgan Stanley”) to repurchase $1.25 billion of Corning’s common stock (the “2015 ASR agreement”).  The 2015 ASR was executed under the July 2015 Repurchase Program.  Under the 2015 ASR agreement, Corning made a $1.25 billion payment to Morgan Stanley on October 29, 2015 and received an initial delivery of approximately 53.1 million shares of Corning common stock from Morgan Stanley on the same day.  The payment to Morgan Stanley was recorded as a reduction to shareholders’ equity, consisting of $1 billion increase in treasury stock, which reflects the value of the initial 53.1 million shares received upon execution, and a $250 million decrease in other-paid-in capital, which reflects the value of the stock held back by Morgan Stanley pending final settlement.  On January 19, 2016, the 2015 ASR agreement was completed.  Corning received an additional 15.9 million shares on January 22, 2016 to settle the 2015 ASR agreement.  In total, Corning purchased 69 million shares based on the average daily volume weighted-average price of Corning’s common stock during the term of the 2015 ASR agreement, less a discount.

In addition to the shares repurchased through the 2015 ASR agreement, we repurchased 98 million shares of common stock on the open market for approximately $2 billion, as part of the December 2014 Repurchase Program and the July 2015 Repurchase Program, resulting in a total of 151 million shares repurchased during 2015.

The following table presents changes in capital stock for the period from January 1, 2013 to December 31, 2015 (in millions):

 
Common stock
 
Treasury stock
 
Shares
 
Par value
 
Shares
 
Cost
                   
Balance at December 31, 2012
1,649
 
$
825
 
(179)
 
$
(2,773)
                   
Shares issued to benefit plans and for option exercises
12
   
6
       
(1)
Shares purchased for treasury
         
(82)
   
(1,316)
Other, net
         
(1)
   
(9)
Balance at December 31, 2013
1,661
 
$
831
 
(262)
 
$
(4,099)
                   
Shares issued to benefit plans and for option exercises
11
   
5
       
(2)
Shares purchased for treasury
         
(135)
   
(2,612)
Other, net
         
(1)
   
(14)
Balance at December 31, 2014 (1)
1,672
 
$
836
 
(398)
 
$
(6,727)
                   
Shares issued to benefit plans and for option exercises
9
   
4
       
(1)
Shares purchased for treasury
         
(151)
   
(2,978)
Other, net
         
(2)
   
(19)
Balance at December 31, 2015
1,681
 
$
840
 
(551)
 
$
(9,725)

(1)
On January 15, 2014, in conjunction with the acquisition of Corning Precision Materials, Corning issued 2,300 Fixed Rate Cumulative Convertible Preferred Stock, Series A (“Preferred Stock”), par value $100 per share, at an issue price of $1 million per share, for an aggregate issue price of $2.3 billion.  There have been no further issuances or conversions of Preferred Stock since 2014.

Accumulated Other Comprehensive Income

A summary of changes in the components of accumulated other comprehensive income (loss), including our proportionate share of equity method investee’s accumulated other comprehensive income (loss), is as follows (in millions) (1):

 
Foreign
currency
translation
adjustments
and other
 
Unamortized
actuarial gains
(losses) and
prior service
(costs) credits
 
Net
unrealized
gains
(losses) on
investments
 
Net
unrealized
gains
(losses) on
designated
hedges
 
Accumulated
other
comprehensive
income (loss)
                             
Balance at December 31, 2012
$
1,174 
 
$
(820)
 
$
(16)
 
$
18 
 
$
356 
Other comprehensive income before reclassifications (4)
$
(756)
 
$
283 
 
$
1 
 
$
56 
 
$
(416)
Amounts reclassified from accumulated other comprehensive income (2)
       
(10)
   
(1)
   
(81)
   
(92)
Equity method affiliates (3)
 
74 
   
119 
   
2 
   
1 
   
196 
Net current-period other comprehensive (loss) income
 
(682)
   
392 
   
2 
   
(24)
   
(312)
Balance at December 31, 2013
$
492 
 
$
(428)
 
$
(14)
 
$
(6)
 
$
44 
                             
Other comprehensive income before reclassifications (5)
$
(821)
 
$
(172)
 
$
4 
 
$
10 
 
$
(979)
Amounts reclassified from accumulated other comprehensive income (2)
 
(136)
   
18 
   
1 
   
(6)
   
(123)
Equity method affiliates (3)
 
(116)
   
(127)
   
(6)
         
(249)
Net current-period other comprehensive (loss) income
 
(1,073)
   
(281)
   
(1)
   
4 
   
(1,351)
Balance at December 31, 2014
$
(581)
 
$
(709)
 
$
(15)
 
$
(2)
 
$
(1,307)
                             
Other comprehensive income before reclassifications (6)
$
(487)
 
$
(59)
       
$
(18)
 
$
(564)
Amounts reclassified from accumulated other comprehensive income (2)
       
105 
 
$
1 
   
(20)
   
86 
Equity method affiliates (3)
 
(103)
   
75 
         
2 
   
(26)
Net current-period other comprehensive (loss) income
 
(590)
   
121 
   
1 
   
(36)
   
(504)
Balance at December 31, 2015
$
(1,171)
 
$
(588)
 
$
(14)
 
$
(38)
 
$
(1,811)

(1)
All amounts are after tax.  Amounts in parentheses indicate debits to accumulated other comprehensive income.

(2)
Tax effects of reclassifications are disclosed separately in this Note 17.

(3)
Tax effects related to equity method affiliates are not significant.

(4)
Amounts are net of total tax expense of $(197) million, including $(33) million related to the hedges component and $(164) million related to the retirement plans component.

(5)
Amounts are net of total tax benefit of $96 million, including $(7) million related to the hedges component and $104 million related to the retirement plans component and $(1) million related to the investments component.

(6)
Amounts are net of total tax benefit of $41 million, including $35 million related to the retirement plans component and $6 million related to the hedges component.

(In millions)

Reclassifications Out of Accumulated Other Comprehensive Income (AOCI) by Component (1)
Details about AOCI Components
Amount reclassified from AOCI
 
Affected line item
in the consolidated
statements of income
Years ended December 31,
 
2015
 
2014
 
2013
 
                     
Foreign currency translation adjustment
     
$
136 
       
Transaction-related gain, net
         
136 
       
Net of tax
                     
Amortization of net actuarial (loss) gain
$
(168)
 
$
(29)
 
$
15 
 
(2)
Amortization of prior service credit
 
1 
         
1 
 
(2)
   
(167)
   
(29)
   
16 
 
Total before tax
   
62 
   
11 
   
(6)
 
Tax benefit (expense)
 
$
(105)
 
$
(18)
 
$
10 
 
Net of tax
                     
Realized (losses) gains on investments
$
(1)
 
$
(1)
 
$
1 
 
Other (expense) income, net
                   
Tax expense
 
$
(1)
 
$
(1)
 
$
1 
 
Net of tax
                     
Realized gains on designated hedges
$
20 
 
$
3 
       
Sales
   
6 
   
7 
 
$
38 
 
Cost of sales
               
91 
 
Other (expense) income, net
   
26 
   
10 
   
129 
 
Total before tax
   
(6)
   
(4)
   
(48)
 
Tax expense
 
$
20 
 
$
6 
 
$
81 
 
Net of tax
                     
Total reclassifications for the period
$
(86)
 
$
123 
 
$
92 
 
Net of tax

(1)
Amounts in parentheses indicate debits to the statement of income.

(2)
These accumulated other comprehensive income components are included in net periodic pension cost.  See Note 13 (Employee Retirement Plans) to the Consolidated Financial Statements for additional details.