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Commitments, Contingencies and Guarantees | 12 Months Ended
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Dec. 31, 2018
Commitments, Contingencies and Guarantees [Abstract] |
Commitments, Contingencies and Guarantees | 12.Commitments, Contingen cies and Guarantees ﻿ The amounts of our obligations follow (in millions): ﻿
﻿ |  |  |  |  |  |  |  |  |  |  |  |  |  |
﻿ |  |  |  |  |  |  |  |  |  |  |  |  |  |
﻿ |  |  |  | Amount of commitment and contingency expiration per period
﻿ | Total |  | Less than 1 year |  | 1 to 3 years |  | 3 to 5 years |  | 5 years and thereafter
﻿Performance bonds and guarantees | $ | 152 |  | $ | 23 |  | $ | 4 |  | $ | 2 |  | $ | 123
﻿Stand-by letters of credit (1) |  | 84 |  |  | 71 |  |  | 8 |  |  |  |  |  | 5
﻿Credit facility to equity company |  | 4 |  |  | 4 |  |  |  |  |  |  |  |  |
﻿Subtotal of commitment expirations per period | $ | 240 |  | $ | 98 |  | $ | 12 |  | $ | 2 |  | $ | 128
﻿ |  |  |  |  |  |  |  |  |  |  |  |  |  |
﻿Purchase obligations (2) | $ | 339 |  | $ | 214 |  | $ | 56 |  | $ | 28 |  | $ | 41
﻿Capital expenditure obligations (3) |  | 412 |  |  | 412 |  |  |  |  |  |  |  |  |
﻿Total debt (4) |  | 5,642 |  |  |  |  |  | 362 |  |  | 670 |  |  | 4,610
﻿Interest on long-term debt (5) |  | 5,117 |  |  | 231 |  |  | 450 |  |  | 408 |  |  | 4,028
﻿Capital leases and financing obligations |  | 393 |  |  | 4 |  |  | 11 |  |  | 132 |  |  | 246
﻿Imputed interest on capital leases and financing obligations |  | 205 |  |  | 20 |  |  | 38 |  |  | 37 |  |  | 110
﻿Minimum rental commitments |  | 581 |  |  | 82 |  |  | 133 |  |  | 111 |  |  | 255
﻿Amended PCC Plan |  | 185 |  |  | 50 |  |  | 85 |  |  | 50 |  |  |
﻿Uncertain tax positions (6) |  | 95 |  |  |  |  |  |  |  |  |  |  |  |
﻿Subtotal of contractual obligation payments due by period (6) | $ | 12,969 |  | $ | 1,013 |  | $ | 1,135 |  | $ | 1,436 |  | $ | 9,290
﻿Total commitments and contingencies (6) | $ | 13,209 |  | $ | 1,111 |  | $ | 1,147 |  | $ | 1,438 |  | $ | 9,418
﻿
| (1) |  | At December 31, 2018, $39 million of the $84 million was included in other accrued liabilities on our consolidated balance sheets.
| (2) |  | Purchase obligations are enforceable and legally binding obligations which primarily consist of raw material and energy-related take-or-pay contracts.
| (3) |  | Capital expenditure obligations primarily reflect amounts associated with our capital expansion activities.
| (4) |  | Total debt above is stated at maturity value, and excludes interest rate swap gains/losses and bond discounts.
| (5) |  | The estimate of interest payments assumes interest is paid through the date of maturity or expiration of the related debt, based upon stated rates in the respective debt instruments.
| (6) |  | At December 31, 2018, $95 million was included on our balance sheet related to uncertain tax positions.
﻿ We are required, at the time a guarantee is issued, 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. Generally, third-party guarantees provided by Corning are limited to certain financial guarantees, including stand-by letters of credit and performance bonds, and the incurrence of contingent liabilities in the form of purchase price adjustments related to attainment of milestones. These guarantees have various terms, and none of these guarantees are individually significant. We believe a significant majority of these guarantees and contingent liabilities will expire without being funded. ﻿ Minimum rental commitments under leases outstanding at December 31, 2018 follow (in millions): ﻿
﻿ |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
﻿ |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
﻿ | 2019 |  | 2020 |  | 2021 |  | 2022 |  | 2023 |  | 2024 and thereafter
﻿ | $ | 82 |  |  | 72 |  | $ | 61 |  | $ | 53 |  | $ | 58 |  | $ | 255
﻿ Total rental expense was $156 million, $135 million and $105 million for 2018, 2017 and 2016, respectively. ﻿ Product warranty liability accruals at December 31, 2018 and 2017 were insignificant. 12.Commitments, Contingencies and Guarantees (continued) ﻿ The ability of certain subsidiaries and affiliated companies to transfer funds is limited by provisions of foreign government regulations, affiliate agreements and certain loan agreements. At December 31, 2018, the amount of equity subject to such restrictions for consolidated subsidiaries and affiliated companies was not significant. While this amount is legally restricted, it does not result in operational difficulties since we have generally permitted subsidiaries to retain a majority of equity to support growth programs. ﻿ 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. ﻿ Asbestos Claims ﻿ Corning and PPG Industries, Inc. each owned 50% of the capital stock of Pittsburgh Corning Corporation (“PCC”). PCC filed for Chapter 11 reorganization in 2000 and the Modified Third Amended Plan of Reorganization for PCC (the “Plan”) became effective in April 2016. At December 31, 2016, the Company’s liability under the Plan was $290 million, which is required to be paid through a series of fixed payments beginning in the second quarter of 2017. Payments of $35 million and $70 million were made in June 2018 and June 2017, respectively. At December 31, 2018, the total amount of payments due in years 2019 through 2022 is $185 million, of which $50 million is due in the second quarter of 2019 and is classified as a current liability. The remaining $135 million is classified as a non-current liability. ﻿ Non-PCC Asbestos Claims ﻿ Corning is a defendant in certain cases alleging injuries from asbestos unrelated to PCC (the “non-PCC asbestos claims”) which had been stayed pending the confirmation of the Plan. The stay was lifted on August 25, 2016. At December 31, 2018 and December 31, 2017, the amount of the reserve for these non-PCC asbestos claims was estimated to be $146 million and $14 7 million, respectively. The reserve balance as of December 31, 2018 represents the undiscounted projection of claims and related legal fees for the estimated life of the litigation. ﻿ Dow Corning Chapter 11 Related Matters ﻿ Until June 1, 2016, Corning and The Dow Chemical Company (“Dow”) each owned 50% of the common stock of Dow Corning Corporation (“Dow Corning”). On May 31, 2016, Corning and Dow realigned their ownership interest in Dow Corning. In connection with the realignment, Corning retained its indirect ownership interest in the Hemlock Semiconductor Group (HSG) and formed a new entity which had been capitalized by Dow Corning with $4.8 billion. Following the realignment, Corning no longer owned any interest in Dow Corning. In connection with the realignment, Corning agreed to indemnify Dow Corning for 50% of Dow Corning’s non-ordinary course, pre-closing liabilities to the extent such liabilities exceed the amounts reserved for them by Dow Corning as of May 31, 2016, including two legacy Dow Corning matters: the Dow Corning Breast Implant Litigation, and the Dow Corning Bankruptcy Pendency Interest Claims. ﻿ Dow Corning Breast Implant Litigation ﻿ In May 1995, Dow Corning filed for bankruptcy protection to address pending and claimed liabilities arising from many thousands of breast implant product lawsuits. On June 1, 2004, Dow Corning emerged from Chapter 11 with a Plan of Reorganization (the “Plan”) which provided for the settlement or other resolution of implant claims. The Plan also includes releases for Corning and Dow as shareholders in exchange for contributions to the Plan. 12.Commitments, Contingencies and Guarantees (continued) ﻿ Under the terms of the Plan, Dow Corning has established and funded a Settlement Trust and a Litigation Facility, referred to above, to provide a means for tort claimants to settle or litigate their claims. Inclusive of insurance, Dow Corning has paid approximately $1.8 billion to the Settlement Trust. As of May 31, 2016, Dow Corning had recorded a reserve for breast implant litigation of $290 million. In the event Dow Corning’s total liability for these claims exceeds such amount, Corning may be required to indemnify Dow Corning for up to 50% of the excess liability. At December 31, 2018, Dow Corning had recorded a reserve for breast implant litigation of $263 million. ﻿ Dow Corning Bankruptcy Pendency Interest Claims ﻿ As a separate matter arising from the bankruptcy proceedings, Dow Corning is defending claims asserted by a number of commercial creditors who claim additional compounded interest at default and state statutory judgment rates as well as attorneys’ fees and other enforcement costs, during the period from May 1995 through June 2004. As of May 31, 2016, Dow Corning had recorded a reserve for these claims of $107 million. In the event Dow Corning’s liability for these claims exceeds such amount, Corning may be required to indemnify Dow Corning for up to 50% of the excess liability, subject to certain conditions and limits. At December 31, 2018, Dow Corning estimated the liability to commercial creditors to be $82 million. ﻿ Environmental Litigation ﻿ Corning has been named by the Environmental Protection Agency (the Agency) under the Superfund Act, or by state governments under similar state laws, as a potentially responsible party for 15 active hazardous waste sites. Under the Superfund Act, all parties who may have contributed any waste to a hazardous waste site, identified by the Agency, are jointly and severally liable for the cost of cleanup unless the Agency agrees otherwise. It is Corning’s policy to accrue for its estimated liability related to Superfund sites and other environmental liabilities related to property owned by Corning based on expert analysis and continual monitoring by both internal and external consultants. At December 31, 2018 and December 31, 2017, Corning had accrued approximately $30 million (undiscounted) and $38 million (undiscounted), respectively, for the estimated liability for environmental cleanup and related litigation. Based upon the information developed to date, management believes that the accrued reserve is a reasonable estimate of the Company’s liability and that the risk of an additional loss in an amount materially higher than that accrued is remote.

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