Note 4 - Revenue

3 Months Ended

Mar. 31, 2021

Notes to Financial Statements

Revenue from Contract with Customer [Text Block]

4. Revenue

Revenue Disaggregation Table

The following table shows revenues by major product categories, similar to the Company’s reportable segment disclosure. Within each product category, contract terms, conditions and economic factors affecting the nature, amount, timing and uncertainty of revenue recognition and cash flows are substantially similar. The commercial markets and selling channels are also similar. Except for an inconsequential amount of revenue for Telecommunications products, product category revenues are recognized at point in time when control transfers to the customer.

Revenues by product category are as follows (in millions):

	Three months ended
	March 31,
	2021			2020
Display products	$	888		$	633
Telecommunication products		937			791
Specialty glass products		451			352
Environmental substrate and filter products		442			307
Life science products		301			251
All Other (1)		271			57
Total revenue	$	3,290		$	2,391
Impact of foreign currency movements (2)		(27	)		33
Cumulative adjustment related to customer contract (3)					105
Net sales of reportable segments and All Other	$	3,263		$	2,529

(1)	The Company obtained a controlling interest in HSG during the third quarter of 2020 and has consolidated results in "All Other" as of September 9, 2020.
(2)	This amount primarily represents the impact of foreign currency adjustments in the Display Technologies segment.
(3)	Amount represents the negative impact of a cumulative adjustment to reduce revenue in the amount of $105 million recorded during the first quarter of 2020. The adjustment was associated with a previously recorded commercial benefit asset, reflected as a prepayment, to a customer with a long-term supply agreement that substantially exited its production of LCD panels.

Refer to Note 16 (Reportable Segments) to the consolidated financial statements for additional information.

Contract Assets and Liabilities

Contract assets, such as incremental costs to obtain or fulfill contracts, are an insignificant component of Corning’s revenue recognition process. Most of Corning’s cost of fulfillment as a manufacturer of products is classified as inventory, fixed assets and intangible assets, which are accounted for under the respective guidance for those asset types. Other costs of contract fulfillment are immaterial due to the nature of the products and their respective manufacturing processes.

Contract liabilities include deferred revenue, other advanced payments and customer deposits. Other advanced payments are not significant to operations and are classified as part of other accrued liabilities in the financial statements. Customer deposits are predominately related to Display products and deferred revenue is predominately related to obtaining a controlling interest in HSG. 

Customer Deposits

As of March 31, 2021 and December 31, 2020, Corning had customer deposits of approximately $1.3 billion and $1.4 billion, respectively.  A majority of these customer deposits were non-refundable and allowed customers to secure rights to an amount of glass produced by Corning under long-term supply agreements.  The duration of these long-term supply agreements ranges up to 10 years.  As glass is shipped to customers, Corning will recognize revenue and issue credit memoranda to reduce the amount of the customer deposit liability.

In the three months ended March 31, 2021 and 2020, customer deposits used were $93 million and $41 million, respectively.  As of March 31, 2021 and December 31, 2020, $1.1 billion was recorded as other long-term liabilities.  The remaining $217 million and $211 million, respectively, were classified as other current liabilities. 

Deferred Revenue

As of March 31, 2021 and December 31, 2020, Corning had deferred revenue of approximately $1 billion.  The deferred revenue was related to the performance obligations of non-refundable consideration previously received by HSG from its customers under long term supply agreements.

The 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 shipped compared to the remaining contractual units.

As of March 31, 2021 and December 31, 2020, $834 million and $872 million, respectively, were classified as long-term liabilities and $157 million and $152 million, respectively, were classified as current liabilities.  

Refer to Note 3 (HSG Transactions) to the consolidated financial statements for more information.