Note 6 - Earnings Per Common Share

9 Months Ended

Sep. 30, 2021

Notes to Financial Statements

Earnings Per Share [Text Block]

6. Earnings per Common Share

The following table sets forth the computation of basic and diluted earnings per common share (in millions, except per share amounts):

	Three months ended				Nine months ended
	September 30,				September 30,
	2021		2020		2021		2020
Net income attributable to Corning Incorporated	$	371	$	427	$	1,419	$	260
Less: Series A convertible preferred stock dividend				24		24		73
Less: Excess consideration paid for redemption of preferred shares						803
Net income available to common shareholders – basic		371		403		592		187
Plus: Series A convertible preferred stock dividend				24
Net income available to common shareholders – diluted	$	371	$	427	$	592	$	187
Weighted-average common shares outstanding – basic		852		760		821		760
Effect of dilutive securities:
Employee stock options and other dilutive securities		14		14		16		8
Series A convertible preferred stock (1)				115
Weighted-average common shares outstanding – diluted		866		889		837		768
Basic earnings per common share	$	0.44	$	0.53	$	0.72	$	0.25
Diluted earnings per common share	$	0.43	$	0.48	$	0.71	$	0.24
Anti-dilutive potential shares excluded from diluted earnings per common share:
Series A convertible preferred stock (1)						41		115
Employee stock options and awards				3				7
Total		—		3		41		122

⁽¹⁾ For the nine months ended September 30, 2021 and 2020, the Preferred Stock was anti-dilutive; therefore, it was excluded from the calculation of diluted earnings per share.

Fixed Rate Cumulative Convertible Preferred Stock, Series A 

As of December 31, 2020, Corning had 2,300 outstanding shares of Fixed Rate Cumulative Convertible Preferred Stock, Series A (the “Preferred Stock”).   

On January 16, 2021, the Preferred Stock became convertible into 115 million Common Shares, in whole or in part, at the option of the holder, Samsung Display Co., Ltd. (“SDC”). On April 5, 2021, Corning and SDC executed a Share Repurchase Agreement ("SRA"). 

Pursuant to the SRA, on April 8, 2021 ("Initial Closing Date"), the Preferred Stock was fully converted into 115 million Common Shares.  The common equivalent for the preferred shares was prospectively removed from the calculation of diluted earnings per share.

The Company repurchased 35 million of the converted Common Shares pursuant to the SRA and excluded them from the weighted-average common shares outstanding for the calculation of the Company’s basic and diluted earnings per share.  The redemption of these Common Shares resulted in a reduction of retained earnings of $803 million which reduced the net income available to common shareholders.

The remaining 80 million Common Shares are outstanding and are included in the weighted-average common shares outstanding for the calculation of the Company’s basic and diluted earnings per share. 

Refer to Note 14 (Shareholders’ Equity) to the consolidated financial statements for more information.