Note 12 - Debt

12 Months Ended

Dec. 31, 2021

Notes to Financial Statements

Debt Disclosure [Text Block]

(In millions)

	December 31,
	2021		2020
Current portion of long-term debt	$	55	$	81
Short-term borrowings				75
Current portion of long-term debt and short-term borrowings	$	55	$	156
Long-term debt
Debentures, 8.875%, due 2021			$	63
Debentures, 2.90%, due 2022				374
Debentures, 3.70%, due 2023				249
Medium-term notes, average rate 7.66%, due through 2023	$	45		45
Debentures, 3.90%, due 2049		395		394
Debentures, 5.45%, due 2079		1,086		1,084
Yen-denominated debentures, 0.698%, due 2024		182		203
Yen-denominated debentures, 0.722%, due 2025		87		96
Yen-denominated debentures, 0.992%, due 2027		407		453
Yen-denominated debentures, 1.043%, due 2028		264		293
Yen-denominated debentures, 1.153%, due 2031		270		301
Yen-denominated debentures, 1.513%, due 2039		51		56
Debentures, 6.85%, due 2029		160		161
Yen-denominated debentures, 1.219%, due 2030		216		239
Debentures, callable, 7.25%, due 2036		249		249
Debentures, 4.70%, due 2037		296		296
Yen-denominated debentures, 1.583%, due 2037		86		96
Debentures, 5.75%, due 2040		396		396
Debentures, 4.75%, due 2042		496		496
Debentures, 5.35%, due 2048		544		543
Debentures, 4.375%, due 2057		743		743
Debentures, 5.85%, due 2068		297		296
Financing Leases, average discount rate 4.4%, due through 2044		183		173
Other, average rate 4.33%, due through 2043		591		598
Total long-term debt, including current portion		7,044		7,897
Less current portion of long-term debt		55		81
Long-term debt	$	6,989	$	7,816

Based on borrowing rates currently available to us for loans with similar terms and maturities, the fair value of long-term debt was $8.3 billion and $9.4 billion at December 31, 2021 and 2020, respectively, compared to recorded book values of $7.0 billion and $7.8 billion at December 31, 2021 and December 31, 2020, respectively. The Company measures the fair value of its long-term debt using Level 2 inputs based primarily on current market yields for its existing debt traded in the secondary market.

On a quarterly basis, Corning will recognize the foreign currency translation gains and losses resulting from changes in exchanges rates within accumulated other comprehensive loss in shareholders’ equity. Cash proceeds from loans and debt issuances are disclosed as financing activities, and cash payments for interest and bond redemptions are disclosed as operating activities and financing activities, respectively, in the consolidated statements of cash flows. 

Corning did not have outstanding commercial paper at December 31, 2021 and 2020.

Corning maintains a revolving credit agreement (the “Revolving Credit Agreement”) which provides a committed $1.5 billion unsecured multi-currency line of credit and expires on August 15, 2023. At December 31, 2021, there were no outstanding amounts under the Revolving Credit Agreement.

The following table shows debt maturities by year at  December 31, 2021 (in millions) ⁽¹⁾:

2022		2023		2024		2025		2026		Thereafter
$	55		141	$	293	$	166	$	36	$	6,353

(1) Excludes interest rate swap gains, bond discounts and deferred expenses.

Debt Issuances and Repayments

2021

In the third quarter of 2021, Corning redeemed $250 million of 3.7% debentures due in 2023, paying a premium of $19 million by exercising our make-whole call.  The bond redemption resulted in a $20 million loss during the same quarter.  The total payment of $269 million is disclosed in financing activities in the consolidated statements of cash flows.

In the second quarter of 2021, Corning redeemed $375 million of 2.9% debentures due in 2022, paying a premium of $10 million by exercising our make-whole call.  The bond redemption resulted in an $11 million loss during the same quarter.  The total payment of $385 million is disclosed in financing activities in the consolidated statements of cash flows.

Losses on bond redemption have been recorded in other income (expense), net on the consolidated statements of income during the quarter in which they occurred. 

Borrowings under the three unsecured variable rate loan facilities for the year ended December 31, 2021, totaled 1,764 million Chinese yuan, or approximately $277 million.

As of December 31, 2021, the 25 billion Japanese yen facility, equivalent to $217 million, has not been drawn upon. 

2020

During the fourth quarter of 2020, Corning redeemed $100 million of 7.0% debentures due in 2024 with a carrying amount of $99 million, paying a $21 million make-whole call premium. The total payment of $121 million is disclosed in financing activities in the consolidated statements of cash flows. The redemption resulted in a loss of $22 million.

In conjunction with the change in control of HSG on September 9, 2020, a variable interest rate loan of $175 million, maturing on September 8, 2021, was made to DC HSC Holdings, LLC, now a consolidated subsidiary of Corning.  As of December 31, 2021, the third-party debt has been fully repaid.  Refer to Note 3 (Investments) to the consolidated financial statements for additional information.

During the second quarter of 2020, Corning established an incremental liquidity facility for 25 billion Japanese yen, equivalent to $232 million with a maturity of three years. As of December 31, 2020, the facility has not been drawn upon.

In the first quarter of 2020, Corning established two unsecured variable rate loan facilities for 1,050 million Chinese yuan, equivalent to $150 million, and 749 million Chinese yuan, equivalent to $105 million, each with a maturity of five years.  In the fourth quarter of 2020, Corning established a third unsecured variable rate loan facility for 546 million Chinese yuan, equivalent to $84 million, with a maturity of five years. Borrowings under these loan facilities for the year ended December 31, 2020, totaled 1,691 million Chinese yuan, or approximately $243 million. These Chinese yuan-denominated proceeds will not be converted into USD and will be used for capital projects. Payments of principal and interest on the Notes will be in Chinese yuan, or should yuan be unavailable due to circumstances beyond Corning’s control, a USD equivalent. These loans are the sole obligations of the subsidiary borrowers and are not guaranteed by any other Corning entity.