Note 18 - Earnings Per Common Share

12 Months Ended

Dec. 31, 2021

Notes to Financial Statements

Earnings Per Share [Text Block]

Basic earnings per common share are computed by dividing income available to common shareholders by the weighted-average number of common shares outstanding for the period. Diluted earnings per common share assumes the issuance of common shares for all potentially dilutive securities outstanding.

The reconciliation of the amounts used to compute basic and diluted earnings per common share from operations is as follows (in millions, except per share amounts):

	Year ended December 31,
	2021		2020		2019
Net income attributable to Corning Incorporated	$	1,906	$	512	$	960
Less: Series A convertible preferred stock dividend		24		98		98
Less: Excess consideration paid for redemption of preferred stock		803
Net income available to common shareholders - basic		1,079		414		862
Plus: Series A convertible preferred stock dividend						98
Net income available to common shareholders - diluted	$	1,079	$	414	$	960
Weighted-average common shares outstanding - basic		828		761		776
Effect of dilutive securities:
Stock options and other dilutive securities		16		11		8
Series A convertible preferred stock (1)						115
Weighted-average common shares outstanding - diluted		844		772		899
Basic earnings per common share	$	1.30	$	0.54	$	1.11
Diluted earnings per common share	$	1.28	$	0.54	$	1.07
Anti-dilutive potential shares excluded from diluted earnings per common share:
Series A convertible preferred stock dividend (1)		31		115
Employee stock options and awards				2		2
Total		31		117		2

(1) For the years ended December 31, 2021 and 2020, the Preferred Stock was anti-dilutive and therefore 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.   

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, SDC.  On April 5, 2021, Corning and SDC executed an SRA. 

Pursuant to the SRA, on the Initial Closing Date, the Preferred Stock was fully converted into 115 million Common Shares.  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 17 (Shareholders’ Equity) to the consolidated financial statements for more information.