Note 2 - Revenue

6 Months Ended

Jun. 30, 2022

Notes to Financial Statements

Revenue from Contract with Customer [Text Block]

2. 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. 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				Six months ended
	June 30,				June 30,
	2022		2021		2022		2021
Telecommunication products	$	1,313	$	1,075	$	2,511	$	2,012
Display products		759		934		1,665		1,822
Specialty glass products		485		483		978		934
Environmental substrate and filter products		336		409		737		851
Life science products		304		312		611		613
Polycrystalline silicon and all other products		418		288		793		559
Total revenue	$	3,615	$	3,501	$	7,295	$	6,791
Impact of foreign currency movements (1)		147		3		211		(24	)
Net sales of reportable segments and Hemlock and Emerging Growth Businesses	$	3,762	$	3,504	$	7,506	$	6,767

⁽¹⁾ This amount primarily represents the impact of foreign currency adjustments in the Display Technologies segment.

Refer to Note 14 (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 fulfillment costs as a manufacturer of products are classified as inventory, fixed assets and intangible assets, which are accounted for under the respective guidance for those asset types. Other contract fulfillment costs are immaterial due to the nature of the products and their respective manufacturing processes.

Contract liabilities include deferred revenue, other advance payments and customer deposits. Other advance payments are not significant to operations and are classified as part of other accrued liabilities in the consolidated financial statements. Customer deposits are predominately related to Display products and deferred revenue is predominately related to Hemlock Semiconductor Group (“Hemlock”).

Customer Deposits

As of June 30, 2022 and December 31, 2021, Corning had customer deposits of approximately $1.2 billion and $1.3 billion, respectively.  Most of these customer deposits were non-refundable and allowed customers to secure rights to products produced by Corning under long-term supply agreements.  The duration of these long-term supply agreements ranges up to 10 years.  As products are shipped to customers, Corning will recognize revenue and reduce the amount of the customer deposit liability.

Customer deposits used were $48 million and $131 million, respectively, and $28 million and $123 million, respectively in the three and six months ended June 30, 2022 and 2021.  As of June 30, 2022 and December 31, 2021, $1 billion and $1.1 billion, respectively, were recorded as other long-term liabilities.  The remaining $190 million and $223 million, respectively, were classified as other current liabilities. 

Deferred Revenue

As of June 30, 2022 and December 31, 2021, Corning had deferred revenue of approximately $892 million and $912 million, respectively.  The deferred revenue was primarily related to the performance obligations of non-refundable consideration previously received by Hemlock 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.  

As of June 30, 2022 and December 31, 2021, $780 million and $764 million, respectively, were classified as long-term liabilities and $112 million and $148 million, respectively, were classified as current liabilities.