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Note 13 - Financial Instruments

12 Months Ended

Dec. 31, 2023

Notes to Financial Statements

Derivative Instruments and Hedging Activities Disclosure [Text Block]

13. Financial Instruments

The following table summarizes the notional amounts and respective fair values of Corning’s derivative financial instruments on a gross basis as of December 31, 2023 and 2022 (in millions):

		*December 31, 2023*												December 31, 2022
		*Notional amount*				Fair value asset ⁽¹⁾				Fair value liability ⁽¹⁾				Notional amount				Fair value asset ⁽¹⁾				Fair value liability ⁽¹⁾
Derivatives designated as hedging instruments ⁽²⁾:
Foreign exchange and precious metals lease contracts ⁽³⁾		$	241			$	287							$	419			$	104			$	(1	)

Derivatives not designated as hedging instruments:
Foreign exchange contracts			1,988				20			$	(17	)			2,231				44				(49	)
Translated earnings contracts			5,042				324				(80	)			7,543				530				(141	)
Total derivatives		$	7,271			$	631			$	(97	)		$	10,193			$	678			$	(191	)

(1)	All of the Company’s derivative contracts are measured at fair value are classified as Level 2 within the fair value hierarchy. Derivative assets are presented in Other current assets or Other assets. Derivative liabilities are presented in Other current liabilities or Other liabilities. Refer to Note 9 (Other Assets and Other Liabilities) for additional information.
(2)	The amounts above do not include €850 million of euro-denominated debt ($932 million equivalent as of December 31, 2023), which is a non-derivative financial instrument designated as a net investment hedge.
(3)	As of December 31, 2023, derivatives designated as hedging instruments include foreign exchange cash flow hedges with gross notional amounts of $241 million and fair value hedges of leased precious metals with a gross notional amount of 20,160 troy ounces. As of December 31, 2022, derivatives designated as hedging instruments include foreign exchange cash flow hedges with gross notional amounts of $419 million and fair value hedges of leased precious metals with a gross notional amount of 23,152 troy ounces. Fair value assets include designated derivatives pertaining to precious metals lease contracts in the amounts of $229 million and $69 million as of December 31, 2023 and 2022, respectively.

The following table summarizes the total gross notional value for translated earnings contracts as of December 31, 2023 and 2022 (in millions):


		Year ended December 31,
		*2023*			2022
Average rate forward contracts:
Chinese yuan-denominated		$	684		$	479
Japanese yen-denominated			463			93
South Korean won-denominated			1,609			2,117
Other foreign currencies ⁽¹⁾			198			237
Option contracts:
Japanese yen-denominated ⁽²⁾			2,088			4,617
Total gross notional value for translated earning contracts		$	5,042		$	7,543

(1)	Denominational currencies for average rate forward contracts include the New Taiwan dollar, British pound and euro.
(2)	Japanese yen-denominated option contracts include purchased put and call options and zero-cost collars. With respect to the zero-cost collars, the gross notional amount includes the value of the put and call options. However, due to the nature of zero-cost collars, only the put or the call option can be exercised at maturity.

13. Financial Instruments (Continued)

The following tables summarize the effect in the consolidated statements of income relating to Corning’s derivative financial instruments (in millions). The accumulated derivative gain included in accumulated other comprehensive loss on the consolidated balance sheets as of December 31, 2023 and 2022 is $54 million and $19 million, respectively.

		Gain recognized in other comprehensive income (OCI)											Location of gain (loss) reclassified from accumulated OCI into income		Gain (loss) reclassified from accumulated OCI into income
		*2023*				2022				2021			effective (ineffective)		*2023*				2022				2021
Derivatives hedging relationships for cash flow and fair value hedges:
Foreign exchange and precious metals lease contracts		$	81			$	52			$	47		Net sales						$	52			$	14
													Cost of sales		$	49				32				39
													Other income, net			(3	)			(3	)			(1	)
Total cash flow and fair value hedges		$	81			$	52			$	47				$	46			$	81			$	52

		Gain recognized in income
Undesignated derivatives		*2023*				2022				2021			Location of gain recognized in income
Foreign exchange contracts		$	26			$	46			$	38		Other income, net
Translated earnings contracts			161				351				354		Translated earnings contract gain, net
Total undesignated		$	187			$	397			$	392

Net Investment Hedges

In May 2023, Corning designated the full amount of its 2026 Notes and 2031 Notes with a total notional amount of €850 million, which are non-derivative financial instruments, as net investment hedges against our investments in certain European subsidiaries with euro functional currencies. As of December 31, 2023, the net investment hedges are deemed to be effective. During the year ended December 31, 2023, foreign currency losses associated with these net investment hedges recognized in other comprehensive loss was not material.

Refer to Note 10 (Debt) for additional information.

Leased Precious Metals Contracts

The carrying amount of the leased precious metals pool, which is included within property, plant and equipment, net of accumulated depreciation in the consolidated balance sheets, is $90 million and $278 million, respectively, as of December 31, 2023 and 2022. The carrying amount of the leased precious metals pool includes cumulative fair value loss of $239 million and $95 million as of December 31, 2023 and 2022, respectively. These losses are offset by changes in the fair value of the hedges.