Income Taxes

12 Months Ended

Dec. 31, 2024

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The following table presents the components of income before income taxes (in millions):

	Year ended December 31,
	2024		2023		2022
U.S. companies	$	303	$	105	$	1,157
Non-U.S. companies	510		711		640
Income before income taxes	$	813	$	816	$	1,797

The following table presents the current and deferred amounts of the provision for income taxes, based on the location of the taxing authority (in millions):

	Year ended December 31,
	2024		2023		2022
Current:
Federal	$	(77)	$	(82)	$	(191)
State and municipal	(6)		(13)		(16)
Foreign	(171)		(148)		(250)
Deferred:
Federal	63		76		52
State and municipal	6		7		8
Foreign	(36)		(8)		(14)
Provision for income taxes	$	(221)	$	(168)	$	(411)

The following table presents the reconciliation of the statutory U.S. federal income tax rate to the effective tax rate:

	Year ended December 31,
	2024		2023		2022
Statutory U.S. federal income tax rate	21.0	%	21.0	%	21.0	%
State income tax provision (benefit), net of federal effect	0.2		(0.3)		0.7
Non-deductible Items	9.1		5.2		0.5
Release of cumulative translation losses	6.0
Audit settlements & change in reserve	4.8		4.8		3.7
Differential arising from foreign earnings (1)	1.6		0.3		2.2
Remeasurement of deferred tax assets and liabilities	(0.8)		(0.3)		(0.1)
Stock compensation	(0.9)		(2.1)		(0.8)
Valuation allowance	(2.3)		5.7		2.1
Foreign derived intangible income	(2.7)		(2.3)		(2.7)
Tax credits	(3.9)		(6.9)		(3.3)
Non-Taxable Items	(5.6)		(4.0)
Intercompany loan adjustment					0.6
Other items, net	0.7		(0.5)		(1.0)
Effective tax rate	27.2	%	20.6	%	22.9	%

(1)Includes impact of intercompany asset sales.

During the year ended December 31, 2024, the Company distributed $600 million from foreign subsidiaries to their respective U.S. parent companies. As of December 31, 2024, Corning has approximately $1.6 billion of indefinitely reinvested foreign earnings. It remains impracticable to calculate the tax cost of repatriating unremitted earnings which are considered indefinitely reinvested.

The following table presents the tax effects of temporary differences and carryforwards that gave rise to significant portions of the deferred tax assets and liabilities (in millions):

	December 31,
	2024		2023
Loss and tax credit carryforwards (1)	$	218	$	275
Other assets	246		245
Research and development capitalization	428		362
Asset impairments and restructuring reserves	32		43
Postretirement medical and life benefits	90		103
Other accrued liabilities	375		319
Other employee benefits	291		344
Gross deferred tax assets	1,680		1,691
Valuation allowances (1)	(173)		(207)
Total deferred tax assets	1,507		1,484
Intangible and other assets	(110)		(117)
Fixed assets	(212)		(223)
Finance leases	(192)		(209)
Total deferred tax liabilities	(514)		(549)
Net deferred tax assets	$	993	$	935

(1)The Company also has Luxembourg deferred tax asset net operating losses of up to $2.9 billion that have a remote possibility of realization and therefore, are not recognized in the deferred tax table above.

Net deferred tax assets on the consolidated balance sheets consisted of the following (in millions):

	December 31,
	2024		2023
Deferred tax assets	$	1,130	$	1,153
Other liabilities	(137)		(218)
Net deferred tax assets	$	993	$	935

The following table presents details of the deferred tax assets for loss and tax credit carryforwards (in millions):

			Expiration
	Total		2025-2029		2030-2034		2035-2044		Indefinite
Net operating losses	$	213	$	50	$	16	$	25	$	122
Tax credits	5		1		4
Balance as of December 31, 2024	$	218	$	51	$	20	$	25	$	122

The following table presents the changes in the deferred tax valuation allowance (in millions):

	2024		2023		2022
Balance as of January 1	$	207	$	166	$	138
Additions	26		66		81
Reductions	(60)		(25)		(53)
Balance as of December 31	$	173	$	207	$	166

The following table presents the reconciliation of the beginning and ending amount of unrecognized tax benefits (in millions):

	2024		2023		2022
Balance as of January 1	$	373	$	206	$	178
Additions based on tax positions related to the current year	41		54		10
Additions for tax positions of prior years	6		127		24
Reductions for tax positions of prior years	(6)		(3)		(5)
Settlements and lapse of statute of limitations	(3)		(11)		(1)
Balance as of December 31	$	411	$	373	$	206

During 2020, the Internal Revenue Service (“IRS”) opened an audit for tax years 2015-2018. In addition, during 2023, the IRS opened an audit for tax years 2019-2020. The Company does not expect additional material exposure for the tax years under audit. However, if upon conclusion of these matters, the ultimate determination of taxes owed is for an amount materially different than the current position, the overall tax expense and effective tax rate could be materially impacted in the period of adjustment.

The additions for tax positions of prior years were primarily due to tax audits, development of tax court cases and tax law changes in various jurisdictions.

As of December 31, 2024, unrecognized tax benefits that would impact the Company’s effective tax rate if recognized were $203 million.

Interest and penalties associated with uncertain tax positions are recognized as part of tax expense. For the years ended December 31, 2024, 2023 and 2022, the amount recognized was not material.

It is possible that the amount of unrecognized tax benefits will change due to one or more of the following events during the next twelve months: audit activity, tax payments, or final decisions in matters that are the subject of controversy in various jurisdictions. The Company believes that adequate tax reserves are provided for these matters. As of December 31, 2024, the Company is not expecting any significant movements in the uncertain tax benefits in the next twelve months.

Corning Incorporated, as the common parent company, and all 80%-or-more-owned of its U.S. subsidiaries join in the filing of consolidated U.S. federal income tax returns. The statute of limitations is closed for all periods ending through December 31, 2013. All returns for periods ended through December 31, 2014, have been audited by and settled with the IRS.

Corning Incorporated and its U.S. subsidiaries file income tax returns on a combined, unitary or stand-alone basis in multiple state and local jurisdictions, which generally have statutes of limitations ranging from 3 to 5 years. Various state income tax returns are currently in the process of examination or administrative appeal. The Company does not expect any material proposed adjustments from any of these audits.

Corning’s foreign subsidiaries file income tax returns in the countries where their operations are located. Generally, these countries have statutes of limitations ranging from 3 to 10 years. The statute of limitations is closed through the following years in these major jurisdictions: China (2015), Japan (2017), Taiwan (2019) and South Korea (2015).

Corning Precision Materials, a South Korean subsidiary, is currently appealing certain tax assessments and tax refund claims for tax years 2010 through 2019. The Company was required to deposit the disputed tax amounts with the South Korean government as a condition of its appeal of any tax assessment. During 2023, $99 million was no longer under dispute and was refunded to the Company. The non-current receivable balance was $253 million and $261 million as of December 31, 2024 and December 31, 2023, respectively, for the amount on deposit with the South Korean government. Corning believes that it is more likely than not that the Company will prevail in the appeals process relating to these matters.