Corning GLW · USD

18. Reportable SegmentsAs of January 1, 2025, the Company began managing its Automotive Glass Solutions business together with its Environmental Technologies business, forming its Automotive segment, and its Display Technologies segment was renamed to “Display.”The segment information presented below has been recast for the comparative periods presented for the Automotive segment.The Company has determined that it has five reportable segments for financial reporting purposes, organized primarily based on product offerings, as follows:•Optical Communications – manufactures carrier network and enterprise network components for the telecommunications industry; the carrier network group consists primarily of products and solutions for optical-based communications infrastructure for services such as video, data and voice communications; the enterprise network group consists primarily of optical-based communication networks, including hyperscale data centers, sold to businesses, governments and individuals for their own use.•Display – manufactures high quality glass substrates for flat panel displays, including liquid crystal displays and organic light-emitting diodes that are used primarily in televisions, notebook computers, desktop monitors, tablets and handheld devices.•Specialty Materials – manufactures products that provide material formulations for glass, glass ceramics and crystals, as well as precision metrology instruments and software to meet demand for unique customer needs across a wide variety of commercial and industrial markets, including materials optimized for mobile consumer electronics, semiconductor equipment optics and consumables, aerospace and defense optics, radiation shielding products, sunglasses and telecommunications components.•Automotive – manufactures ceramic substrates and filter products for emissions control systems in mobile applications; as well as technical glass and optic products and solutions for the interior and exterior of vehicles.•Life Sciences – develops, manufactures, and supplies laboratory products, including labware, equipment, media, serum and reagents, enabling workflow solutions for drug discovery and bioproduction.All other businesses that do not meet the quantitative threshold for separate reporting have been grouped as Hemlock and Emerging Growth Businesses.

RevenueDisaggregated RevenueThe following table shows revenue by major product category, 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 around revenue recognition and cash flows are substantially similar. The commercial markets and selling channels are also similar. Except for an insignificant number of telecommunications products, product category revenues are recognized at the point in time when control transfers to the customer.The following table presents revenues by product category (in millions):Year ended December 31,202520242023Optical communications products$6,274 $4,657 $4,012 Display products2,965 2,727 2,694 Specialty material products2,194 2,000 1,854 Automotive products1,777 1,704 1,787 Life science products959 933 922 Polycrystalline silicon products955 865 1,014 All other products505 232 305 Total Revenue$15,629 $13,118 $12,588 Customer DepositsAs of December 31, 2025 and 2024, Corning had customer deposits of approximately $1.5 billion and $1.1 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, generally over a period of up to 10 years. As products are delivered to customers, Corning will recognize revenue and reduce the amount of the customer deposit liability. For the years ended December 31, 2025, 2024 and 2023, customer deposits recognized were $142 million, $195 million and $103 million, respectively. For the year ended December 31, 2025, the Company received $490 million relating to new customer contracts. The amounts received in the years ended December 31, 2024 and 2023 were not material.Refer to Note 9 (Other Assets and Other Liabilities) for additional information.Deferred Revenue As of December 31, 2025 and 2024, Corning had deferred revenue of approximately $775 million and $833 million, respectively. Deferred revenue was primarily related to the performance obligations of non-refundable consideration previously received by HSG from its customers under long term supply agreements.Deferred revenue is tracked on a per-customer contract-unit basis.

Commitments, Contingencies and GuaranteesGuaranteesThe Company is required, at the time a guarantee is issued, to recognize a liability for the fair value or market value of the obligation it assumes. In the normal course of business, the Company does not routinely provide significant third-party guarantees. Generally, third-party guarantees provided by Corning are limited to certain financial guarantees, including stand-by letters of credit and performance bonds, and the incurrence of contingent liabilities in the form of purchase consideration adjustments related to attainment of milestones. These guarantees have various terms and none of these guarantees are individually significant. The Company believes a significant majority of these guarantees and contingent liabilities will expire without being funded.Purchase CommitmentsPurchase obligations are enforceable and legally binding obligations. The Company has purchase commitments primarily for raw materials and energy-related take-or-pay contracts. Commitments made under these obligations as of December 31, 2025 are as follows (in millions): Amount of commitment expiration per period Less than 1 year1 to 3 years3 to 5 years5 years and thereafterPurchase obligations$283 $181 $103 $332 Litigation, Environmental and IndemnificationsCorning is a defendant in various lawsuits and is subject to various claims that arise in the normal course of business, the most significant of which are summarized below. In the opinion of management, the likelihood that the ultimate disposition of these matters will have a material adverse effect on Corning’s consolidated financial position, liquidity, or results of operations, is remote.Dow Corning Environmental ClaimsBeginning in September 2019, The Dow Chemical Company (“Dow”) formally notified Corning of certain environmental matters for which Dow asserts that it has or will experience losses arising from remediation and response at a number of sites. Subject to certain conditions and limits, Corning may have been required to indemnify Dow for up to 50% of such losses. In September 2025, Corning entered into a settlement agreement with Dow to fully resolve all outstanding environmental matters previously asserted under historical indemnification provisions. The resolution did not have a material impact on the Company’s consolidated financial statements for the periods presented. No further obligation remains under the settlement agreement.

DebtDebt consisted of the following (in millions): December 31,20252024Current portion of long-term debt$795 $326 Short-term borrowings, average rate 3.25%9 Current portion of long-term debt and short-term borrowings$804 $326 Long-term debtDebentures, 6.85%, due 2029$150 $156 Debentures, 7.25%, due 2036249 249 Debentures, 4.70%, due 2037297 297 Debentures, 5.75%, due 2040401 397 Debentures, 4.75%, due 2042497 497 Debentures, 5.35%, due 2048545 545 Debentures, 3.90%, due 2049396 396 Debentures, 4.375%, due 2057744 743 Debentures, 5.85%, due 2068297 297 Debentures, 5.45%, due 20791,087 1,087 Yen-denominated debentures, 0.722%, due 202564 Yen-denominated debentures, 0.992%, due 2027237 236 Yen-denominated debentures, 1.043%, due 2028163 163 Yen-denominated debentures, 1.219%, due 2030159 159 Yen-denominated debentures, 1.153%, due 2031199 198 Yen-denominated debentures, 1.583%, due 203763 63 Yen-denominated debentures, 1.513%, due 203938 37 Euro-denominated notes, 3.875%, due 2026352 311 Euro-denominated notes, 4.125%, due 2031642 568 Financing Leases, average discount rate 5.86%, due through 2045 (Note 8)1,232 174 Other, average rate 3.86%, due through 2042677 574 Total long-term debt, including current portion8,425 7,211 Less current portion of long-term debt795 326 Long-term debt$7,630 $6,885 Based on borrowing rates currently available to us for loans with similar terms and maturities, the fair value of long-term debt was $7.3 billion and $6.4 billion compared to recorded book values of $7.6 billion and $6.9 billion as of December 31, 2025 and 2024, 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. Corning did not have outstanding commercial paper as of December 31, 2025 and 2024.On July 28, 2025, the Company entered into an agreement for a new revolving credit facility (the “Revolving Credit Facility”), which replaced the Company’s existing $1.5 billion credit agreement dated June 6, 2022. The Revolving Credit Facility provides a committed $1.5 billion unsecured multi-currency line of credit and expires July 28, 2030. As of December 31, 2025, there were no outstanding amounts under the Revolving Credit Facility.Corning is the obligor to Chinese yuan-denominated unsecured variable rate loan facilities, whose proceeds are used for capital investment and general corporate purposes.

Income Taxes The following table presents the components of income before income taxes (in millions):Year ended December 31,202520242023U.S. companies$1,390 $303 $105 Non-U.S. companies662 510 711 Income before income taxes$2,052 $813 $816 The following table presents the current and deferred amounts of the provision for income taxes, based on the location of the taxing authority (in millions):Year ended December 31,202520242023Current:Federal$(339)$(6)$(8)State and municipal(26)(6)(13)Foreign(300)(242)(222)Deferred: Federal324 63 76 State and municipal19 6 7 Foreign12 (36)(8)Provision for income taxes$(310)$(221)$(168)The following table presents the reconciliation of the statutory U.S. federal income tax rate to the effective tax rate (in millions):Year ended December 31, 2025U.S. federal statutory tax rate$431 21.0%State and local income tax, net of federal (national) income tax effect (1)1—%Foreign tax effects:China:Withholding taxes874.2%Other0—%Other foreign jurisdictions361.8%Effect of changes in tax laws or rates enacted in the current period0—%Effect of cross-border tax laws:Foreign derived intangible income(79)(3.8%)Other90.4%Tax credits:Foreign tax credits(113)(5.5%)Other(19)(0.9%)Changes in valuation allowances0—%Nontaxable or nondeductible items:Share-based compensation(36)(1.8%)Government incentives (IRA credits)(32)(1.6%)Other170.8%Changes in unrecognized tax benefits291.4%Other adjustments(21)(1.0%)Effective tax rate$310 15.1%(1)State tax predominantly relates to Pennsylvania, California, New Jersey, Illinois, Iowa and Georgia.The following table presents the reconciliation of the statutory U.S. federal income tax rate to the effective tax rate:Year ended December 31,20242023Statutory U.S. federal income tax rate21.0%21.0%State income tax provision (benefit), net of federal effect0.2(0.3)Non-deductible Items9.15.2Release of cumulative translation losses6.0Audit settlements & change in reserve4.84.8Differential arising from foreign earnings (1)1.60.3Remeasurement of deferred tax assets and liabilities(0.8)(0.3)Stock compensation(0.9)(2.1)Valuation allowance(2.3)5.7Foreign derived intangible income(2.7)(2.3)Tax credits(3.9)(6.9)Non-Taxable Items(5.6)(4.0)Other items, net0.7(0.5)Effective tax rate27.2%20.6%(1)Includes impact of intercompany asset sales.During the year ended December 31, 2025, the Company distributed $896 million from foreign subsidiaries to their respective U.S. parent companies.

14. Share-Based CompensationThe following table presents share-based compensation cost and the unrecognized compensation cost by award type (in millions): Amount of share-based compensation cost recognizedUnrecognized compensation costWeighted-averageremaining term (in years) Year ended December 31,December 31, 2025202420232025Time-based restricted stock and restricted stock units$117 $141 $172 $53 1.7Performance-based restricted stock units161 123 36 41 1.5Stock Options 2 Other8 9 8 Total share-based compensation cost (1)$286 $273 $218 (1)The income tax benefit realized from share-based compensation was $42 million, $9 million and $17 million, respectively, for the years ended December 31, 2025, 2024 and 2023.As of December 31, 2025, there were approximately 17 million unissued common shares available for future grants authorized under the Plans.Incentive Stock PlansTime-Based Restricted Stock and Restricted Stock UnitsThe following table summarizes the changes in non-vested time-based restricted stock and restricted stock units during the year ended December 31, 2025: Number of shares (in thousands)Weighted-average grant-date fair valueNon-vested as of December 31, 20248,456$32.94 Granted1,15952.02 Vested(4,083)32.81 Forfeited(167)37.10 Non-vested as of December 31, 20255,365$37.03 The total fair value of time-based restricted stock and restricted stock units that vested during the years ended December 31, 2025, 2024 and 2023 was approximately $134 million, $208 million and $118 million, respectively. Performance-Based Restricted Stock UnitsThe following table summarizes the changes in non-vested performance-based restricted stock units during the year ended December 31, 2025: Number of shares (in thousands)Weighted-average grant-date fair valueNon-vested as of December 31, 20244,040$33.28 Granted1,50750.27 Vested(1,632)33.70 Performance adjustments1,00347.71 Forfeited(71)47.16 Non-vested as of December 31, 20254,847$41.24 The total fair value of performance-based restricted stock units that vested during the years ended December 31, 2025, 2024 and 2023 was approximately $55 million, $47 million and $120 million, respectively.Stock OptionsDuring the year ended December 31, 2025, 1.7 million options were exercised and 9 thousand options were forfeited and expired with a weighted-average exercise price of $24.35 and $21.35, respectively. As of December 31, 2025, 2.

LeasesThe following table presents the components of lease cost (in millions):Year ended December 31,202520242023Operating lease cost$165 $170 $171 Variable lease cost55 55 57 Short-term lease cost4 3 2 Finance lease cost Amortization of right-of-use assets45 34 35 Interest on lease liabilities21 7 8 Total lease cost$290 $269 $273 The following table presents the supplemental cash flow information for amounts included in the measurement of lease liabilities (in millions):December 31,202520242023Cash paid for amounts included in the measurement of lease liabilitiesOperating cash outflows from operating leases$147 $139 $153 Operating cash outflows from interest on finance leases$8 $7 $8 Financing cash outflows from finance leases$346 $30 $36 Right-of-use assets obtained in exchange for lease liabilitiesOperating leases$140 $11 $156 Finance leases$1,389 $21 $30 The following table presents the weighted-average remaining lease term and weighted-average discount rate:December 31,20252024Weighted-average remaining lease term (in years) Operating leases12.613.2 Finance leases6.111.6Weighted-average discount rate Operating leases4.5%4.5% Finance leases5.9%4.5%The following table presents supplemental consolidated balance sheet information (in millions):December 31,20252024Operating leasesOther assets$860 $796 Other accrued liabilities$97 $95 Other liabilities$846 $785 Total operating lease liabilities$943 $880 Finance leasesProperty, plant and equipment (1)$1,279 $265 Accumulated depreciation$(147)$(118)Property, plant and equipment, net$1,132 $147 Current portion of long-term debt and short-term borrowings $84 $30 Long-term debt$1,148 $144 Total finance lease liabilities (1)$1,232 $174 (1)During the year ended December 31, 2025, the Company recognized $1.4 billion in right-of-use assets and lease liabilities primarily associated with recently commenced leases, as discussed below. In addition, the Company recognized $318 million in 48D credits, which reduced the right-of-use asset, and repaid $346 million in principal payments, primarily driven by a $315 million payment made in December 2025 on the Facility Lease as discussed below, which reduced the lease liability.

AcquisitionIn April 2025, the Company acquired 100% of the equity interests in a U.S. solar module manufacturing facility. The total fair value of purchase consideration was $278 million, consisting of $17 million in cash paid at closing, $111 million in notes payable due within 2025, and $150 million in potential contingent consideration. Of the $111 million in notes payable, payments of $33 million and $42 million were made in the third quarter and fourth quarter, respectively, and the remaining amount is expected to be paid in 2026. The contingent consideration is comprised of annual earn-out payments with a final payment due in the sixth post-closing year. Earn-out payments are based on cumulative free cash flow, with no limitation on the total amount, and the final payment is the lesser of $98 million or an amount based on the net liquidation value of the acquired entity at the time payment is due. The contingent payments are classified as liabilities and measured on a recurring basis at fair value, utilizing the income approach with Level 3 inputs, with changes in the fair value reflected within selling, general and administrative expenses on the consolidated statements of income. Fair value at the acquisition date and as of December 31, 2025 was $104 million and $88 million, respectively, for the annual earn-out payments, with the change in fair value due to changes in key assumptions. Fair value of the final payment at the acquisition date and as of December 31, 2025 was $46 million and $48 million, respectively, with the increase due to interest accretion. Key assumptions include projections for revenue, margins, market prices and discount rates. The total purchase consideration of $278 million was allocated to the identifiable assets acquired and liabilities assumed based on their estimated fair values at the acquisition date and consisted of the following (in millions):Inventories$41 Property, plant and equipment167 Accounts payable(36)Other net assets (1)8 Total identified net assets180 Fair value of purchase consideration278 Goodwill (2)$98 (1)Includes approximately $52 million in other assets and $52 million in other liabilities relating to acquired operating leases for the manufacturing facility.(2)Goodwill reflects the expected synergies, expanded market opportunities and other benefits from vertically integrating the acquired solar module business into the Company’s operations.