CORNING INC /NY | 2013 | FY | 3

Other Income, Net

“Other income, net” in Corning’s consolidated statements of income includes the following (in millions):

 
Years ended December 31,
   
2013
 
2012
 
2011
                 
Royalty income from Samsung Corning Precision Materials
$
56
 
$
83 
 
$
219 
Foreign currency transaction and hedge gains (losses), net
 
500
   
8 
   
(43)
Loss on retirement of debt
       
(26)
     
Foreign government subsidy
 
55
           
Other, net
 
56
   
18 
   
(58)
Total
$
667
 
$
83 
 
$
118 

Royalty income from Samsung Corning Precision Materials decreased in 2013, when compared to 2012, reflecting the decline in sales volume at Samsung Corning Precision Materials.  In 2012, royalty income was significantly lower when compared to 2011, due to the reduction of the applicable royalty rate by approximately 50% beginning in December 2011.

Included in the line item Foreign currency transaction and hedge gains (losses), net, for the year ended December 31, 2013, is the impact of the purchased collars and average rate forward contracts, which hedge our exposure to movements in the Japanese yen and its impact on our net earnings.  We recorded a net gain relating to the changes in the fair value of these contracts, offset slightly by the premium expense, in the amount of $435 million in the year ended December 31, 2013.

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