CORNING INC /NY | 2013 | FY | 3

17.      Shareholders’ Equity

The following table presents changes in capital stock for the period from January 1, 2011 to December 31, 2013 (in millions):

 
Common stock
 
Treasury stock
 
Shares
 
Par value
 
Shares
 
Cost
                   
Balance at December 31, 2010
1,626
 
$
813
 
(65)
 
$
(1,227)
                   
Shares issued to benefit plans and for option exercises
10
   
5
       
(7)
Shares purchased for treasury
         
(55)
   
(779)
Other, net
         
(1)
   
(11)
Balance at December 31, 2011
1,636
 
$
818
 
(121)
 
$
(2,024)
                   
Shares issued to benefit plans and for option exercises
13
   
7
       
(1)
Shares purchased for treasury
         
(56)
   
(719)
Other, net
         
(2)
   
(29)
Balance at December 31, 2012
1,649
 
$
825
 
(179)
 
$
(2,773)
                   
Shares issued to benefit plans and for option exercises
12
   
6
       
(1)
Shares purchased for treasury
         
(82)
   
(1,316)
Other, net
         
(1)
   
(9)
Balance at December 31, 2013
1,661
 
$
831
 
(262)
 
$
(4,099)

On October 31, 2013, as part of the previously authorized share repurchase program announced on April 24, 2013, Corning entered into an accelerated share repurchase (“ASR”) agreement with JP Morgan Chase Bank, National Association, London Branch (“JPMC”).  Under the ASR, Corning agreed to purchase $1 billion of its common stock, in total, with an initial delivery by JPMC of 47.1 million shares based on the current market price, and payment of $1 billion made by Corning to JPMC.  The payment to JPMC was recorded as a reduction to shareholders’ equity, consisting of an $800 million increase in treasury stock, which reflects the value of the initial 47.1 million shares received upon execution, and a $200 million decrease in other-paid-in capital, which reflects the value of the stock held back by JPMC pending final settlement.  On January 28, 2014, the ASR was completed.  Corning received an additional 10.5 million shares on January 31, 2014 to settle the ASR.  In total, Corning purchased 57.6 million shares based on the average daily volume weighted-average price of Corning’s common stock during the term of the ASR, less a discount.

In addition to the ASR, during 2013, we repurchased 35 million shares of common stock on the open market for approximately $500 million as part of the share repurchase program announced on April 24, 2013.  During 2012 and 2011, we repurchased 56 million and 55 million shares of common stock on the open market for $719 million and $779 million, respectively, as part of the share repurchase program announced on October 5, 2011.

Accumulated Other Comprehensive Income

A summary of changes in the components of accumulated other comprehensive income (loss), including our proportionate share of equity method investee’s accumulated other comprehensive income (loss), is as follows (in millions) (1):

 
Foreign
currency
translation
adjustment
and other
 
Unamortized
actuarial
losses and
prior service
costs
 
Net
unrealized
gains
(losses) on
investments
 
Net
unrealized
gains
(losses) on
designated
hedges
 
Accumulated
other
comprehensive
income (loss)
                             
Balance at December 31, 2010
$
1,374 
 
$
(698)
 
$
(33)
 
$
(23)
 
$
620 
Other comprehensive income before reclassifications (2)
 
144 
   
(53)
   
(2)
   
(38)
   
51 
Amounts reclassified from accumulated other comprehensive income (3)
 
3 
   
54 
         
34 
   
91 
Equity method affiliates (4)
 
(168)
   
(122)
   
6 
   
(2)
   
(286)
Net current-period other comprehensive income (loss)
 
(21)
   
(121)
   
4 
   
(6)
   
(144)
Balance at December 31, 2011
$
1,353 
 
$
(819)
 
$
(29)
 
$
(29)
 
$
476 
                             
Other comprehensive income before reclassifications (5)
$
(439)
 
$
(181)
 
$
11 
 
$
63 
 
$
(546)
Amounts reclassified from accumulated other comprehensive income (3)
 
(52)
   
149 
   
(6)
   
(18)
   
73 
Equity method affiliates (4)
 
312 
   
31 
   
8 
   
2 
   
353 
Net current-period other comprehensive income (loss)
 
(179)
   
(1)
   
13 
   
47 
   
(120)
Balance at December 31, 2012
$
1,174 
 
$
(820)
 
$
(16)
 
$
18 
 
$
356 
                             
Other comprehensive income before reclassifications (6)
$
(756)
 
$
283 
 
$
1 
 
$
56 
 
$
(416)
Amounts reclassified from accumulated other comprehensive income (3)
       
(10)
   
(1)
   
(81)
   
(92)
Equity method affiliates (4)
 
74 
   
119 
   
2 
   
1 
   
196 
Net current-period other comprehensive income (loss)
 
(682)
   
392 
   
2 
   
(24)
   
(312)
Balance at December 31, 2013
$
492 
 
$
(428)
 
$
(14)
 
$
(6)
 
$
44 

(1)
All amounts are after tax.  Amounts in parentheses indicate debits to accumulated other comprehensive income.

(2)
Amounts are net of total tax benefit of $49 million, including $23 million related to the hedges component and $26 million related to the retirement plans component.

(3)
Tax effects of reclassifications are disclosed separately in this Note 17.

(4)
Tax effects related to equity method affiliates are not significant.

(5)
Amounts are net of total tax benefit of $56 million, including $(37) million related to the hedges component, $99 million related to the retirement plans component and $(6) million related to the investments component.

(6)
Amounts are net of total tax expense of $(197) million, including $(33) million related to the hedges component and $(164) million related to the retirement plans component.

(In millions)

Reclassifications Out of Accumulated Other Comprehensive Income (AOCI) by Component (1)
Details about AOCI Components
Amount reclassified from AOCI 
 
Affected line item
in the consolidated
statements of income
Years ended December 31,
 
2013
 
2012
 
2011
 
                     
Foreign currency translation adjustment
     
$
52 
 
$
(3)
 
Other income, net
         
52 
   
(3)
 
Net of tax
                     
Amortization of net actuarial loss
$
15 
 
$
(233)
 
$
(82)
 
(2)
Amortization of prior service cost
 
1 
   
(2)
   
(3)
 
(2)
   
16 
   
(235)
   
(85)
 
Total before tax
   
(6)
   
86 
   
31 
 
Tax benefit
 
$
10 
 
$
(149)
 
$
(54)
 
Net of tax
                     
Realized gains on investments
$
1 
 
$
10 
       
Other income, net
         
(4)
       
Tax expense
 
$
1 
 
$
6 
       
Net of tax
                     
Realized gains on designated hedges
     
$
1 
       
Sales
 
$
38 
   
16 
 
$
(12)
 
Cost of sales
   
91 
   
11 
   
(42)
 
Other income, net
   
129 
   
28 
   
(54)
 
Total before tax
   
(48)
   
(10)
   
20 
 
Tax (expense) benefit
 
$
81 
 
$
18 
 
$
(34)
 
Net of tax
                     
Total reclassifications for the period
$
92 
 
$
(73)
 
$
(91)
 
Net of tax

(1)
Amounts in parentheses indicate debits to the statement of income.

(2)
These accumulated other comprehensive income components are included in net periodic pension cost.  See Note 13 – Employee Retirement Plans for additional details.

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