Analysis of Debt
Total Debt (Carrying Amount)
Corning Inc., balance sheet: debt
US$ in millions
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
Total debt obligations experienced a period of fluctuation between 2019 and 2023, characterized by an initial increase, a two-year period of deleveraging, and a subsequent rise in the final reporting year.
- Total Debt Trajectory
- The total carrying amount of debt rose from 7,740 million US$ in 2019 to a peak of 7,972 million US$ in 2020. A consistent reduction followed over the next two years, with the total reaching a low of 6,911 million US$ in 2022. By December 31, 2023, this downward trend reversed, and total debt increased to 7,526 million US$.
- Long-term Debt Analysis
- Long-term debt, excluding the current portion, serves as the primary component of the company's total borrowings. This figure peaked in 2020 at 7,816 million US$ before declining to 6,687 million US$ in 2022. The subsequent increase to 7,206 million US$ in 2023 indicates a renewed reliance on long-term financing.
- Current Obligations and Liquidity Pressure
- A significant upward trend is observable in the current portion of long-term debt and short-term borrowings. These obligations grew from a nominal 11 million US$ in 2019 to 320 million US$ in 2023. This steady increase, particularly from 2022 to 2023, suggests a growing volume of debt maturing in the short term, which increases immediate liquidity requirements.
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Total Debt (Fair Value)
| Dec 31, 2023 | |
|---|---|
| Selected Financial Data (US$ in millions) | |
| Current portion of long-term debt and short-term borrowings | 320) |
| Long-term debt, excluding current portion | 7,000) |
| Total long-term debt and short-term borrowings (fair value) | 7,320) |
| Financial Ratio | |
| Debt, fair value to carrying amount ratio | 0.97 |
Based on: 10-K (reporting date: 2023-12-31).
Weighted-average Interest Rate on Debt
Weighted-average interest rate on long-term debt: 4.30%
| Interest rate | Debt amount1 | Interest rate × Debt amount | Weighted-average interest rate2 |
|---|---|---|---|
| 0.70% | 149) | 1) | |
| 6.85% | 157) | 11) | |
| 7.25% | 249) | 18) | |
| 4.70% | 296) | 14) | |
| 5.75% | 396) | 23) | |
| 4.75% | 497) | 24) | |
| 5.35% | 545) | 29) | |
| 3.90% | 395) | 15) | |
| 4.38% | 743) | 33) | |
| 5.85% | 297) | 17) | |
| 5.45% | 1,086) | 59) | |
| 0.72% | 71) | 1) | |
| 0.99% | 263) | 3) | |
| 1.04% | 181) | 2) | |
| 1.22% | 177) | 2) | |
| 1.15% | 221) | 3) | |
| 1.58% | 71) | 1) | |
| 1.51% | 41) | 1) | |
| 3.88% | 330) | 13) | |
| 4.13% | 602) | 25) | |
| 4.60% | 195) | 9) | |
| 3.85% | 564) | 22) | |
| Total | 7,526) | 324) | |
| 4.30% | |||
Based on: 10-K (reporting date: 2023-12-31).
1 US$ in millions
2 Weighted-average interest rate = 100 × 324 ÷ 7,526 = 4.30%
Interest Costs Incurred
Corning Inc., interest costs incurred
US$ in millions
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
Total interest costs have exhibited a consistent upward trajectory over the five-year period from 2019 to 2023. The aggregate cost increased from 275 million US dollars to 369 million US dollars, reflecting a sustained rise in the cost of servicing debt and financing capital projects.
- Aggregate Interest Costs
- A steady growth pattern is observed in total interest costs, which rose from 275 million US dollars in 2019 to 369 million US dollars by 2023. The most significant year-over-year increase occurred between 2019 and 2020, where costs jumped by 59 million US dollars, followed by a period of relative stability between 2020 and 2022 before resuming an upward trend in 2023.
- Interest Expense Trends
- Interest expense serves as the primary driver of the overall cost increase. This metric grew from 221 million US dollars in 2019 to 329 million US dollars in 2023. While there was a slight contraction in 2022, where expense dropped to 292 million US dollars, the subsequent rise to 329 million US dollars in 2023 represents the highest expense level in the analyzed period.
- Interest Capitalization Patterns
- Interest capitalized has displayed a fluctuating pattern without a clear linear trend, ranging from a high of 58 million US dollars in 2020 to a low of 36 million US dollars in 2021. The volatility in capitalized interest suggests varying levels of investment in long-term assets and infrastructure projects across the five-year window, ending at 40 million US dollars in 2023.
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Adjusted Interest Coverage Ratio
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
2023 Calculations
1 Interest coverage ratio (without capitalized interest) = EBIT ÷ Interest expense
= 1,145 ÷ 329 = 3.48
2 Adjusted interest coverage ratio (with capitalized interest) = EBIT ÷ Interest costs
= 1,145 ÷ 369 = 3.10
The solvency metrics exhibit significant volatility over the five-year period from 2019 to 2023, characterized by a sharp decline in 2020, a strong recovery in 2021, and a subsequent downward trend leading into 2023.
- Interest Coverage Ratio (without capitalized interest)
- This metric fluctuated from 6.59 in 2019 to a low of 3.30 in 2020. A substantial peak was reached in 2021 at 9.09, followed by a steady decrease to 7.15 in 2022 and a sharp contraction to 3.48 by the end of 2023. This trajectory indicates periodic instability in the earnings available to meet interest obligations.
- Adjusted Interest Coverage Ratio (with capitalized interest)
- The adjusted ratio consistently remains lower than the non-capitalized ratio, reflecting the impact of capitalized interest on the coverage margin. The ratio declined from 5.29 in 2019 to 2.72 in 2020, before surging to a high of 8.11 in 2021. A subsequent downward trend is observed, with the ratio falling to 6.14 in 2022 and concluding at 3.10 in 2023. The return to lower levels in 2023 suggests a diminished capacity to service debt relative to the peak observed in 2021.
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