Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2018

Derivative Financial Instruments Designated and Non-designated as Hedging Instruments

The fair values in the Condensed Consolidated Balance Sheets have been presented on a gross basis. Derivative financial instruments designated and non-designated as hedging instruments are included in the Company’s Condensed Consolidated Balance Sheets as of June 30, 2018 and December 31, 2017, as follows:

	June 30, 2018
			Fair Value Measurements
	Nominal Value		Derivative Asset (Other current/non current assets)		Derivative Liability (Other current/non current liabilities)
Derivatives not designated as hedging instruments
Foreign exchange swaps, less than 6 months	$	105	$	-	$	-
Total derivatives not designated as hedging instruments	$	105	$	-	$	-

	December 31, 2017
			Fair Value Measurements
	Nominal Value		Derivative Asset (Other current/non current assets)		Derivative Liability (Other current/non current liabilities)
Derivatives designated as hedging instruments
Foreign exchange forward contracts, less than 1 year (cash flow hedge)	$	67	$	-	$	1
Total derivatives designated as hedging instruments	$	67	$	-	$	1

Gains and Losses on Derivative Financial Instruments

Gains and losses on derivative financial instruments for the three and six months ended June 30, 2018 and 2017 are as follows:

	Three months ended
	June 30, 2018						June 30, 2017
	Foreign exchange forward contracts			Foreign exchange swaps			Foreign exchange forward contracts			Foreign exchange swaps
Foreign currency risk - Cost of sales:
Recorded into gain (loss)	$	-		$	(2	)	$	-		$	2
Recorded gains (loss) into AOCI net of tax		-			-			(2	)		-
Less: reclassified from AOCI into gain (loss)		(1	)		-			2			-
	$	1		$	(2	)	$	(4	)	$	2

	Six months ended
	June 30, 2018					June 30, 2017
	Foreign exchange forward contracts			Foreign exchange swaps		Foreign exchange forward contracts			Foreign exchange swaps
Foreign currency risk - Cost of sales:
Recorded gains (loss) into AOCI net of tax	$	-		$	-	$	(3	)	$	-
Less: Reclassified from AOCI gain (loss)		(1	)		-		3			-
	$	1		$	-	$	(6	)	$	-

Long-lived Assets Measured at Fair Value on Non-recurring Basis

The tables below present information about certain of the Company’s long-lived assets measured at fair value on a nonrecurring basis as of June 30, 2018 and December 31, 2017.

	June 30, 2018				December 31, 2017
	Fair value measurements		Impairment		Fair value measurements		Impairment
(Dollars in millions)	Level 3		Losses		Level 3		Losses
Goodwill ¹⁾	$	291	$	-	$	292	$	(234	)
Intangible assets, net ²⁾		109		-		122		(12	)

In the fourth quarter of 2017, the Company recognized an impairment charge of the full goodwill related to ANBS, resulting in an impairment loss of $234 million, which was included in earnings for the period. The primary driver of the goodwill impairment was due to the lower expected long-term operating cash flow performance of the business unit as of the measurement date. The remaining goodwill balance as of June 30, 2018 and December 31, 2017 was not measured at fair value on a nonrecurring basis as impairment indicators did not exist.

In the first quarter of 2017, the Company recognized an impairment charge to amortization of intangibles of $12 million related to a contract with an OEM customer of M/A-COM products, which was included in earnings for the period. As of December 31, 2017, the intangible value related to this customer contract was fully amortized. The remaining intangibles balance as of June 30, 2018 and December 31, 2017 was not measured at fair value on a nonrecurring basis as impairment indicators did not exist.