Note 13 - Hedging Activities

3 Months Ended

Mar. 31, 2015

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments and Hedging Activities Disclosure [Text Block]

13.      Hedging Activities

Undesignated Hedges

The table below includes a total gross notional value for the translated earnings contracts of $14.7 billion at March 31, 2015 (at December 31, 2014: $12.1 billion), including purchased and zero-cost collars of $5.8 billion (at December 31, 2014: $2.3 billion) and average rate forwards of $8.9 billion (at December 31, 2014: $9.8 billion).  With respect to the purchased and zero-cost collars, the gross notional amount includes the value of both the put and call options.  However, due to the nature of the purchased and zero-cost collars, either the put or the call option can be exercised at maturity.  As of March 31, 2015, the total net notional value of the purchased and zero-cost collars was $3 billion (at December 31, 2014: $1.2 billion).

The following tables summarize the notional amounts and respective fair values of Corning’s derivative financial instruments on a gross basis for March 31, 2015 and December 31, 2014 (in millions):

	U.S. Dollar		Asset derivatives			Liability derivatives
	Gross notional amount		Balance sheet location	Fair value		Balance sheet location	Fair value
	March 31, 2015	December 31, 2014		March 31, 2015	December 31, 2014		March 31, 2015	December 31, 2014
Derivatives designated as hedging instruments
Foreign exchange contracts	$     742	$    487	Other current assets	$     34	$     22	Other accrued liabilities	$  (6)	$  (6)
			Other assets	8
Interest rate contracts	1,300	1,300	Other assets		1	Other liabilities	(10)	(15)
Derivatives not designated as hedging instruments
Foreign exchange contracts	564	1,285	Other current assets	14	17	Other accrued liabilities	(5)	(5)
Translated earnings contracts	14,664	12,126	Other current assets	618	649	Other accrued liabilities	(32)	(33)
			Other assets	811	846	Other liabilities	(55)
Total derivatives	$17,270	$15,198		$1,485	$1,535		$(108)	$(59)

The following tables summarize the effect of derivative financial instruments on Corning’s consolidated financial statements for the three months ended March 31, 2015 and 2014 (in millions):

	Effect of derivative instruments on the consolidated financial statements for the quarter ended March 31
Derivatives in hedging relationships	Gain/(loss) recognized in other comprehensive income (OCI)		Location of gain/(loss) reclassified from accumulated OCI into income (effective)	Gain reclassified from accumulated OCI into income (effective) (1)
	2015	2014		2015	2014
Interest rate hedges	$(13)		Sales	$5
			Cost of sales	2
Foreign exchange contracts	27	$(7)
Total cash flow hedges	$ 14	$(7)		$7

(1) The amount of hedge ineffectiveness at March 31, 2015 and 2014 was insignificant.

		Gain (loss) recognized in income
		Three months ended March 31,
Undesignated derivatives	Location	2015		2014
Foreign exchange contracts – balance sheet	Foreign currency transaction and hedge gain (loss), net	$	11	$	(12)
Foreign exchange contracts – loans	Foreign currency transaction and hedge gain (loss), net		2		4
Translated earnings contracts	Foreign currency transaction and hedge gain (loss), net		29		2
Total undesignated		$	42	$	(6)