Note 13 - Hedging Activities

3 Months Ended

Mar. 31, 2016

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 foreign currency hedges related to translated earnings of $20.8 billion at March 31, 2016 (at December 31, 2015: $12.0 billion), including zero-cost collars of $4.6 billion (at December 31, 2015: $5.6 billion) and average rate forwards of $16.2 billion (at December 31, 2015: $6.4 billion).  With respect to the zero-cost collars, the gross notional amount includes the value of both the put and call options.  However, due to the nature of the zero-cost collars, either the put or the call option can be exercised at maturity.  As of March 31, 2016, the total net notional value of the zero-cost collars was $2.4 billion (at December 31, 2015: $2.9 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, 2016 and December 31, 2015 (in millions):

	U.S. Dollar		Asset derivatives			Liability derivatives
	Gross notional amount		Balance sheet location	Fair value		Balance sheet location	Fair value
	March 31, 2016	December 31, 2015		March 31, 2016	December 31, 2015		March 31, 2016	December 31, 2015
Derivatives designated as hedging instruments
Foreign exchange contracts	$    684	$    782	Other current assets		$     5	Other accrued liabilities	$  (26)	$  (10)
			Other assets		1	Other liabilities	(25)	(23)
Interest rate contracts	550	550	Other assets	$     7		Other liabilities		(4)
Derivatives not designated as hedging instruments
Foreign exchange contracts	1,063	1,095	Other current assets	6	6	Other accrued liabilities	(34)	(12)
						Other liabilities	(1)
Translated earnings contracts	20,791	11,972	Other current assets	330	511	Other accrued liabilities	(52)	(33)
			Other assets	249	472	Other liabilities	(586)	(61)
Total derivatives	$23,088	$14,399		$592	$995		$(724)	$(143)

The following tables summarize the effect of designated derivative financial instruments on Corning’s consolidated financial statements for the three months ended March 31, 2016 and 2015 (in millions):

	Effect of designated 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/(loss) reclassified fromaccumulated OCI into income (effective) (1)
	2016		2015			2016		2015
Interest rate hedges			$	(13)	Sales	$	1	$	5
					Cost of sales		(5)		2
Foreign exchange contracts	$	(24)		27
Total cash flow hedges	$	(24)	$	14		$	(4)	$	7

(1) The amount of hedge ineffectiveness at March 31, 2016 and 2015 was insignificant.

The following table summarizes the effect on the consolidated financial statements relating to Corning’s derivative financial instruments (in millions):

		Gain (loss) recognized in income
		Three months ended March 31,
Undesignated derivatives	Location	2016		2015
Foreign exchange contracts – balance sheet	Foreign currency hedge (loss) gain, net	$	(15)	$	11
Foreign exchange contracts – loans	Foreign currency hedge (loss) gain, net		(22)		2
Foreign currency hedges related to translated earnings	Foreign currency hedge (loss) gain, net		(857)		29
Total undesignated		$	(894)	$	42