Fair Value Measurements

9 Months Ended

Sep. 30, 2018

Fair Value Measurements [Abstract]

Fair Value Measurements

13.  Fair Value Measurements

Fair value standards under U.S. GAAP define fair value, establish a framework for measuring fair value in applying generally accepted accounting principles, and require disclosures about fair value measurements.  The standards also identify two kinds of inputs that are used to determine the fair value of assets and liabilities: observable and unobservable.  Observable inputs are based on market data or independent sources while unobservable inputs are based on the Company’s own market assumptions.  Once inputs have been characterized, the inputs are prioritized into one of three broad levels (provided in the table below) used to measure fair value.  Fair value standards apply whenever an entity is measuring fair value under other accounting pronouncements that require or permit fair value measurement and require the use of observable market data when available. 

The following tables provide fair value measurement information for the Company’s major categories of financial assets and liabilities measured on a recurring basis (in millions):

			Fair value measurements at reporting date using
			Quoted prices in	Significant other		Significant
			active markets for	observable		unobservable
	September 30,		identical assets	inputs		inputs
	2018		(Level 1)	(Level 2)		(Level 3)
Current assets:
Other current assets (1)	$	189		$	189
Non-current assets:
Investments (2)	$	32				$	32
Other assets (1)	$	66		$	66
Current liabilities:
Other accrued liabilities (1)	$	50		$	50
Non-current liabilities:
Other liabilities (1)(3)	$	307		$	287	$	20

(1) Derivative assets and liabilities include foreign exchange contracts which are measured using observable inputs for similar assets and liabilities.

(2) One of the Company’s equity securities was measured using unobservable (Level 3) inputs, in the amount of $32 million.

(3) Other liabilities include contingent consideration that was measured using unobservable (Level 3) inputs, in the amount of $20 million.

			Fair value measurements at reporting date using
			Quoted prices in	Significant other		Significant
			active markets for	observable		unobservable
	December 31,		identical assets	inputs		inputs
	2017		(Level 1)	(Level 2)		(Level 3)
Current assets:
Other current assets (1)(2)	$	497		$	197	$	300
Non-current assets:
Other assets (1)	$	68		$	68
Current liabilities:
Other accrued liabilities (1)(2)	$	44		$	42	$	2
Non-current liabilities:
Other liabilities (1)(2)	$	353		$	333	$	20

(1) Derivative assets and liabilities include foreign exchange contracts which are measured using observable inputs for similar assets and liabilities.

(2) At December 31, 2017, other current assets, other accrued liabilities and other liabilities include contingent consideration that was measured using unobservable (Level 3) inputs, in the amounts of $300 million, $2 million and $20 million, respectively.

As a result of the acquisition of Samsung Corning Precision Materials in January 2014, the Company had contingent consideration that was measured using unobservable (Level 3) inputs in an option pricing model.  The fair value of the contingent consideration was calculated to be $300 million as of December 31, 2017.  This amount was settled in cash and received in June 2018.

There were no significant financial assets and liabilities measured on a nonrecurring basis as of September 30, 2018 and December 31, 2017.