Fair Value Measurements and Derivatives

6 Months Ended

Jun. 30, 2011

Fair Value Measurements and Derivatives

Note 12.  Fair Value Measurements and Derivatives

In measuring the fair value of our assets and liabilities, we use market data or assumptions that we believe market participants would use in pricing an asset or liability including assumptions about risk when appropriate.  Our valuation techniques include a combination of observable and unobservable inputs.

Fair value measurements on a recurring basis — Assets and liabilities that are carried in our balance sheet at fair value are as follows:

			Fair Value Measurements Using
			Quoted
			Prices in		Significant		Significant
			Active		Inputs		Inputs
			Markets		Observable		Unobservable
June 30, 2011	Total		(Level 1)		(Level 2)		(Level 3)
Notes receivable - noncurrent asset	$	109	$	-	$	-	$	109
Marketable securities - current asset		58		21		37
Currency forward contracts - current asset		1				1
Currency forward contracts - current liability		2				2
December 31, 2010
Notes receivable - noncurrent asset	$	103	$	-	$	-	$	103
Marketable securities - current asset		54		16		38
Currency forward contracts - current asset		1				1
Currency forward contracts - current liability		5				5

Foreign currency derivatives — The total notional amounts of outstanding foreign currency derivatives as of June 30, 2011 and December 31, 2010 were $80 and $108 comprised of currency forward contracts involving the exchange of U.S. dollars, euros, British pounds, Canadian dollars, Swiss francs, Swedish krona, Japanese yen, Hungarian forints, South African rand and Indian rupees as well as a cross-currency swap involving the exchange of Australian dollars and South African rand.  At June 30, 2011, currency forward contracts with notional amounts of $48 were designated as cash flow hedges.

Amounts to be reclassified to earnings — Deferred gains at June 30, 2011 and losses at December 31, 2010 reported in AOCI include de minimis amounts expected to be reclassified to earnings during the next twelve months.  Amounts expected to be reclassified to earnings assume no change in the current hedge relationships or to June 30, 2011 market rates.  A de minimis amount was reclassified from AOCI to earnings in the first half of 2011.

Changes in Level 3 recurring fair value measurements —

	Three Months Ended				Six Months Ended
	June 30,				June 30,
Notes receivable	2011		2010		2011		2010
Beginning of period	$	106	$	94	$	103	$	94
Accretion of value (interest income)		3		3		6		5
Note sold in Structures sale								(2	)
End of period	$	109	$	97	$	109	$	97

Substantially all of the notes receivable balance consists of one note, due 2019, obtained in connection with a divestiture in 2004.  Its fair value is adjusted each quarter to the lower of its callable value or its market value, which is based on the publicly traded debt of the operating subsidiary of the obligor.  The fair value of the note at June 30, 2011 and December 31, 2010 approximated the callable value and we believe that the note will be paid in full at the end of the term or sooner.

Fair value measurements on a nonrecurring basis — In addition to items that are measured at fair value on a recurring basis, we also have long-lived assets that may be measured at fair value on a nonrecurring basis.  These assets include intangible assets and property, plant and equipment which may be written down to fair value as a result of impairment.