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Hedging Activities | 9 Months Ended
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Sep. 30, 2018
Hedging Activities [Abstract] |
Hedging Activities | 12. Hedging Activities ﻿ Undesignated Hedges The table below includes a total gross notional value for translated earnings contracts of $14.7 billion and $14.3 billion at September 30, 2018 and December 31, 2017, respectively. These include gross notional value for average rate forwards of $12.1 billion and $13.0 billion, zero-cost collars and purchased put or call options of $2.6 billion and $1.3 billion at September 30, 2018 and December 31, 2017, respectively. The majority of the average rate forward contracts hedge a significant portion of the Company’s exposure to the Japanese yen with maturities spanning the years 201 8-2022 and with gross notional values of $9.7 billion and $11.7 billion at September 30, 2018 and December 31, 2017, respectively. The average rate forward contracts also partially hedge the impacts of the South Korean won, Chinese yuan, euro and British pound translation on the Company’s projected net income. 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, only the put or the call option can be exercised at maturity. ﻿ The following tables summarize the notional amounts and respective fair values of Corning’s derivative financial instruments on a gross basis for September 30, 2018 and December 31, 2017 (in millions): ﻿ ﻿
﻿ |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
﻿ |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
﻿ |  |  | Asset derivatives |  | Liability derivatives
﻿ | Gross notional amount |  | Balance |  | Fair value |  | Balance |  | Fair value
﻿ | Sept. 30, |  | Dec. 31, |  | sheet |  | Sept. 30, |  | Dec. 31, |  | sheet |  | Sept. 30, |  | Dec. 31,
﻿ | 2018 |  | 2017 |  | location |  | 2018 |  | 2017 |  | location |  | 2018 |  | 2017
﻿ |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
﻿Derivatives designated as hedging instruments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
﻿ |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
﻿Foreign exchange contracts (1) | $ | 376 |  | $ | 294 |  | Other current assets |  | $ | 12 |  | $ | 20 |  |  |  |  |  |  |  |
﻿ |  |  |  |  |  |  | Other assets |  |  | 2 |  |  | 1 |  |  |  |  |  |  |  |
﻿ |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
﻿Interest rate contracts |  | 850 |  |  | 550 |  | Other current assets |  |  | 9 |  |  |  |  | Other accrued liabilities |  | $ | (2) |  |  |
﻿ |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Other liabilities |  |  | (8) |  | $ | (8)
﻿ |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
﻿Derivatives not designated as hedging instruments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
﻿ |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
﻿Foreign exchange contracts, other |  | 1,136 |  |  | 599 |  | Other current assets |  |  | 9 |  |  | 2 |  | Other accrued liabilities |  |  | (8) |  |  | (7)
﻿ |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
﻿Translated earnings contracts |  | 14,679 |  |  | 14,275 |  | Other current assets |  |  | 159 |  |  | 176 |  | Other accrued liabilities |  |  | (40) |  |  | (34)
﻿ |  |  |  |  |  |  | Other assets |  |  | 64 |  |  | 66 |  | Other liabilities |  |  | (279) |  |  | (325)
﻿ |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
﻿Total derivatives | $ | 17,041 |  | $ | 15,718 |  |  |  | $ | 255 |  | $ | 265 |  |  |  | $ | (337) |  | $ | (374)
﻿
| (1) |  | Cash flow hedges with a typical duration of 24 months or less.
The following table summarizes the effect of derivative financial instruments on Corning’s consolidated financial statements for the three and nine months ended September 30, 2018 and 2017 (in millions): ﻿
﻿ |  |  |  |  |  |  |  |  |  |  |  |  |  |
﻿ |  |  |  |  |  |  |  |  |  |  |  |  |  |
﻿ |  | Effect of derivative instruments on the consolidated financial statements
﻿ |  | for the three months ended September 30,
﻿ |  | Gain recognized in other |  | Location of gain/(loss) |  | Gain/(loss) reclassified from
﻿ |  | comprehensive income |  | reclassified from |  | accumulated OCI into
﻿Derivatives in hedging |  | (OCI) |  | accumulated OCI into |  | income (effective) (1)
﻿relationships |  | 2018 |  | 2017 |  | income (effective) |  | 2018 |  | 2017
﻿ |  |  |  |  |  |  |  |  |  |  |  |  |  |
﻿Interest rate contracts |  | $ | 12 |  |  |  |  |  |  |  |  |  |  |
﻿Foreign exchange contracts |  |  | 19 |  | $ | 3 |  | Cost of sales |  | $ | 4 |  | $ | (1)
﻿ |  |  |  |  |  |  |  |  |  |  |  |  |  |
﻿Total cash flow hedges |  | $ | 31 |  | $ | 3 |  |  |  | $ | 4 |  | $ | (1)
﻿ ﻿ ﻿
﻿ |  |  |  |  |  |  |  |  |  |  |  |  |  |
﻿ |  |  |  |  |  |  |  |  |  |  |  |  |  |
﻿ |  | Effect of derivative instruments on the consolidated financial statements
﻿ |  | for the nine months ended September 30,
﻿ |  | Gain recognized in |  | Location of gain/(loss) |  | Gain/(loss) reclassified from
﻿ |  | other comprehensive income |  | reclassified from |  | accumulated OCI into
﻿Derivatives in hedging |  | (OCI) |  | accumulated OCI into |  | income ineffective/effective (1)
﻿relationships |  | 2018 |  | 2017 |  | income (effective) |  | 2018 |  | 2017
﻿ |  |  |  |  |  |  |  |  |  |  |  |  |  |
﻿ |  |  |  |  |  |  |  | Sales |  |  |  |  | $ | 1
﻿Interest rate contracts |  | $ | 9 |  |  |  |  | Cost of sales |  | $ | 10 |  |  | (11)
﻿Foreign exchange contracts |  |  | 2 |  | $ | 36 |  | Other expense, net |  |  | (1) |  |  | (1)
﻿ |  |  |  |  |  |  |  |  |  |  |  |  |  |
﻿Total cash flow hedges |  | $ | 11 |  | $ | 36 |  |  |  | $ | 9 |  | $ | (11)
﻿
| (1) |  | The amount of hedge ineffectiveness at September 30, 2018 and 2017 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 |  | Nine months ended
﻿ | Location of gain/(loss) |  | September 30, |  | September 30,
﻿Undesignated derivatives | recognized in income |  | 2018 |  | 2017 |  | 2018 |  | 2017
﻿ |  |  |  |  |  |  |  |  |  |  |  |  |
﻿Foreign exchange contracts – balance sheet and loans | Other income (expense), net |  | $ | 10 |  | $ | (7) |  | $ | 19 |  | $ | (19)
﻿Foreign currency hedges related to translated earnings | Translated earnings contract gain (loss), net |  |  | 230 |  |  | 26 |  |  | 66 |  |  | (193)
﻿ |  |  |  |  |  |  |  |  |  |  |  |  |
﻿Total undesignated |  |  | $ | 240 |  | $ | 19 |  | $ | 85 |  | $ | (212)

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- References No definition available. + Details
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- Definition The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -URI http://asc.fasb.org/topic&trid=2229140 + Details
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