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Quarterly report pursuant to Section 13 or 15(d)

FAIR VALUE

v3.19.2
FAIR VALUE
 6 Months Ended
Jun. 30, 2019
FAIR VALUE

10. FAIR VALUE

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The fair values of financial instruments were as follows (dollars in millions):

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Carrying

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Carrying

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Value

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Non-qualified employee benefit plan investments

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$

23

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$

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Forward swap contract related to the sale of investment in Venator

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14

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Interest rate contracts

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(1)

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(1)

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Long-term debt (including current portion)

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(2,505)

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(2,664)

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(2,320)

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(2,403)

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The carrying amounts reported in our condensed consolidated balance sheets of cash and cash equivalents, accounts receivable and accounts payable approximate fair value because of the immediate or short-term maturity of these financial instruments. We elected the fair value option to account for our equity method investment in Venator post deconsolidation. The fair value of our remaining investment in Venator reported in investment in unconsolidated affiliates is obtained through market observable pricing using prevailing market prices. See “Note 4. Business Dispositions.� The fair values of non-qualified employee benefit plan investments are obtained through market observable pricing using prevailing market prices. The estimated fair values of our long-term debt are based on quoted market prices for the identical liability when traded as an asset in an active market (Level 1).

The fair value estimates presented herein are based on pertinent information available to management as of June 30, 2019 and December 31, 2018. Although management is not aware of any factors that would significantly affect the estimated fair value amounts, such amounts have not been comprehensively revalued for purposes of these financial statements since June 30, 2019, and current estimates of fair value may differ significantly from the amounts presented herein.

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The following assets and liabilities are measured at fair value on a recurring basis (dollars in millions):

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in active markets

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observable

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Description

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2019

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(³¢±ð±¹±ð±ôÌý3)

Assets:

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Equity securities:

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Non-qualified employee benefit plan investments

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Liabilities:

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Derivatives:

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for identical

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Description

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2018

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Assets:

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Equity securities:

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Non-qualified employee benefit plan investments

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Derivatives:

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Forward swap contract related to the sale of investment in Venator(1)

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$

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(1) In connection with the December 3, 2018 sale of Venator ordinary shares to Bank of America N.A., we recorded a forward swap. In February 2019, we settled this forward swap and received $16 million from the counterparty.

During the six months ended June 30, 2019, there were no instruments measured at fair value on a recurring basis using significant unobservable inputs (Level 3), and there were no gains or losses (realized and unrealized) included in earnings for instruments categorized as Level 3 within the fair value hierarchy.