Huntsman Corporation Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

FAIR VALUE (Tables)

FAIR VALUE (Tables)

3 Months Ended

Mar. 31, 2015

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

	March 31, 2015						December 31, 2014
	Carrying Value			Estimated Fair Value			Carrying Value			Estimated Fair Value
Non-qualified employee benefit plan investments	$	25		$	25		$	22		$	22
Cross-currency interest rate contracts		33			33			48			48
Interest rate contracts		(7	)		(7	)		(7	)		(7	)
Long-term debt (including current portion)		(5,358	)		(5,412	)		(5,200	)		(5,210	)

Assets and liabilities are measured at fair value on a recurring basis

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


				Fair Value Amounts Using
Description	March 31, 2015			Quoted prices in active markets for identical assets (Level 1)(3)		Significant other observable inputs (Level 2)(3)			Significant unobservable inputs (Level 3)
Assets:
Available-for sale equity securities:
Equity mutual funds	$	25		$	25	$	—		$	—
Derivatives:
Cross-currency interest rate contracts(1)		33			—		—			33

Total assets	$	58		$	25	$	—		$	33


Liabilities:
Derivatives:
Interest rate contracts(2)	$	(7	)	$	—	$	(7	)	$	—


				Fair Value Amounts Using
Description	December 31, 2014			Quoted prices in active markets for identical assets (Level 1)(3)		Significant other observable inputs (Level 2)(3)			Significant unobservable inputs (Level 3)
Assets:
Available-for sale equity securities:
Equity mutual funds	$	22		$	22	$	—		$	—
Derivatives:
Cross-currency interest rate contracts(1)		48			—		43			5

Total assets	$	70		$	22	$	43		$	5


Liabilities:
Derivatives:
Interest rate contracts(2)	$	(7	)	$	—	$	(7	)	$	—


(1)	The income approach is used to calculate the fair value of these instruments. Fair value represents the present value of estimated future cash flows, calculated using relevant interest rates, exchange rates, and yield curves at stated intervals. There were no material changes to the valuation methods or assumptions used to determine the fair value during the current period. In November 2014, we entered into two five year cross-currency interest rate contracts and one eight year cross-currency interest rate contract. These instruments have been categorized by us as Level 3 within the fair value hierarchy due to unobservable inputs associated with the credit valuation adjustment, which we deemed to be significant inputs to the overall measurement of fair value at inception.
(2)	The income approach is used to calculate the fair value of these instruments. Fair value represents the present value of estimated future cash flows, calculated using relevant interest rates and yield curves at stated intervals. There were no material changes to the valuation methods or assumptions used to determine the fair value during the current period.
(3)	There were no transfers between Levels 1 and 2 within the fair value hierarchy for the three months ended March 31, 2015 and the year ended December 31, 2014.

Reconciliation of beginning and ending balances for assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3)

The following table shows a reconciliation of beginning and ending balances for the three months ended March 31, 2015 for instruments measured at fair value on a recurring basis using significant unobservable inputs (Level 3) (dollars in millions).


Fair Value Measurements Using Significant Unobservable Inputs (Level 3)	Cross-Currency Interest Rate Contracts
Beginning balance, January 1, 2015	$	5
Transfers into Level 3		—
Transfers out of Level 3		—
Total gains (losses):
Included in earnings		—
Included in other comprehensive (loss) income		28
Purchases, sales, issuances and settlements		—

Ending balance, March 31, 2015	$	33


The amount of total gains (losses) for the period included in earnings attributable to the change in unrealized gains (losses) relating to assets still held at March 31, 2015	$	—

Schedule of gains and losses (realized and unrealized) included in earnings reported in interest expense and other comprehensive (loss) income

Gains and losses (realized and unrealized) included in earnings for instruments measured at fair value on a recurring basis using significant unobservable inputs (Level 3) are reported in interest expense and other comprehensive (loss) income as follows (dollars in millions):

2015	Interest expense		Other comprehensive (loss) income
Total net gains included in earnings	$	—	$	—
Changes in unrealized gains relating to assets still held at March 31, 2015		—		28

- Definition

Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

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- Definition

Tabular disclosure of the fair value of financial instruments, including financial assets and financial liabilities, and the measurements of those instruments, assets, and liabilities.

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