Fair Value Measurement

3 Months Ended

Mar. 31, 2014

Fair Value Disclosures [Abstract]

Fair Value Measurement

Fair Value Measurement

The Company follows a fair value measurement hierarchy to measure its assets and liabilities. The Company's financial assets and liabilities are measured using inputs from the following three levels.

Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets and liabilities that the Company has the ability to access at the measurement date. Level 1 inputs are considered to be the most reliable evidence of fair value as they are based on unadjusted quoted market prices from various financial information service providers and securities exchanges.

Level 2 inputs are directly or indirectly observable prices that are not quoted on active exchanges, which include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability and inputs that are derived principally from or corroborated by observable market data by correlation or other means. The fair values of these derivative instruments reflect the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including forward curves.

Level 3 inputs are unobservable inputs employed for measuring the fair value of assets or liabilities. The Company does not have any recurring financial assets or liabilities that are recorded in its consolidated balance sheets as of March 31, 2014 and December 31, 2013 that are classified as Level 3 inputs.

Included in PPG’s financial instrument portfolio are cash and cash equivalents, short-term investments, cash held in escrow, marketable equity securities, company-owned life insurance and short and long-term debt instruments. The fair values of these financial instruments approximated their carrying values at March 31, 2014 and December 31, 2013, in the aggregate, except for long-term debt.

Long-term debt (excluding capital lease obligations) had carrying and fair values totaling $3,344 million and $3,726 million, respectively, as of March 31, 2014. Long-term debt (excluding capital lease obligations) had carrying and fair values totaling $3,346 million and $3,683 million, respectively, as of December 31, 2013. The fair values of the debt instruments were based on discounted cash flows and interest rates then currently available to the Company for instruments of the same remaining maturities and were measured using level 2 inputs.

Assets and liabilities reported at fair value on a recurring basis:

	March 31, 2014
($ in Millions)	Level 1		Level 2		Level 3
Assets:
Short-term investments:
Marketable equity securities	$	5	$	—	$	—
Other current assets:
Foreign currency forward contracts	—		3		—
Equity forward arrangement	—		214		—
Investments:
Marketable equity securities	73		—		—
Liabilities:
Accounts payable and accrued liabilities:
Foreign currency forward contracts	—		9		—
Other liabilities:
Cross currency swaps	—		101		—
Foreign currency forward contracts			10
	December 31, 2013
($ in Millions)	Level 1		Level 2		Level 3
Assets:
Short-term investments:
Commercial paper and certificates of deposit	$	—	$	50	$	—
Other current assets:
Marketable equity securities	5		—		—
Foreign currency forward contracts	—		25		—
Equity forward arrangement	—		207		—
Investments:
Marketable equity securities	70		—		—
Other assets:
Foreign currency forward contracts	—		2		—
Liabilities:
Accounts payable and accrued liabilities:
Foreign currency forward contracts	—		7		—
Other liabilities:
Cross currency swaps	—		120		—
Foreign currency forward contracts	—		11		—

Assets and liabilities reported at fair value on a nonrecurring basis:

There were no significant adjustments to the fair value of nonmonetary assets or liabilities during the three months ended March 31, 2014, or for the year ended December 31, 2013.