ADT 2009 Annual Report Download - page 222

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TYCO INTERNATIONAL LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
14. Financial Instruments (Continued)
The Company does not use derivative financial instruments for trading or speculative purposes.
All derivative financial instruments are reported on the Consolidated Balance Sheets at fair value
with changes in the fair value of the derivative financial instruments recognized currently in earnings.
The following table summarizes the fair value of derivative instruments and their location in the
Consolidated Balance Sheets as of September 25, 2009 ($ in millions).
Fair Values of Derivative Instruments
Consolidated Consolidated
Balance Sheet Fair Value Balance Sheet Fair Value
Derivatives not designated as hedging instruments: Location DR/(CR) Location DR/(CR)
Derivative foreign exchange contracts in an
asset position(1) ...................... Other Current $31 Other Current $ 1
Assets Liabilities
Derivative foreign exchange contracts in a
liability position(1) .................... Other Current (1) Other Current (6)
Assets Liabilities
Net Asset (Liability) .................... 30 (5)
Derivatives designated as hedging instruments:
Derivative interest rate swap contracts ....... Other Assets 3 (—)
Total Asset (Liability) ................... $33 $ (5)
(1) The Company nets derivative assets and liabilities when aggregating derivative contracts for presentation in the
Consolidated Financial Statements if certain criteria are met. The table above presents such contracts on a gross basis.
The following tables summarize the amount of gain (loss) recognized in earnings on derivative
instruments and their location in the Consolidated Statements of Operations for the year ended
September 25, 2009 ($ in millions).
The Effect of Derivative Instruments on the Consolidated Statements of Operations
Amount of Gain
(Loss) Recognized in
Location of Gain Earnings on Derivatives
(Loss) Recognized in For the Year
Derivatives not designated as hedging instruments: Earnings on Derivatives Ended September 25, 2009
Foreign Exchange Contracts(1) ............. Selling, general and $(14)
administrative expenses
Foreign Exchange Contracts(2) ............. Other expense, net 44
(1) Includes economic hedges related to operating activities.
(2) Includes economic hedges related to dividends declared in Swiss francs.
130 2009 Financials