Archer Daniels Midland 2010 Annual Report Download - page 58

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54
Archer Daniels Midland Company
Notes to Consolidated Financial Statements (Continued)
Note 4.
Inventories, Derivative Instruments & Hedging Activities (Continued)
The following table sets forth the fair value of derivatives not designated as hedging instruments as of June 30,
2010 and 2009.
2010
2009
Assets
Liabilities
Assets
Liabilities
(In millions)
(In millions)
FX Contracts
$ 200
$ 266
$ 46
$ 39
Interest Contracts
–
26
–
–
Commodity Contracts
2,727
3,152
1,781
2,139
Total
$ 2,927
$ 3,444
$ 1,827
$ 2,178
The following table sets forth the pre-tax gains (losses) on derivatives not designated as hedging instruments that
have been included in the consolidated statement of earnings for the indicated time periods. The amended
disclosure requirements of ASC Topic 815 were first implemented for the period ended March 31, 2009. As a
result, comparative year-to-date information is not available for fiscal year 2009.
Twelve months ended
June 30,
2010
(In millions)
Interest Contracts
Other income (expense) – net
$ (57)
FX Contracts
Net sales and other operating income
$ 0
Cost of products sold
61
Other income (expense) - net
(42)
Commodity Contracts
Cost of products sold
$ 242
Total gain (loss) recognized in earnings
$ 204
Derivatives Designated as Cash Flow Hedging Strategies
For derivative instruments that are designated and qualify as cash flow hedges (i.e., hedging the exposure to
variability in expected future cash flows that is attributable to a particular risk), the effective portion of the gain or
loss on the derivative instrument is reported as a component of other comprehensive income (OCI) and reclassified
into earnings in the same line item affected by the hedged transaction and in the same period or periods during
which the hedged transaction affects earnings. The remaining gain or loss on the derivative instrument that is in
excess of the cumulative change in the cash flows of the hedged item, if any (i.e., the ineffective portion), hedge
components excluded from the assessment of effectiveness, and gains and losses related to discontinued hedges are
recognized in the consolidated statement of earnings during the current period.