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Table of Contents E. I. du Pont de Nemours and Company
Notes to the Consolidated Financial Statements (continued)
(Dollars in millions, except per share)
Derivatives not Designated in Hedging Relationships
Foreign Currency Contracts
The company routinely uses forward exchange contracts to reduce its net exposure, by currency, related to foreign currency-denominated monetary assets and
liabilities of its operations so that exchange gains and losses resulting from exchange rate changes are minimized. The netting of such exposures precludes the
use of hedge accounting; however, the required revaluation of the forward contracts and the associated foreign currency-denominated monetary assets and
liabilities intends to achieve a minimal earnings impact, after taxes. Additionally, in 2011, the company entered into cross-currency swaps to hedge foreign
currency fluctuations on long-term intercompany loans associated with the acquisition of Danisco businesses.
Commodity Contracts
The company also utilizes options, futures and swaps that are not designated as hedging instruments to reduce exposure to commodity price fluctuations on
purchases of inventory such as corn, soybeans and soybean meal and electricity.
Fair Values of Derivative Instruments
The table below presents the fair values of the company's derivative assets and liabilities within the fair value hierarchy, as described in Note 1, as of
December 31, 2011 and 2010.
Fair Value at December 31
Using Level 2 Inputs
Balance Sheet Location 2011 2010
Asset derivatives:
Derivatives designated as hedging instruments:
Interest rate swaps Other assets $ 66 $ 40
Foreign currency contracts Accounts and notes receivable, net 44 20
Commodity contracts Accounts and notes receivable, net — 3
110 63
Derivatives not designated as hedging instruments:
Foreign currency contracts Accounts and notes receivable, net 100 90
Foreign currency contracts Other assets 43 —
143 90
Total asset derivatives $ 253 $ 153
Liability derivatives:
Derivatives designated as hedging instruments:
Foreign currency contracts Other accrued liabilities $ 12 $ 3
Commodity contracts Other accrued liabilities 1 75
13 78
Derivatives not designated as hedging instruments:
Foreign currency contracts Other accrued liabilities 21 54
Commodity contracts Other accrued liabilities 2 —
23 54
Total liability derivatives $ 36 $ 132
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