Ford 2012 Annual Report Download - page 131

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Ford Motor Company | 2012 Annual Report 129
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 18. DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES (Continued)
Income Effect of Derivative Financial Instruments
The following table summarizes by hedge designation the pre-tax gains/(losses) recorded in Other comprehensive
income/(loss) ("OCI"), reclassified from Accumulated other comprehensive income/(loss) ("AOCI") to income and/or
recognized directly in income for the years ended December 31 (in millions):
2012 2011 2010
Gain/
(Loss)
Recorded
in OCI
Gain/(Loss)
Reclassified
from AOCI
to Income
Gain/(Loss)
Recognized
in Income
Gain/
(Loss)
Recorded
in OCI
Gain/(Loss)
Reclassified
from AOCI
to Income
Gain/(Loss)
Recognized
in Income
Gain/
(Loss)
Recorded
in OCI
Gain/(Loss)
Reclassified
from AOCI
to Income
Gain/(Loss)
Recognized
in Income
Automotive Sector
Cash flow hedges
Foreign currency exchange
contracts $ (371) $ (377) $ 1 $ (100) $ 119 $ (3) $ (7) $ 17 $ —
Derivatives not designated as
hedging instruments
Foreign currency exchange
contracts $(138) $ 20 $ (183)
Commodity contracts (65) (423) 68
Other – warrants (4) (1) 2
Total $(207) $ (404) $ (113)
Financial Services Sector
Fair value hedges
Interest rate contracts
Net interest settlements
and accruals excluded
from the assessment of
hedge effectiveness $ 177 $ 217 $225
Ineffectiveness (a) 16 (30) (6)
Total $ 193 $ 187 $219
Derivatives not designated as
hedging instruments
Interest rate contracts $ (14) $ (5) $ 38
Foreign currency exchange
contracts (70) (48)(88)
Cross-currency interest rate
swap contracts (150) (3) (1)
Other (b) (81) 65 —
Total $(315) $ 9 $ (51)
__________
(a) For 2012, 2011, and 2010, hedge ineffectiveness reflects change in fair value on derivatives of $228 million gain, $433 million gain, and
$117 million gain, respectively, and change in value on hedged debt attributable to the change in benchmark interest rate of $212 million loss,
$463 million loss, and $123 million loss, respectively.
(b) Reflects gains/(losses) for derivative features included in the FUEL Notes (see Note 4).
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