Google 2009 Annual Report Download - page 96

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Google Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The notional principal of foreign exchange contracts to purchase U.S. dollars with Euros was €1.9 billion (or
approximately $2.6 billion) and €1.6 billion (or approximately $2.2 billion) at December 31, 2008 and December 31, 2009;
the notional principal of foreign exchange contracts to purchase U.S. dollars with British pounds was £1.1 billion (or
approximately $1.8 billion) and £809.1 million (or approximately $1.3 billion) at December 31, 2008 and December 31,
2009; and the notional principal of foreign exchange contracts to purchase U.S. dollars with Canadian dollars was
C$229.7 million (or approximately $202.2 million) and C$306.2 million (or approximately $267.9 million) at
December 31, 2008 and December 31, 2009. These foreign exchange options have maturities of 36 months or less.
There were no other foreign exchange contracts designated as cash flow hedges.
Fair Value Hedges
In November 2009, we began using forward contracts designated as fair value hedges to hedge foreign currency
risks for our investments denominated in currencies other than the U.S. dollar. Gains and losses on these contracts are
recognized in interest income and other, net along with the offsetting losses and gains of the related hedged items. We
exclude changes in the time value for forward contacts from the assessment of hedge effectiveness and recognize them
in interest income and other, net. The notional principal of foreign exchange contracts to purchase U.S. dollars with
foreign currencies was $37.3 million at December 31, 2009.
Other Derivatives
Other derivatives not designated as hedging instruments consist primarily of forward contracts that we use to
hedge intercompany balances and other monetary assets or liabilities denominated in currencies other than the local
currency of a subsidiary. We recognize gains and losses on these contracts as well as the related costs in interest income
and other, net, along with the gains and losses of the related hedged items. The notional principal of foreign exchange
contracts to purchase U.S. dollars with foreign currencies was $2.6 billion and $2.4 billion at December 31, 2008 and
December 31, 2009. The notional principal of foreign exchange contracts to sell U.S. dollars for foreign currencies was
$54.2 million and $115.4 million at December 31, 2008 and December 31, 2009. The notional principal of foreign
exchange contracts to purchase Euros with other currencies was €630.5 million (or approximately $897.6 million) and
€618.0 million (or approximately $889.3 million) at December 31, 2008 and December 31, 2009. The notional principal
of foreign exchange contracts to sell Euros for other foreign currencies was €7.9 million (or approximately $11.3 million)
at December 31, 2009.
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