Johnson Controls 2014 Annual Report Download - page 80

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80
Derivatives and Hedging Activities
Designated as Hedging Instruments
under ASC 815
Derivatives and Hedging Activities Not
Designated as Hedging Instruments
under ASC 815
September 30,
2014 September 30,
2013 September 30,
2014 September 30,
2013
Other current assets
Foreign currency exchange derivatives $ 21 $ 19 $ 13 $ 14
Commodity derivatives — 8 — —
Interest rate swaps — 2 — —
Cross-currency interest rate swaps 15 7 — —
Other noncurrent assets
Interest rate swaps 2 3 — —
Equity swap — — 192 183
Total assets $ 38 $ 39 $ 205 $ 197
Other current liabilities
Foreign currency exchange derivatives $ 22 $ 21 $ 11 $ 11
Commodity derivatives 3 3 — —
Current portion of long-term debt
Fixed rate debt swapped to floating 125 452 — —
Long-term debt
Fixed rate debt swapped to floating 1,649 927 — —
Other noncurrent liabilities
Interest rate swaps 3———
Total liabilities $ 1,802 $ 1,403 $ 11 $ 11
The Company enters into International Swaps and Derivatives Associations (ISDA) master netting agreements with counterparties
that permit the net settlement of amounts owed under the derivative contracts. The master netting agreements generally provide
for net settlement of all outstanding contracts with a counterparty in the case of an event of default or a termination event. The
Company has not elected to offset the fair value positions of the derivative contracts recorded in the consolidated statements of
financial position. Collateral is generally not required of the Company or the counterparties under the master netting agreements.
As of September 30, 2014 and September 30, 2013, no cash collateral was received or pledged under the master netting agreements.
The gross and net amounts of derivative assets and liabilities were as follows (in millions):
Fair Value of Assets Fair Value of Liabilities
September 30,
2014 September 30,
2013 September 30,
2014 September 30,
2013
Gross amount recognized $ 243 $ 236 $ 1,813 $ 1,414
Gross amount eligible for offsetting (11) (9) (11) (9)
Net amount $ 232 $ 227 $ 1,802 $ 1,405
The following tables present the location and amount of the effective portion of gains and losses gross of tax on derivative
instruments and related hedge items reclassified from AOCI into the Company’s consolidated statements of income for the fiscal
years ended September 30, 2014 and 2013 and amounts recorded in AOCI net of tax in the consolidated statements of financial
position (in millions):
Location of Gain (Loss)
Reclassified from AOCI into Income
Amount of Gain (Loss) Reclassified from AOCI into Income
Derivatives in ASC 815 Cash Flow
Hedging Relationships
Year Ended September 30,
2014 2013
Foreign currency exchange derivatives Cost of sales $ (2) $ 1
Commodity derivatives Cost of sales 1 2
Forward treasury locks Net financing charges 1 2
Total $ — $ 5