Kodak 2009 Annual Report Download - page 86

84
The location and amounts of gains and losses related to derivatives reported in the Consolidated Statement of Operations are shown
in the following tables:
Derivatives in Cash Flow
Hedging Relationships
Gain (Loss) Recognized
in OCI on Derivative
(Effective Portion)
Gain (Loss) Reclassified
from Accumulated OCI
Into Cost of Goods Sold
(Effective Portion)
Gain (Loss) Recognized
in Income on Derivative
(Ineffective Portion and
Amount Excluded from
Effectiveness Testing)
(in millions)
For the Year Ended
December 31,
For the Year Ended
December 31,
For the Year Ended
December 31,
2009 2008 2009 2008 2009 2008
Commodity contracts $ 12 $ (16) $ 7 $ 8 $ - $ -
Foreign exchange contracts - - (2) - - -
Derivatives Not Designated as
Hedging Instruments
Location of Gain or (Loss) Recognized
in Income on Derivative
Gain (Loss) Recognized in
Income on Derivative
(in millions)
For the Year Ended
December 31,
2009 2008
Foreign exchange contracts Other income (charges), net $29 $(75)
Foreign Currency Forward Contracts
The Company’s foreign currency forward contracts used to hedge existing foreign currency denominated assets and liabilities are
not designated as hedges, and are marked to market through net (loss) earnings at the same time that the exposed assets and
liabilities are remeasured through net (loss) earnings (both in Other income (charges), net). The notional amount of such contracts
open at December 31, 2009 was approximately $900 million. The majority of the contracts of this type held by the Company are
denominated in euros and British pounds.
Additionally, the Company may enter into foreign currency forward contracts that are designated as cash flow hedges of exchange
rate risk related to forecasted foreign currency denominated purchases, sales and intercompany sales.
A subsidiary of the Company has entered into intercompany foreign currency forward contracts that were designated as cash flow
hedges of exchange rate risk related to forecasted foreign currency denominated intercompany sales. By December 31, 2009, all
such contracts had been dedesignated as hedges according to the hedge strategy and there were no related amounts remaining in
accumulated other comprehensive (loss) income. During 2009, a gain of less than $1 million was reclassified into cost of goods sold.
Hedge ineffectiveness was insignificant. The fair value of the remaining open contracts was a net gain of less than $1 million and the
notional amount was $2 million.
A subsidiary of the Company has entered into intercompany foreign currency forward contracts that were designated as cash flow
hedges of exchange rate risk related to forecasted foreign currency denominated purchases. By December 31, 2009, all such
contracts had been dedesignated as hedges according to the hedge strategy and there were no related amounts remaining in
accumulated other comprehensive (loss) income. During 2009, a loss of $2 million was reclassified into cost of goods sold. Hedge
ineffectiveness was insignificant. The fair value of the remaining open contracts was a net loss of less than $1 million and the
notional amount was $5 million.
Silver Forward Contracts
The Company enters into silver forward contracts that are designated as cash flow hedges of commodity price risk related to
forecasted purchases of silver. The value of the notional amounts of such contracts open at December 31, 2009 was $41 million.
Hedge gains and losses related to these silver forward contracts are reclassified into cost of goods sold as the related silver-
containing products are sold to third parties. These gains or losses transferred to cost of goods sold are generally offset by increased
or decreased costs of silver purchased in the open market. The amount of existing gains and losses at December 31, 2009 to be
reclassified into earnings within the next 12 months is a net gain of $6 million. At December 31, 2009, the Company had hedges of
forecasted purchases through October 2010.