Kraft 2007 Annual Report Download - page 59

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The estimated potential one-day loss in fair value of our interest rate-sensitive instruments, primarily debt, under normal market
conditions and the estimated potential one-day loss in pre-tax earnings from our foreign currency and commodity instruments
under normal market conditions, as calculated in the VAR model, were (in millions):
Pre-Tax Earnings Impact Fair Value Impact
At 12/31/07 Average High Low At 12/31/07 Average High Low
Instruments sensitive to:
Interest rates $ 94 $ 49 $ 94 $ 23
Foreign currency
rates $ 17 $ 22 $ 28 $ 17
Commodity prices 27 19 27 15
Pre-Tax Earnings Impact Fair Value Impact
At 12/31/06 Average High Low At 12/31/06 Average High Low
Instruments sensitive to:
Interest rates $ 26 $ 28 $ 31 $ 26
Foreign currency
rates $ 25 $ 27 $ 36 $ 23
Commodity prices 3693
This VAR computation is a risk analysis tool designed to statistically estimate the maximum probable daily loss from adverse
movements in interest rates, foreign currency rates and commodity prices under normal market conditions. The computation
does not represent actual losses in fair value or earnings to be incurred by Kraft, nor does it consider the effect of favorable
changes in market rates. We cannot predict actual future movements in such market rates and do not present these VAR results
to be indicative of future movements in such market rates or to be representative of any actual impact that future changes in
market rates may have on our future financial results.
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