Kraft 2009 Annual Report Download - page 225

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Financial Instruments:
Financial Instruments:
(USD $)
12 Months Ended
12/31/2009
Financial Instruments: Note 12. Financial Instruments:
Fair Value of Derivative Instruments:
The fair values of derivative instruments recorded in the consolidated balance sheet as of December 31, 2009 were:
December 31, 2009
Asset
Derivatives
Liability
Derivatives
(in millions)
Derivatives designated as
hedging instruments:
Foreign exchange contracts $ 8 $ 158
Commodity contracts 25 14
Interest rate contracts 153 -
$ 186 $ 172
Derivatives not designated
as hedging instruments:
Foreign exchange contracts $ 2 $ -
Commodity contracts 71 62
$ 73 $ 62
Total fair value $ 259 $ 234
We include the fair value of our asset derivatives within other current assets and the fair value of our liability derivatives within other current liabilities.
The fair values (asset / (liability)) of our derivative instruments at December 31, 2009 were determined using:
Total Fair Value
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
Significant
Other Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
(in millions)
Foreign exchange contracts $ (148) $ - $ (148) $ -
Commodity contracts 20 11 8 1
Interest rate contracts 153 - 153 -
Total derivatives $ 25 $ 11 $ 13 $ 1
Cash Flow Hedges:
Cash flow hedges affected accumulated other comprehensive earnings / (losses), net of income taxes, as follows:
2009 2008 2007
(in millions)
Accumulated gain / (loss) at beginning
of period $ (23) $ 27 $ (4)
Transfer of realized (gains) / losses in
fair value to earnings 111 26 (10)
Unrealized gain / (loss) in fair value 13 (76) 41
Accumulated gain / (loss) at
December 31 $ 101 $ (23) $ 27
The effect of cash flow hedges for the year ended December 31, 2009 was:
Gain / (Loss)
Recognized in OCI
(Gain) / Loss
Reclassified from
AOCI into Earnings
(in millions)
Foreign exchange contracts -
intercompany loans $ (12) $ -
Foreign exchange contracts -
forecasted transactions (40) (27)
Commodity contracts (27) 138
Interest rate contracts 92 -
Total $ 13 $ 111
Gain / (Loss) on
Ineffectiveness
Recognized
in Earnings
Gain / (Loss) on
Amount Excluded
from Effectiveness
Testing Recognized
in Earnings
(in millions)
Foreign exchange contracts -
intercompany loans $ - $ -
Foreign exchange contracts -
forecasted transactions - -
Commodity contracts 12 1
Interest rate contracts - -
Total $ 12 $ 1
Source: KRAFT FOODS INC, 10-K, February 25, 2010 Powered by Morningstar® Document Research℠