Kraft 2009 Annual Report Download - page 95
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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
We record (i) the gain or loss reclassified from accumulated other comprehensive earnings / (losses) into earnings, (ii) the gain or loss on
ineffectiveness, and (iii) the gain or loss on the amount excluded from effectiveness testing in:
• cost of sales for commodity contracts;
• cost of sales or marketing, administration and research costs for foreign exchange contracts related to forecasted transactions,
depending on the type of transaction; and
• interest and other expense, net for interest rate contracts and foreign exchange contracts related to intercompany loans.
As of December 31, 2009, we expected to transfer unrealized losses of $2 million (net of taxes) for commodity cash flow hedges and unrealized
gains of $5 million (net of taxes) for foreign currency cash flow hedges to earnings during the next 12 months.
Hedge Coverage:
As of December 31, 2009, we had hedged forecasted transactions for the following durations:
• commodity transactions for periods not exceeding the next 19 months;
• interest rate transactions for periods not exceeding the next 33 years and 1 month; and
• foreign currency transactions for periods not exceeding the next 24 months, and excluding intercompany loans, we had hedged
forecasted foreign currency transactions for periods not exceeding the next 12 months.
92
Source: KRAFT FOODS INC, 10-K, February 25, 2010 Powered by Morningstar® Document Research℠