Kraft 2010 Annual Report Download - page 57

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As of December 31, 2010, 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 12/31/10 Average High Low At 12/31/10 Average High Low
Instruments sensitive to:
Interest rates $ 237 $ 176 $ 237 $ 97
Foreign currency rates $ 13 $ 8 $ 13 $ 4
Commodity prices 34 22 34 9
Pre-Tax Earnings Impact Fair Value Impact
At 12/31/09 Average High Low At 12/31/09 Average High Low
Instruments sensitive to:
Interest rates $ 123 $ 175 $ 239 $ 114
Foreign currency rates $ 8 $ 11 $ 15 $ 8
Commodity prices 31 30 36 24
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 Foods, 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.
54