Microsoft 2010 Annual Report Download - page 52

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51
Cash-Flow Hedges
We recognized the following gains (losses) related to foreign exchange contracts designated as cash flow hedges
(our only cash flow hedges during the period):
(In millions)
Y
ear Ended June 30, 2010 2009
Effective Portion
Gain recognized in OCI, net of tax effect of $188 and $472 $ 349 $ 876
Gain reclassified from OCI into revenue $ 495 $ 884
Amount Excluded from Effectiveness Assessment and Ineffective Portion
Loss recognized in other income (expense) $ (174)$ (314)
We estimate that $496 million of net derivative gains included in OCI will be reclassified into earnings within the next
12 months. No significant amounts of gains (losses) were reclassified from OCI into earnings as a result of
forecasted transactions that failed to occur during fiscal year 2010.
Non-Designated Derivatives
Gains (losses) from changes in fair values of derivatives that are not designated as hedges are primarily recognized
in other income (expense). These amounts are shown in the table below, with the exception of gains (losses) on
derivatives presented in income statement line items other than other income (expense), which were immaterial for
the fiscal years 2010 and 2009. Other than those derivatives entered into for investment purposes, such as
commodity contracts, the gains (losses) below are generally economically offset by unrealized gains (losses) in the
underlying available-for-sale securities.
(In millions)
Y
ear Ended June 30, 2010 2009
Foreign exchange contracts $ 106 $ (234)
Equity contracts 12 (131)
Interest-rate contracts (4) 5
Credit contracts 22 (18)
Commodity contracts (1) (126)
Total $ 135 $ (504)