Time Magazine 2009 Annual Report Download - page 125

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The following is a summary of amounts pertaining to Time Warner’s use of foreign currency derivatives at
December 31, 2009 (millions):
December 31,
2009
Qualifying Hedges
Assets ............................................................ $ 90
Liabilities .......................................................... (137)
Economic Hedges
Assets ............................................................ $ 7
Liabilities .......................................................... (43)
Netting provisions are provided for in existing International Swap and Derivative Association Inc. agreements
in situations where the Company executes multiple contracts with the same counterparty. As a result, net assets or
liabilities resulting from foreign exchange derivatives subject to these netting agreements are classified within
prepaid expenses and other current assets or accounts payable and accrued expenses in the Company’s consolidated
balance sheet. At December 31, 2009, $61 million of losses related to cash flow hedges are recorded in accumulated
other comprehensive income in the Company’s consolidated balance sheet and are expected to be recognized in
earnings at the same time hedged items affect earnings. Included in this amount are deferred net losses of
$17 million related to hedges of cash flows associated with films that are not expected to be released within the next
twelve months.
The following is a summary of amounts pertaining to Time Warner’s use of foreign currency derivatives for the
year ended December 31, 2009 (millions):
December 31,
2009
Fair Value Hedges
Gain (loss) — Effective Portion:
Costs of revenues .................................................. $ 17
Gain (loss) recognized in net income and excluded from effectiveness testing —
Ineffective Portion:
Other income (loss), net ............................................. 5
Cash Flow Hedges
Gain (loss) — Effective Portion:
Recorded to accumulated other comprehensive income ....................... $ 7
Reclassified from accumulated other comprehensive income to net income:
Selling, general and administrative expense ............................. (17)
Costs of revenues ................................................ (40)
Gain (loss) recognized in net income and excluded from effectiveness testing —
Ineffective Portion:
Other income (loss), net ............................................. (12)
Economic Hedges
Gain (loss):
Costs of revenues .................................................. $ (27)
Other income (loss), net ............................................. (3)
113
TIME WARNER INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)