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Notes to the Consolidated
Financial Statements
Dollars in millions, except per-share data and unless otherwise indicated.
84 Xerox 2010 Annual Report
Summary of Derivative Instruments Fair Values
The following table provides a summary of the fair value amounts of
derivative instruments at December 31, 2010 and 2009, respectively.
Fair Value
Designation of Derivatives Balance Sheet Location 2010 2009
Derivatives Designated as Hedging Instruments
Foreign exchange contracts – forwards Other current assets $ 19 $ 4
Other current liabilities (1) (3)
Interest rate swaps Other long-term assets 11 10
Other long-term liabilities — (9)
Net Designated Assets $ 29 $ 2
Derivatives NOT Designated as Hedging Instruments
Foreign exchange contracts – forwards Other current assets $ 26 $ 12
Other current liabilities (18) (12)
Net Undesignated Assets $ 8 $ —
Summary of Derivatives Total Derivative Assets $ 56 $ 26
Total Derivative Liabilities (19) (24)
Net Derivative Asset $ 37 $ 2
Location of Gain Derivative Gain (Loss) Hedged Item Gain (Loss)
Derivatives in Fair Value (Loss) Recognized Recognized in Income Recognized in Income
Hedging Relationships in Income 2010 2009 2008 2010 2009 2008
Interest rate contracts Interest expense $99 $(18) $206 $(99) $18 $(206)
Location of
Derivative Gain (Loss) Derivative Gain (Loss) Gain (Loss)
Recognized in OCI Reclassified from Reclassified from AOCI
Derivatives in Cash Flow (Effective Portion) AOCI into Income to Income (Effective Portion)
Hedging Relationships 2010 2009 2008 (Effective Portion) 2010 2009 2008
Interest rate contracts $ — $ — $ (2) Interest expense $ — $ — $ —
Foreign exchange contracts –
forwards 46 (1) 4 Cost of sales 28 2 2
Total Cash Flow Hedges $ 46 $ (1) $ 2 $ 28 $ 2 $ 2
No amount of ineffectiveness was recorded in the Consolidated
Statements of Income for these designated cash flow hedges and all
components of each derivative’s gain or loss was included in the
assessment of hedge effectiveness.
Summary of Derivative Instruments Gains (Losses)
Derivative gains and losses affect the income statement based on
whether such derivatives are designated as hedges of underlying
exposures. The following is a summary of derivative gains and losses.
Designated Derivative Instruments Gains (Losses)
The following table provides a summary of the gains and losses
on designated derivative instruments for the three years ended
December 31, 2010: