Abbott Laboratories 2013 Annual Report Download - page 49

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ABBOTT 2013 ANNUAL REPORT
47
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The following table summarizes the activity for foreign currency
forward exchange contracts designated as cash flow hedges, debt
designated as a hedge of net investment in a foreign subsidiary
and the amounts and location of income (expense) and gain
The interest rate swaps are designated as fair value hedges of
the variability of the fair value of fixed-rate debt due to changes
in the long-term benchmark interest rates. The hedged debt is
marked to market, offsetting the effect of marking the interest
rate swaps to market.
(loss) reclassified into income and for certain other derivative
financial instruments. The amount of hedge ineffectiveness was
not significant in 2013, 2012 and 2011 for these hedges.
The carrying values and fair values of certain financial instruments
as of December 31 are shown in the table below. The carrying values
of all other financial instruments approximate their estimated fair
values. The counterparties to financial instruments consist of select
major international financial institutions. Abbott does not expect
any losses from nonperformance by these counterparties.
Gain (loss) Recognized in Income (expense) and
Other Comprehensive Gain (loss) Reclassified
Income (loss) into Income
(in millions) 2013 2012 2011 2013 2012 2011 Income Statement Caption
Foreign currency forward exchange contracts
designated as cash flow hedges $ 35 $ 13 $ 67 $ 47 $114 $ (44) Cost of products sold
Debt designated as a hedge of net investment
in a foreign subsidiary 110 65 (30) — — — n/a
Interest rate swaps designated as fair value hedges n/a n/a n/a (98) 62 488 Interest expense
Foreign currency forward exchange contracts Net foreign exchange
not designated as hedges n/a n/a n/a 88 131 (41) (gain) loss
2013 2012
Carrying Fair Carrying Fair
(in millions) Value Value Value Value
Long‑term Investment Securities:
Equity securities $   93 $   93 $   213 $   213
Other 26 24 61 56
Total Long‑term Debt (3,397) (3,930) (18,394) (19,588)
Foreign Currency Forward Exchange Contracts:
Receivable position 84 84 120 120
(Payable) position (75) (75) (146) (146)
Interest Rate Hedge Contracts:
Receivable position 87 87 185 185
(Payable) position — — (80) (80)