DELPHI 2012 Annual Report Download - page 122

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100
The effect of derivative financial instruments in the consolidated statement of operations and and consolidated statement
of comprehensive income for the year ended December 31, 2012 is as follows:
Year Ended December 31, 2012
Gain
Recognized in
OCI (Effective
Portion)
(Loss) Gain
Reclassified
from OCI
into Income
(Effective
Portion)
Gain Recognized
in Income
(Ineffective
Portion Excluded
from Effectiveness
Testing)
(in millions)
Designated derivatives instruments:
Commodity derivatives.......................................................................... $ 11 $ (12) $ —
Foreign currency derivatives.................................................................. 79 10 1
Total................................................................................................ $ 90 $ (2) $ 1
Loss
Recognized in
Income
Derivatives not designated:
Commodity derivatives........................................................................................................................................ $ —
Foreign currency derivatives................................................................................................................................ (5)
Total.............................................................................................................................................................. $ (5)
The effect of derivative financial instruments in the consolidated statement of operations and consolidated statement of
comprehensive income for the year ended December 31, 2011 is as follows:
Year Ended December 31, 2011
Loss
Recognized in
OCI (Effective
Portion)
Gain
Reclassified
from OCI
into Income
(Effective
Portion)
Loss Recognized
in Income
(Ineffective
Portion Excluded
from Effectiveness
Testing)
(in millions)
Designated derivatives instruments:
Commodity derivatives......................................................................... $(52) $ 28 $ (1)
Foreign currency derivatives................................................................. (56) 18 —
Total............................................................................................... $(108) $ 46 $ (1)
Gain
Recognized in
Income
Derivatives not designated:
Commodity derivatives........................................................................................................................................ $ —
Foreign currency derivatives................................................................................................................................ 2
Total.............................................................................................................................................................. $ 2
The gain or loss reclassified from OCI into income for the effective portion of designated derivative instruments and the
gain or loss recognized in income for the ineffective portion of designated derivative instruments excluded from effectiveness
testing were recorded to cost of sales in the consolidated statements of operations for the years ended December 31, 2012 and
2011. The gain or loss recognized in income for non-designated derivative instruments was recorded in other income, net and
cost of goods sold for the years ended December 31, 2012 and 2011.
Gains and losses on derivatives qualifying as cash flow hedges are recorded in OCI, to the extent that hedges are
effective, until the underlying transactions are recognized in earnings. Unrealized amounts in accumulated OCI will fluctuate
based on changes in the fair value of hedge derivative contracts at each reporting period. Income included in accumulated OCI
as of December 31, 2012 was $21 million ($14 million net of tax). Of this income, approximately $12 million is expected to be
included in cost of sales within the next 12 months and $9 million is expected to be included in cost of sales in subsequent
periods. Cash flow hedges are discontinued when Delphi determines it is no longer probable that the originally forecasted
transactions will occur. The amount included in cost of sales related to hedge ineffectiveness was approximately $1 million and
$1 million for the years ended December 31, 2012 and 2011, respectively.