Dow Chemical 2009 Annual Report Download - page 145

Table of Contents
Effect of Derivative Instruments
at December 31, 2009
In millions
Change in
Unrealized
Loss in AOCI
(1) Income Statement Classification
Gain (Loss)
Reclassified
from AOCI to
Income (2)
Additional
Gain (Loss)
Recognized in
Income (2,3)
Derivatives designated as hedges:
Fair value:
Interest rates - Interest expense (4) - $ (1)
Cash flow:
Interest rates - Cost of sales $ (9) -
Interest rates - Interest expense (4) (1) -
Commodities $ (2) Cost of sales (306) (1)
Foreign currency (10) Cost of sales 11 -
Net foreign investment:
Foreign currency - n/a - -
Total derivatives designated as hedges $ (12) $ (305) $ (2)
Derivatives not designated as hedges:
Foreign currency (5) - Sundry income – net - $ (32)
Commodities - Cost of sales - 3
Total derivatives not designated as hedges - - $ (29)
Total derivatives $ (12) $ (305) $ (31)
Effect of Derivative Instruments
at December 31, 2008
In millions
Change in
Unrealized
Gain (Loss) in
AOCI (1) Income Statement Classification
Loss
Reclassified
from AOCI to
Income (2)
Additional Loss
Recognized in
Income (2,3)
Derivatives designated as hedges:
Fair value:
Interest rates - Interest expense (4) - $ (2)
Cash flow:
Interest rates - Cost of sales $ (12) -
Interest rates - Interest expense (4) (1) -
Commodities $ (353) Cost of sales (154) (1)
Foreign currency 7 Cost of sales (12) -
Net foreign investment:
Foreign currency 1 n/a - -
Total derivatives designated as hedges $ (345) $ (179) $ (3)
Derivatives not designated as hedges:
Foreign currency (5) - Sundry income – net - $ (167)
Commodities - Cost of sales - (34)
Total derivatives not designated as hedges - - $ (201)
Total derivatives $ (345) $ (179) $ (204)
(1) Net unrealized gains/losses from hedges related to interest rates and commodities are included in “Accumulated Derivative Gain (Loss) – Net hedging results” in the
consolidated statements of equity; net unrealized gains/losses from hedges related to foreign currency (net of tax) are included in “Cumulative Translation Adjustments –
Translation adjustments” in the consolidated statements of equity.
(2) Pretax amounts.
(3) Amounts impacting income not related to AOCI reclassification; also includes immaterial amounts of hedge ineffectiveness.
(4) Interest expense and amortization of debt discount.
(5) Foreign currency derivatives not designated as hedges are offset by foreign exchange gains/losses resulting from the underlying exposures of foreign currency denominated
assets and liabilities.
The net after-tax amounts to be reclassified from AOCI to income within the next 12 months are a $2 million loss for interest rate contracts and a
$5 million loss for foreign currency contracts.
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