DuPont 2014 Annual Report Download - page 94

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E. I. du Pont de Nemours and Company
Notes to the Consolidated Financial Statements (continued)
(Dollars in millions, except per share)
F-41
As of December 31, 2014, there was $76 of unrecognized stock-based compensation expense related to nonvested awards. That
cost is expected to be recognized over a weighted-average period of 1.88 years. The total fair value of stock units vested during
2014, 2013 and 2012 was $75, $75 and $68, respectively.
Other Cash-based Awards
Cash awards under the EIP plan may be granted to employees who have contributed most to the company's success, with
consideration being given to the ability to succeed to more important managerial responsibility. Such awards were $38, $60 and
$60 for 2014, 2013 and 2012, respectively. The amounts of the awards are dependent on company earnings and are subject to
maximum limits as defined under the governing plans.
In addition, the company has other variable compensation plans under which cash awards may be granted. These plans include
the company's regional and local variable compensation plans and Pioneer's Annual Reward Program. Such awards were $151,
$317 and $379 for 2014, 2013 and 2012, respectively.
19. DERIVATIVES AND OTHER HEDGING INSTRUMENTS
Objectives and Strategies for Holding Derivative Instruments
In the ordinary course of business, the company enters into contractual arrangements (derivatives) to reduce its exposure to foreign
currency, interest rate and commodity price risks. The company has established a variety of derivative programs to be utilized
for financial risk management. These programs reflect varying levels of exposure coverage and time horizons based on an
assessment of risk.
Derivative programs have procedures and controls and are approved by the Corporate Financial Risk Management Committee,
consistent with the company's financial risk management policies and guidelines. Derivative instruments used are forwards,
options, futures and swaps. The company has not designated any nonderivatives as hedging instruments.
The company's financial risk management procedures also address counterparty credit approval, limits and routine exposure
monitoring and reporting. The counterparties to these contractual arrangements are major financial institutions and major
commodity exchanges. The company is exposed to credit loss in the event of nonperformance by these counterparties. The company
utilizes collateral support annex agreements with certain counterparties to limit its exposure to credit losses. The company's
derivative assets and liabilities are reported on a gross basis in the Consolidated Balance Sheets. The company anticipates
performance by counterparties to these contracts and therefore no material loss is expected. Market and counterparty credit risks
associated with these instruments are regularly reported to management.
The notional amounts of the company's derivative instruments were as follows:
December 31, 2014 2013
Derivatives designated as hedging instruments:
Interest rate swaps $ 1,000 $ 1,000
Foreign currency contracts 434 1,107
Commodity contracts 388 606
Derivatives not designated as hedging instruments:
Foreign currency contracts 10,586 9,553
Commodity contracts 166 281
Foreign Currency Risk
The company's objective in managing exposure to foreign currency fluctuations is to reduce earnings and cash flow volatility
associated with foreign currency rate changes. Accordingly, the company enters into various contracts that change in value as
foreign exchange rates change to protect the value of its existing foreign currency-denominated assets, liabilities, commitments
and cash flows.