Ford 2014 Annual Report Download - page 157

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FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 16. DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES (Continued)
Income Effect of Derivative Financial Instruments
The gains/(losses), by hedge designation, recorded in income for the years ended December 31 were as follows
(in millions):
2014 2013 2012
Automotive Sector
Cash flow hedges (a)
Reclassified from AOCI to income $ 78 $ (80)$ (377)
Ineffectiveness — (3) 1
Derivatives not designated as hedging instruments
Foreign currency exchange contracts 193 (26) (138)
Commodity contracts (47)(84)(65)
Other – warrants — — (4)
Total $ 224 $(193)$ (583)
Financial Services Sector
Fair value hedges
Interest rate contracts
Net interest settlements and accruals excluded from the assessment of hedge
effectiveness $ 304 $254 $177
Ineffectiveness (b) 20 (44) 16
Derivatives not designated as hedging instruments
Interest rate contracts (41)(33)(14)
Foreign currency exchange contracts 68 21 (70)
Cross-currency interest rate swap contracts 161 (88) (150)
Other — — (81)
Total $ 512 $110 $ (122)
__________
(a) For 2014, 2013, and 2012, a $271 million loss, a $317 million gain, and a $371 million loss, respectively, were recorded in OCI.
(b) For 2014, 2013, and 2012, hedge ineffectiveness reflects the net change in fair value on derivatives of $407 million gain, $658 million loss, and
$228 million gain, respectively, and change in value on hedged debt attributable to the change in benchmark interest rate of $387 million loss,
$614 million gain, and $212 million loss, respectively.
FS-51