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Newell Rubbermaid Inc. 2009 Annual Report
61
The following table summarizes the Company’s outstanding derivative instruments and their effects on the Consolidated Balance Sheet as of
December 31, 2009 (in millions):
Assets Liabilities
Derivatives designated as hedging instruments Balance Sheet Location Fair Value Balance Sheet Location Fair Value
Interest rate swaps Other assets $20.9 Other noncurrent liabilities $2.5
Foreign exchange contracts on inventory-related purchases Prepaid expenses and other 0.6 Other accrued liabilities 1.5
Foreign exchange contracts on intercompany borrowings Prepaid expenses and other 0.7 Other accrued liabilities —
Total assets $22.2 Total liabilities $4.0
The fair values of outstanding derivatives that are not designated as hedges for accounting purposes were not material as of December 31, 2009.
The Company is a party to an interest rate swap in an asset position for which settlement could be accelerated if the Company’s credit rating falls below investment
grade. The Company is not a party to any derivatives that require collateral to be posted prior to settlement.
Fair Value Hedges
The pre-tax effects of derivative instruments designated as fair value hedges on the Company’s Consolidated Statements of Operations for the year ended
December 31, 2009 were as follows (in millions):
Location of gain (loss) Net gain (loss)
Instruments in fair value relationships recognized in income recognized in income
Interest rate swaps Interest expense, net $(43.9)
Fixed-rate debt Interest expense, net $ 43.9
The Company did not record any ineffectiveness related to fair value hedges during the year ended December 31, 2009.
Cash Flow Hedges
The pre-tax effects of derivative instruments designated as cash flow hedges on the Company’s Consolidated Statements of Operations and AOCI for the
year ended December 31, 2009 were as follows (in millions):
Gain (loss) Gain (loss)
Location of gain (loss) reclassified from recognized
Derivatives in cash flow hedging relationships recognized in income AOCI into income in AOCI
Foreign exchange contracts on inventory related purchases Cost of products sold $(2.6) $(9.5)
Foreign exchange contracts on intercompany borrowings Interest expense, net 2.5 7.7
Commodity contracts Cost of products sold (0.2) —
$(0.3) $(1.8)
The Company did not record any ineffectiveness related to cash flow hedges during the year ended December 31, 2009.
The Company paid approximately $109.0 million to settle foreign exchange contracts on intercompany borrowings during the year ended December 31, 2009,
and such amount is included in changes in accrued liabilities and other in the Consolidated Statement of Cash Flows for the year ended December 31, 2009.
The Company estimates that during the next 12 months it will reclassify net losses of approximately $0.9 million included in the pre-tax amount
recorded in AOCI as of December 31, 2009 into earnings, as the anticipated cash flows occur.