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The amounts of gains and losses recognized in the consolidated statement of operations on qualifying and non-
qualifying financial instruments used in hedging transactions were as follows:
Gain (Loss)
Reclassified from
AOCI
into Income
(Effective Portion)
Location of Gain
(Loss)
Reclassified
from AOCI
into Income
(Effective Portion)
In millions 2012 2011 2010
Derivatives in Cash Flow Hedging Relationships:
Foreign exchange contracts $(15) $ 8 $42 Costofproductssold
Fuel oil contracts —4 4 Cost of products sold
Natural gas contracts (7) (20) (15) Cost of products sold
Total $(22) $(8) $31
Gain (Loss)
Recognized in
Income
Location of Gain (Loss)
in Consolidated Statement of
Operations
In millions 2012 2011 2010
Derivatives in Fair Value Hedging Relationships:
Interest rate contracts $— $(10) $ 25 Interest expense, net
Debt —10 (25) Interest expense, net
Total $ — $— $—
Derivatives Not Designated as Hedging Instruments:
Electricity Contracts $(4) $ — $ — Cost of products sold
Embedded derivatives (4) (3) 3 Interest expense, net
Foreign exchange contracts —(14)(a) 33 Costofproductssold
Interest rate contracts 22 3 20(b) Interest expense, net
Total $ 14 $ (14) $56
(a) Premium costs of $5 million in connection with the acquisition of APPM are included in Restructuring and other charges in the accompany-
ing consolidated statement of operations.
(b) Includes a gain of $22 million due to changes in the fair value of interest rate swap agreements of $1.0 billion floating-to-fixed notional and
an offsetting $1.0 billion fixed-to-floating notional that did not qualify as hedges under the accounting guidance and matured in September
2010.
The following activity is related to fully effective interest rate swaps designated as fair value hedges:
2012 2011
In millions Issued Terminated Undesignated Issued Terminated Undesignated
Fourth Quarter $— $— $— $— $— $—
Third Quarter —— —— 464(b) —
Second Quarter —— —100(a) — —
First Quarter —— —100(a) — —
Total $ — $ — $ — $200 $464 $ —
(a) Fixed-to-floating interest rate swaps were effective when issued and were terminated in the third quarter of 2011.
(b) Terminations of fixed-to-floating interest rate swaps were not in connection with early debt retirements. The resulting $27 million gain was
deferred and recorded in Long-term debt and is being amortized as an adjustment of Interest expense over the life of the respective under-
lying debt through June 2014, March 2015 or March 2016.
75