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HEDGING TRANSACTIONS AND DERIVATIVE FINANCIAL INSTRUMENTS (Tables)
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12 Months Ended |
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Dec. 31, 2011
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| Hedging Transactions and Derivative Financial Instruments Disclosures [Abstract] |
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| Derivative instruments, fair value, designated as hedging instruments |
The following table presents the fair values of the Company's derivative instruments that were designated and qualified as part of a hedging relationship (in millions):
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Fair Value1,2
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Derivatives Designated as Hedging Instruments |
Balance Sheet Location1
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December 31,
2011 |
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December 31,
2010 |
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Assets: |
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|
|
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Foreign currency contracts |
Prepaid expenses and other assets |
|
$ |
170 |
|
|
$ |
32 |
|
Commodity contracts |
Prepaid expenses and other assets |
|
2 |
|
|
4 |
|
Interest rate swaps |
Other assets |
|
246 |
|
|
— |
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Total assets |
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$ |
418 |
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$ |
36 |
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Liabilities: |
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Foreign currency contracts |
Accounts payable and accrued expenses |
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$ |
41 |
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$ |
141 |
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Commodity contracts |
Accounts payable and accrued expenses |
|
1 |
|
|
2 |
|
Interest rate swaps |
Other liabilities |
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— |
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|
97 |
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Total liabilities |
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$ |
42 |
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$ |
240 |
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1 |
All of the Company's derivative instruments are carried at fair value in our consolidated balance sheets after considering the impact of legally enforceable master netting agreements and cash collateral held or placed with the same counterparties, as applicable. Current disclosure requirements mandate that derivatives must also be disclosed without reflecting the impact of master netting agreements and cash collateral. Refer to Note 16 for the net presentation of the Company's derivative instruments. |
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2 |
Refer to Note 16 for additional information related to the estimated fair value. |
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| Derivative instruments, fair value, not designated as hedging instruments |
The following table presents the fair values of the Company's derivative instruments that were not designated as hedging instruments (in millions):
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Fair Value1,2
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Derivatives Not Designated as Hedging Instruments |
Balance Sheet Location1
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December 31,
2011 |
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|
December 31,
2010 |
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Assets: |
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|
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Foreign currency contracts |
Prepaid expenses and other assets |
|
$ |
29 |
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|
$ |
65 |
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Commodity contracts |
Prepaid expenses and other assets |
|
54 |
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|
56 |
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Other derivative instruments |
Prepaid expenses and other assets |
|
5 |
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|
17 |
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Total assets |
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$ |
88 |
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$ |
138 |
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Liabilities: |
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Foreign currency contracts |
Accounts payable and accrued expenses |
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$ |
116 |
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$ |
144 |
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Commodity contracts |
Accounts payable and accrued expenses |
|
47 |
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|
— |
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Other derivative instruments |
Accounts payable and accrued expenses |
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1 |
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— |
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Total liabilities |
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$ |
164 |
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$ |
144 |
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1 |
All of the Company's derivative instruments are carried at fair value in our consolidated balance sheets after considering the impact of legally enforceable master netting agreements and cash collateral held or placed with the same counterparties, as applicable. Current disclosure requirements mandate that derivatives must also be disclosed without reflecting the impact of master netting agreements and cash collateral. Refer to Note 16 for the net presentation of the Company's derivative instruments. |
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2 |
Refer to Note 16 for additional information related to the estimated fair value. |
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| Derivative instruments, pretax impact that changes in the fair value of the derivatives designated as hedges had on AOCI and earnings |
The following table presents the pretax impact that changes in the fair values of derivatives designated as cash flow hedges had on AOCI and earnings during the years ended December 31, 2011, 2010 and 2009 (in millions):
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Gain (Loss)
Recognized
in Other
Comprehensive
Income ("OCI")
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Location of Gain (Loss)
Recognized in Income1
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Gain (Loss)
Reclassified from
AOCI into Income
(Effective Portion)
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Gain (Loss)
Recognized in Income
(Ineffective Portion and
Amount Excluded from
Effectiveness Testing)
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2011 |
|
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Foreign currency contracts |
$ |
3 |
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|
Net operating revenues |
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$ |
(231 |
) |
|
$ |
— |
|
2 |
Interest rate locks |
(11 |
) |
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Interest expense |
|
(12 |
) |
|
(1 |
) |
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Commodity contracts |
(1 |
) |
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Cost of goods sold |
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— |
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— |
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Total |
$ |
(9 |
) |
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$ |
(243 |
) |
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$ |
(1 |
) |
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2010 |
|
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Foreign currency contracts |
$ |
(307 |
) |
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Net operating revenues |
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$ |
(2 |
) |
|
$ |
(2 |
) |
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Interest rate locks |
— |
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|
Interest expense |
|
(15 |
) |
|
— |
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Commodity contracts |
1 |
|
|
Cost of goods sold |
|
— |
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|
— |
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Total |
$ |
(306 |
) |
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$ |
(17 |
) |
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$ |
(2 |
) |
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2009 |
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Foreign currency contracts |
$ |
(59 |
) |
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Net operating revenues |
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$ |
(62 |
) |
|
$ |
— |
|
2 |
Interest rate locks |
— |
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|
Interest expense |
|
(10 |
) |
|
4 |
|
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Commodity contracts |
— |
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|
Cost of goods sold |
|
(47 |
) |
|
— |
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Total |
$ |
(59 |
) |
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$ |
(119 |
) |
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$ |
4 |
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1 |
The Company records gains and losses reclassified from AOCI in income for the effective portion and ineffective portion, if any, to the same line items in our consolidated statements of income. |
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2 |
Includes a de minimis amount of ineffectiveness in the hedging relationship. |
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| Derivative instruments, fair value hedges, gain (loss) recognized in income |
The following table summarizes the pretax impact that changes in the fair values of derivatives designated as fair value hedges had on earnings during the years ended December 31, 2011 and 2010 (in millions):
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Hedging Instruments and Hedged Items |
Location of Gain (Loss)
Recognized in Income
|
Gain (Loss)
Recognized in Income
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2011 |
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Interest rate swaps |
Interest expense |
$ |
343 |
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Fixed-rate debt |
Interest expense |
(333 |
) |
Total |
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$ |
10 |
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2010 |
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Interest rate swaps |
Interest expense |
$ |
(97 |
) |
Fixed-rate debt |
Interest expense |
102 |
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Total |
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$ |
5 |
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| Derivative instruments,fair value of net investment hedges, gain (loss) recognized in AOCI |
The following table presents the pretax impact that changes in the fair values of derivatives designated as net investment hedges had on AOCI during the years ended December 31, 2011 and 2010 (in millions):
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Gain (Loss)
Recognized in OCI
|
Year Ended December 31, |
2011 |
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|
2010 |
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Foreign currency contracts |
$ |
(3 |
) |
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$ |
(15 |
) |
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| Derivative instruments, not designated as hedging instruments, gain (loss) in earnings |
The following table presents the pretax impact that changes in the fair values of derivatives not designated as hedging instruments had on earnings during the years ended December 31, 2011, 2010 and 2009 (in millions):
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Gains (Losses) |
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Derivatives Not Designated
as Hedging Instruments
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Location of Gains (Losses)
Recognized in Income
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Year Ended December 31, |
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2011 |
|
|
2010 |
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2009 |
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Foreign currency contracts |
Net operating revenues |
|
$ |
7 |
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|
$ |
(15 |
) |
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$ |
(16 |
) |
Foreign currency contracts |
Other income (loss) — net |
|
(37 |
) |
|
(46 |
) |
|
114 |
|
Foreign currency contracts |
Cost of goods sold |
|
(12 |
) |
|
(9 |
) |
|
— |
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Commodity contracts |
Cost of goods sold |
|
(42 |
) |
|
40 |
|
|
12 |
|
Commodity contracts |
Selling, general and administrative expenses |
|
(11 |
) |
|
— |
|
|
— |
|
Interest rate swaps |
Interest expense |
|
— |
|
|
(5 |
) |
|
— |
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Interest rate locks |
Interest expense |
|
— |
|
|
(104 |
) |
|
— |
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Other derivative instruments |
Selling, general and administrative expenses |
|
8 |
|
|
21 |
|
|
23 |
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Total |
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|
$ |
(87 |
) |
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$ |
(118 |
) |
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$ |
133 |
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