Annual report pursuant to Section 13 and 15(d)

DERIVATIVES (Tables)

v2.4.0.8
DERIVATIVES (Tables)
12 Months Ended
Dec. 31, 2013
Derivatives  
Gains and losses on interest rate swap
The following table summarizes these gains and losses for the years presented below:
 
 
For the years ended December 31,
In millions
 
2013
 
2012
Income Statement Classification
 
Gain/(Loss) on
Swaps
 
Gain/(Loss) on
Borrowings
 
Gain/(Loss) on
Swaps
 
Gain/(Loss) on
Borrowings
Interest expense
 
$
(39
)
 
$
39

 
$
6

 
$
(6
)
Location and amounts of gains and losses for derivative instruments classified as cash flow hedges
The following table summarizes the effect on our Consolidated Statements of Income for derivative instruments classified as cash flow hedges for the years ended December 31, 2013 and 2012 presented below.  The table does not include amounts related to ineffectiveness as it was not material for the periods presented.
 
 
 
 
For the years ended December 31,
 
 
 
 
Amount of
Gain/(Loss)
Recognized in
AOCL on
Derivative
(Effective Portion)
 
Amount of
Gain/(Loss)
Reclassified from
AOCL into Income
(Effective Portion)
In millions
 
Location of Gain/(Loss)
Reclassified into Income
(Effective Portion)
 
Derivatives in Cash Flow Hedging Relationships
 
2013
 
2012
 
2013
 
2012
Foreign currency forward contracts
 
Net sales
 
$
1

 
$
8

 
$
(2
)
 
$
(2
)
Commodity swap contracts
 
Cost of sales
 
(7
)
 
8

 
(1
)
 
(9
)
Total
 
 
 
$
(6
)
 
$
16

 
$
(3
)
 
$
(11
)
Location and amounts of gains and losses for derivative instruments that are not classified as hedges
The following table summarizes the effect on our Consolidated Statements of Income for derivative instruments that are not classified as hedges for the years ended December 31, 2013 and 2012.
 
 
Location of Gain/(Loss)
Recognized in
Income on Derivatives
 
Amount of Gain/(Loss) Recognized in Income on Derivatives
In millions
For the years ended December 31,
Derivatives Not Designated as Hedging Instruments
2013
 
2012
Foreign currency forward contracts
 
Cost of sales
 
$
(1
)
 
$
(4
)
Foreign currency forward contracts
 
Other income (expense), net
 
3

 
11

Commodity zero-cost collars
 
Cost of sales
 
(2
)
 
1

Location and fair value of derivative instruments
The following tables summarize the location and fair value of derivative instruments on our Consolidated Balance Sheets:
 
 
Derivative Assets
 
 
Fair Value
 
 
In millions
 
December 31,
2013
 
December 31,
2012
 
Balance Sheet Location
Derivatives designated as hedging instruments
 
 
 
 
 
 
Interest rate contract
 
$
49

 
$
88

 
Other assets
Foreign currency forward contracts
 
5

 
2

 
Prepaid expenses and other current assets
Commodity swap contracts
 

 
1

 
Prepaid expenses and other current assets
Total derivatives designated as hedging instruments
 
54

 
91

 
 
Derivatives not designated as hedging instruments
 
 
 
 
 
 
Foreign currency forward contracts
 
6

 
1

 
Prepaid expenses and other current assets
Commodity zero-cost collars
 

 
1

 
Other assets
Total derivatives not designated as hedging instruments
 
6

 
2

 
 
Total derivative assets
 
$
60

 
$
93

 
 

 
 
Derivative Liabilities
 
 
Fair Value
 
 
In millions
 
December 31,
2013
 
December 31,
2012
 
Balance Sheet Location
Derivatives designated as hedging instruments
 
 
 
 
 
 
Commodity swap contracts
 
$
5

 
$
2

 
Other accrued expenses
Total derivatives designated as hedging instruments
 
5

 
2

 
 
Derivatives not designated as hedging instruments
 
 
 
 
 
 
Commodity zero-cost collars
 

 
1

 
Other accrued expenses
Foreign currency forward contracts
 
5

 

 
Other accrued expenses
Total derivatives not designated as hedging instruments
 
5

 
1

 
 
Total derivative liabilities
 
$
10

 
$
3

 
 
Foreign currency forward contracts
 
Derivatives  
Summary of outstanding contracts
 
 
Notional amount in millions
Currency denomination
 
December 31,
2013
 
December 31,
2012
United States Dollar (USD)
 
98

 
110

British Pound Sterling (GBP)
 
170

 
227

Euro (EUR)
 
32

 
28

Singapore Dollar (SGD)
 

 
3

Indian Rupee (INR)
 
3,118

 
1,943

Japanese Yen (JPY)
 
1,357

 
384

Canadian Dollar (CAD)
 
14

 
59

South Korea Won (KRW)
 
21,855

 
35,266

Chinese Renmimbi (CNY)
 
331

 
45

Brazilian Real (BRL)
 
79

 

Commodity swap contracts
 
Derivatives  
Summary of outstanding contracts
The following table summarizes our outstanding commodity swap contracts that were entered into to hedge the cost of certain raw material purchases:
Dollars in millions
 
December 31, 2013
 
 
December 31, 2012
 
Commodity
 
Notional Amount
 
Quantity
 
 
Notional Amount
 
Quantity
 
Copper
 
$

 
(1) 
 
$
24

 
3,025 metric tons
(1) 
Platinum
 
61

 
41,403 troy ounces
(2) 
 
71

 
45,126 troy ounces
(2) 
Palladium
 
16

 
21,790 troy ounces
(2) 
 
10

 
14,855 troy ounces
(2) 
___________________________________________________
(1)A metric ton is a measurement of mass equal to 1,000 kilograms.
(2)A troy ounce is a measurement of mass equal to approximately 31 grams.
Commodity zero cost collars
 
Derivatives  
Summary of outstanding contracts
The following table summarizes our outstanding commodity zero-cost collar contracts that were entered into to hedge the cost of copper purchases:
 
 
December 31,
 
 
2013
 
2012
Average cap
 
$
7,639

 
$
8,196

Average floor
 
6,978

 
7,005

Quantity in metric tons(1)
 
5,421

 
4,100

___________________________________________________
(1) 
A metric ton is a measurement of mass equal to 1,000 kilograms.