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DERIVATIVES (Tables)
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12 Months Ended |
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Dec. 31, 2013
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| Derivatives |
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| Gains and losses on interest rate swap |
The following table summarizes these gains and losses for the years presented below:
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For the years ended December 31, |
In millions |
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2013 |
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2012 |
Income Statement Classification |
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Gain/(Loss) on
Swaps |
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Gain/(Loss) on
Borrowings |
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Gain/(Loss) on
Swaps |
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Gain/(Loss) on
Borrowings |
Interest expense |
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$ |
(39 |
) |
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$ |
39 |
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$ |
6 |
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$ |
(6 |
) |
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| 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.
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For the years ended December 31, |
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Amount of
Gain/(Loss)
Recognized in
AOCL on
Derivative
(Effective Portion)
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Amount of
Gain/(Loss)
Reclassified from
AOCL into Income
(Effective Portion)
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In millions |
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Location of Gain/(Loss)
Reclassified into Income
(Effective Portion)
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Derivatives in Cash Flow Hedging Relationships |
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2013 |
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2012 |
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2013 |
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2012 |
Foreign currency forward contracts |
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Net sales |
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$ |
1 |
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$ |
8 |
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$ |
(2 |
) |
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$ |
(2 |
) |
Commodity swap contracts |
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Cost of sales |
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(7 |
) |
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8 |
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(1 |
) |
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(9 |
) |
Total |
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$ |
(6 |
) |
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$ |
16 |
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$ |
(3 |
) |
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$ |
(11 |
) |
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| 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.
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Location of Gain/(Loss)
Recognized in
Income on Derivatives
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Amount of Gain/(Loss) Recognized in Income on Derivatives |
In millions |
For the years ended December 31, |
Derivatives Not Designated as Hedging Instruments |
2013 |
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2012 |
Foreign currency forward contracts |
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Cost of sales |
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$ |
(1 |
) |
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$ |
(4 |
) |
Foreign currency forward contracts |
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Other income (expense), net |
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3 |
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11 |
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Commodity zero-cost collars |
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Cost of sales |
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(2 |
) |
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1 |
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| Location and fair value of derivative instruments |
The following tables summarize the location and fair value of derivative instruments on our Consolidated Balance Sheets:
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Derivative Assets |
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Fair Value |
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In millions |
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December 31,
2013 |
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December 31,
2012 |
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Balance Sheet Location |
Derivatives designated as hedging instruments |
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Interest rate contract |
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$ |
49 |
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$ |
88 |
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Other assets |
Foreign currency forward contracts |
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5 |
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2 |
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Prepaid expenses and other current assets |
Commodity swap contracts |
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— |
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1 |
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Prepaid expenses and other current assets |
Total derivatives designated as hedging instruments |
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54 |
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91 |
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Derivatives not designated as hedging instruments |
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Foreign currency forward contracts |
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6 |
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1 |
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Prepaid expenses and other current assets |
Commodity zero-cost collars |
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— |
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1 |
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Other assets |
Total derivatives not designated as hedging instruments |
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6 |
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2 |
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Total derivative assets |
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$ |
60 |
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$ |
93 |
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Derivative Liabilities |
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Fair Value |
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In millions |
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December 31,
2013 |
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December 31,
2012 |
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Balance Sheet Location |
Derivatives designated as hedging instruments |
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Commodity swap contracts |
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$ |
5 |
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$ |
2 |
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Other accrued expenses |
Total derivatives designated as hedging instruments |
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5 |
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2 |
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Derivatives not designated as hedging instruments |
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Commodity zero-cost collars |
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— |
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1 |
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Other accrued expenses |
Foreign currency forward contracts |
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5 |
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— |
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Other accrued expenses |
Total derivatives not designated as hedging instruments |
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5 |
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1 |
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Total derivative liabilities |
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$ |
10 |
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$ |
3 |
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Foreign currency forward contracts
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| Derivatives |
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| Summary of outstanding contracts |
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Notional amount in millions |
Currency denomination |
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December 31,
2013 |
|
December 31,
2012 |
United States Dollar (USD) |
|
98 |
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110 |
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British Pound Sterling (GBP) |
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170 |
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227 |
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Euro (EUR) |
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32 |
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28 |
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Singapore Dollar (SGD) |
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— |
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3 |
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Indian Rupee (INR) |
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3,118 |
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1,943 |
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Japanese Yen (JPY) |
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1,357 |
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384 |
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Canadian Dollar (CAD) |
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14 |
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59 |
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South Korea Won (KRW) |
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21,855 |
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35,266 |
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Chinese Renmimbi (CNY) |
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331 |
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45 |
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Brazilian Real (BRL) |
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79 |
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— |
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Commodity swap contracts
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| Derivatives |
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| 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:
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Dollars in millions |
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December 31, 2013 |
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December 31, 2012 |
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Commodity |
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Notional Amount |
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Quantity |
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Notional Amount |
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Quantity |
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Copper |
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$ |
— |
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— |
(1) |
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$ |
24 |
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3,025 metric tons |
(1) |
Platinum |
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61 |
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41,403 troy ounces |
(2) |
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71 |
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45,126 troy ounces |
(2) |
Palladium |
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16 |
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21,790 troy ounces |
(2) |
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10 |
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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.
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Commodity zero cost collars
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| Derivatives |
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| 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:
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December 31, |
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2013 |
|
2012 |
Average cap |
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$ |
7,639 |
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$ |
8,196 |
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Average floor |
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6,978 |
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7,005 |
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Quantity in metric tons(1)
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5,421 |
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4,100 |
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(1) |
A metric ton is a measurement of mass equal to 1,000 kilograms. |
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