Coca Cola 2007 Annual Report Download - page 96

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THE COCA-COLA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 12: HEDGING TRANSACTIONS AND DERIVATIVE FINANCIAL INSTRUMENTS (Continued)
The following table presents the carrying values, fair values and maturities of the Company’s foreign currency
derivative instruments outstanding as of December 31, 2007 and 2006 (in millions):
Carrying Values
Assets/(Liabilities) Fair Values
Assets/(Liabilities) Maturity
2007
Forward contracts $ (58) $ (58) 2008-2009
Options and collars 46 46 2008
$ (12) $ (12)
Carrying Values
Assets/(Liabilities) Fair Values
Assets/(Liabilities) Maturity
2006
Forward contracts $ (21) $ (21) 2007-2008
Options and collars 18 18 2007
$ (3) $ (3)
The Company estimates the fair value of its foreign currency derivatives based on quoted market prices or pricing
models using current market rates. These amounts are primarily reflected in prepaid expenses and other assets and
accounts payable and accrued expenses in our consolidated balance sheets. As of December 31, 2007, we had $23
million reflected in prepaid expenses and other assets and $35 million reflected in accounts payable and accrued
expenses.
Summary of AOCI
For the years ended December 31, 2007, 2006 and 2005, we recorded a net gain (loss) to AOCI of approximately
$(59) million, $(31) million and $55 million, respectively, net of both income taxes and reclassifications to earnings,
primarily related to gains and losses on foreign currency cash flow hedges. These items will generally offset cash flow
gains and losses relating to the underlying exposures being hedged in future periods. The Company estimates that it
will reclassify into earnings during the next 12 months losses of approximately $46 million from the after-tax amount
recorded in AOCI as of December 31, 2007, as the anticipated cash flows occur.
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