Coca Cola 2008 Annual Report Download - page 107

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THE COCA-COLA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 11: HEDGING TRANSACTIONS AND DERIVATIVE FINANCIAL INSTRUMENTS (Continued)
Carrying Values Fair Values
Assets/(Liabilities) Assets/(Liabilities) Maturity
2007
Foreign currency forward contracts $ (58) $ (58) 2008-2009
Foreign currency options and collars 46 46 2008
Interest rate locks — — N/A
Commodity futures 1 1 2008
Other derivative instruments 28 28 2008
$17 $17
The Company estimates the fair values of its derivatives based on quoted market prices or pricing models
using current market rates, and records them as prepaid expenses and other assets or accounts payable and
accrued expenses in our consolidated balance sheets. The amounts recorded reflect the effect of legally
enforceable master netting agreements that allow the Company to settle positive and negative positions and cash
collateral held or placed with the same counterparties. As of December 31, 2008, we had approximately
$5 million reflected in prepaid expenses and other assets and $211 million reflected in accounts payable and
accrued expenses. Refer to Note 12.
Summary of AOCI
For the years ended December 31, 2008, 2007 and 2006, we recorded a net gain (loss) to AOCI of
approximately $(6) million, $(59) million and $(31) 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 the variability of the cash flows 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 $31 million from the after-tax amount recorded in AOCI as of December 31, 2008, as the
anticipated cash flows occur.
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