Kodak 2011 Annual Report Download - page 88

The location and amounts of gains and losses related to derivatives reported in the Consolidated Statement of Operations are shown in the following
tables:
Foreign currency forward contracts
Certain of the Company’s foreign currency forward contracts used to mitigate currency risk related to existing foreign currency denominated assets
and liabilities are not designated as hedges, and are marked to market through net (loss) earnings at the same time that the exposed assets and
liabilities are remeasured through net (loss) earnings (both in Other income (charges), net). The notional amount of such contracts open at December
31, 2011 was approximately $945 million. The majority of the contracts of this type held by the Company are denominated in euros and British
pounds.
Silver forward contracts
The Company enters into silver forward contracts that are designated as cash flow hedges of commodity price risk related to forecasted purchases of
silver. The value of the notional amounts of such contracts open at December 31, 2011 was $23 million. Hedge gains and losses related to these
silver forward contracts are reclassified into cost of sales as the related silver-containing products are sold to third parties. These gains or losses
transferred to cost of sales are generally offset by increased or decreased costs of silver purchased in the open market. The amount of existing gains
and losses at December 31, 2011 to be reclassified into earnings within the next 12 months is a net loss of $7 million. At December 31, 2011, the
Company had hedges of forecasted purchases through May 2012.
In January 2012, the Company terminated all its existing hedges at a loss of $5 million. These hedges were designated as secured agreements under the
Revolving Credit Facility and needed to be settled prior to the termination of that facility in conjunction with the Company’s DIP Credit Agreement. Since
the hedged transactions are still expected to occur in the originally specified time frame, this loss will remain in Accumulated other comprehensive loss
until the related silver-containing products are sold to third parties.
Derivatives in
Cash Flow
Hedging
Relationships Gain (Loss) Recognized in OCI on Derivative (Effective Portion)
Gain (Loss) Reclassified from
Accumulated OCI Into Cost of Sales
(Effective Portion)
Gain (Loss) Recognized in Income on
Derivative (Ineffective Portion and
Amount Excluded from Effectiveness
Testing)
(in millions)
For the Year Ended
December 31,
For the Year Ended
December 31,
For the Year Ended
December 31,
2011 2010 2009 2011 2010 2009 2011 2010 2009
Commodity
contracts
$
5
$
6
$
12
$
14
$
10
$
7
$
-
$
-
$
-
Foreign
exchange
contracts
-
(2
)
-
-
(2
)
(2
)
-
-
-
Derivatives Not Designated as Hedging Instruments
Location of Gain or (Loss) Recognized in
Income on Derivative
Gain (Loss) Recognized in Income on
Derivative
(in millions)
For the Year Ended
December 31,
2011
2010
2009
Foreign exchange contracts
Other income (charges), net
$
11
$
32
$
29
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