McDonalds 2010 Annual Report Download - page 35

The following table presents the fair values of derivative instruments included on the Consolidated balance sheet as of December 31,
2010 and 2009:
Asset Derivatives Liability Derivatives
In millions Balance Sheet Classification 2010 2009 Balance Sheet Classification 2010 2009
Derivatives designated as hedging instruments
Foreign currency Prepaid expenses and
other current assets $ 7.5 $ 13.5
Accrued payroll and
other liabilities $(4.6) $(0.1)
Interest rate Prepaid expenses and
other current assets 0.5 1.4
Foreign currency Miscellaneous
other assets 5.4
Interest rate Miscellaneous
other assets 72.1 67.3
Other long-term
liabilities (0.3) (3.4)
Total derivatives designated as hedging instruments $ 80.1 $ 87.6 $(4.9) $(3.5)
Derivatives not designated as hedging instruments
Foreign currency Prepaid expenses and
other current assets $ 6.0 $ 9.3
Accrued payroll and
other liabilities $(3.8) $(5.4)
Equity Prepaid expenses and
other current assets 104.4
Equity Miscellaneous
other assets 79.6
Foreign currency Miscellaneous
other assets 2.7
Other long-term
liabilities (0.5)
Total derivatives not designated as hedging instruments $113.1 $ 88.9 $(3.8) $(5.9)
Total derivatives1$193.2 $176.5 $(8.7) $(9.4)
1 The fair value of derivatives is presented on a gross basis. Accordingly, the 2010 and 2009 total asset and liability fair values do not agree with the values provided in the Fair Value
Measurements note, because that disclosure reflects netting adjustments of $0.3 million and $2.4 million.
The following table presents the pretax amounts affecting income and OCI for the years ended December 31, 2010 and 2009,
respectively:
In millions
Derivatives in
Fair Value
Hedging
Relationships
(Gain) Loss
Recognized in Income
on Derivative
Hedged Items in
Fair Value
Hedging
Relationships
(Gain) Loss
Recognized in Income on
Related Hedged Items
2010 2009 2010 2009
Interest rate $ (7.0) $ 17.3 Fixed-rate debt $ 7.0 $(17.3)
Derivatives in
Cash Flow
Hedging
Relationships
(Gain) Loss
Recognized in Accumulated
OCI on Derivative
(Effective Portion)
(Gain) Loss
Reclassified from
Accumulated OCI into
Income (Effective Portion)
(Gain) Loss
Recognized in Income on
Derivative (Amount Excluded
from Effectiveness Testing and
Ineffective Portion)
2010 2009 2010 2009 2010 2009
Foreign currency $(11.2) $ 3.4 $(13.4) $(48.3) $ 25.1 $ 27.0
Interest rate(1) (2.1) (0.9) (2.1) (0.3)
Total $(11.2) $ 1.3 $(14.3) $(50.4) $ 24.8 $ 27.0
Net Investment
Hedging Relationships
(Gain) Loss
Recognized in Accumulated
OCI on Derivative
(Effective Portion)
Derivatives Not
Designated as
Hedging
Instruments
(Gain) Loss
Recognized in Income on
Derivative
2010 2009 2010 2009
Foreign currency denominated debt $144.3 $51.3 Foreign currency $(16.4) $(12.2)
Foreign currency derivatives 4.3 Equity(2) (18.8) (2.4)
Total $148.6 $51.3 Total $(35.2) $(14.6)
(Gains) losses recognized in income on derivatives are recorded in nonoperating (income) expense unless otherwise noted.
(1) The amount of (gain) loss reclassified from accumulated OCI into income is recorded in interest expense.
(2) The amount of (gain) loss recognized in income on the derivatives used to hedge the supplemental benefit plan liabilities is recorded in selling, general & administrative expenses.
McDonald’s Corporation Annual Report 2010 33