Microsoft 2013 Annual Report Download - page 59

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Fair Value Hedge Gains (Losses)
We recognized in other income (expense) the following gains (losses) on contracts designated as fair value hedges and
their related hedged items:
(In millions)
Year Ended June 30,
2013
2012
2011
Foreign Exchange Contracts
Derivatives
$ 70
$
52
$ (92)
Hedged items
(69)
(50)
85
Total
$ 1
$ 2
$ (7)
Cash Flow Hedge Gains (Losses)
We recognized the following gains (losses) on foreign exchange contracts designated as cash flow hedges (our only cash
flow hedges during the periods presented):
(In millions)
Year Ended June 30,
2013
2012
2011
Effective Portion
Gains (losses) recognized in OCI, net of tax effects of $54, $127 and $(340)
$ 101
$ 236
$ (632)
Gains (losses) reclassified from AOCI into revenue
$ 195
$ (27)
$ (7)
Amount Excluded from Effectiveness Assessment and Ineffective Portion
Losses recognized in other income (expense)
$ (168)
$ (231)
$ (276)
We estimate that $95 million of net derivative gains included in AOCI at June 30, 2013 will be reclassified into earnings
within the following 12 months. No significant amounts of gains (losses) were reclassified from AOCI into earnings as a
result of forecasted transactions that failed to occur during fiscal year 2013.
Non-Designated Derivative Gains (Losses)
Gains (losses) from changes in fair values of derivatives that are not designated as hedges are primarily recognized in
other income (expense). These amounts are shown in the table below, with the exception of gains (losses) on derivatives
presented in income statement line items other than other income (expense), which were immaterial for the periods
presented. Other than those derivatives entered into for investment purposes, such as commodity contracts, the gains
(losses) below are generally economically offset by unrealized gains (losses) in the underlying available-for-sale
securities.
(In millions)
Year Ended June 30,
2013
2012
2011
Foreign exchange contracts
$ 18
$ (119)
$ (27)
Equity contracts
16
(85)
35
Interest-rate contracts
(11)
93
19
Credit contracts
(3)
(7)
24
Commodity contracts
(42)
(121)
148
Total
$ (22)
$ (239)
$ 199