XML 32 R22.htm IDEA: XBRL DOCUMENT v2.4.0.6
Hedges and Derivative Financial Instruments (Tables)
 6 Months Ended
Jun. 30, 2012
General Discussion of Derivative Instruments and Hedging Activities [Abstract]  
Schedule of Derivative Instruments
The following table summarizes our outstanding derivative contracts and their effects on our Consolidated Balance Sheets at June 30, 2012 and December 31, 2011:
 
 
 
 
Fair Value of
 
Type 
of Hedge (1)
 
 
Millions of dollars
 
Notional Amount
 
Hedge Assets
 
Hedge Liabilities
 
Maximum Term (Months)
 
 
2012
 
2011
 
2012
 
2011
 
2012
 
2011
 
 
 
2012
 
2011
Derivatives accounted for as hedges
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Foreign exchange forwards/options
 
$
929

 
$
862

 
$
18

 
$
24

 
$
17

 
$
19

 
(CF/FV)
 
18
 
18
Commodity swaps/options
 
330

 
316

 
6

 
9

 
28

 
28

 
(CF/FV)
 
31
 
36
Interest rate derivatives
 
—

 
250

 
—

 
—

 
—

 
5

 
(CF)
 
—
 
6
Total derivatives accounted for as hedges
 
 
 
$
24

 
$
33

 
$
45

 
$
52

 
 
 
 
 
 
Derivatives not accounted for as hedges
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Foreign exchange forwards/options
 
$
1,582

 
$
1,261

 
$
10

 
$
6

 
$
44

 
$
43

 
 
 
14
 
3
Commodity swaps/options
 
5

 
3

 
—

 
—

 
—

 
1

 
 
 
6
 
11
Total derivatives not accounted for as hedges
 
 
 
10

 
6

 
44

 
44

 
 
 
 
 
 
Total derivatives
 
 
 
 
 
$
34

 
$
39

 
$
89

 
$
96

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Current
 
 
 
 
 
$
33

 
$
36

 
$
81

 
$
91

 
 
 
 
 
 
Noncurrent
 
 
 
 
 
1

 
3

 
8

 
5

 
 
 
 
 
 
Total derivatives
 
 
 
 
 
$
34

 
$
39

 
$
89

 
$
96

 
 
 
 
 
 

(1)
Derivatives accounted for as hedges are either considered cash flow (CF) or fair value (FV) hedges.
Schedule of Effects of Derivative Instruments on Consolidated Statements of Income
The following tables summarize the effects of derivative instruments on our Consolidated Statements of Comprehensive Income for the three and six months ended are as follows:
 
 
Three Months Ended June 30,
 
 
Cash Flow Hedges - Millions of dollars
 
Gain (Loss)
Recognized in OCI
(Effective Portion) (1)
 
Gain (Loss)
Reclassified from
OCI into Earnings
(Effective Portion) (2)
 
 
 
 
2012
 
2011
 
2012
 
2011
 
 
Foreign exchange forwards/options
 
$
(1
)
 
$
(5
)
 
$
(6
)
 
$
(5
)
 
(a)(b)
Commodity swaps/options
 
(30
)
 
(12
)
 
(2
)
 
47

 
(b)
Interest rate derivatives
 
(13
)
 
—

 
—

 
—

 
(a)
 
 
$
(44
)
 
$
(17
)
 
$
(8
)
 
$
42

 
 
 
 
 
 
Three Months Ended June 30,
 
Fair Value Hedges - Millions of dollars
 
Hedged Item
 
Gain (Loss)
Recognized
on Derivatives (3)
 
Gain (Loss) Recognized
on Related
Hedged Items (3)
 
 
 
 
 
2012
 
2011
 
2012
 
2011
 
Foreign exchange forwards/options
 
Non-functional
currency assets and liabilities
 
$
—

 
$
1

 
$
—

 
$
(1
)
 
 
 
Three Months Ended June 30,
 
Derivatives not Accounted for as Hedges - Millions of dollars
 
Gain (Loss) Recognized on Derivatives not
Accounted for as Hedges (4)
 
 
 
2012
 
2011
 
Foreign exchange forwards/options
 
$
(34
)
 
$
27

 

 
 
Six Months Ended June 30,
 
 
Cash Flow Hedges - Millions of dollars
 
Gain (Loss)
Recognized in OCI
(Effective Portion) (1)
 
Gain (Loss)
Reclassified from
OCI into Earnings
(Effective Portion) (2)
 
 
 
 
2012
 
2011
 
2012
 
2011
 
 
Foreign exchange forwards/options
 
$
(8
)
 
$
(11
)
 
$
(7
)
 
$
(11
)
 
(a)(b)
Commodity swaps/options
 
(10
)
 
4

 
(4
)
 
63

 
(b)
Interest rate derivatives
 
(7
)
 
—

 
—

 
—

 
(c)
 
 
$
(25
)
 
$
(7
)
 
$
(11
)
 
$
52

 
 
 
 
 

Six Months Ended June 30,
 
Fair Value Hedges - Millions of dollars
 
Hedged Item
 
Gain (Loss)
Recognized
on Derivatives (3)
 
Gain (Loss) Recognized
on Related
Hedged Items (3)
 
 
 
 
 
2012
 
2011
 
2012
 
2011
 
Foreign exchange forwards/options
 
Non-functional
currency assets and liabilities
 
$
(1
)
 
$
1

 
$
1

 
$
(1
)
 

 
 
Six Months Ended June 30,
 
Derivatives not Accounted for as Hedges - Millions of dollars
 
Gain (Loss) Recognized on Derivatives not
Accounted for as Hedges (4)
 
 
 
2012
 
2011
 
Foreign exchange forwards/options
 
$
(22
)
 
$
44

 

(1) Gains and losses recognized in OCI are included within total comprehensive income.
(2) Gains and losses reclassified from accumulated OCI and recognized in earnings are recorded in (a) interest and sundry income (expense), (b) cost of products sold or (c) interest expense.
(3) Gains and losses recognized in earnings are recorded in interest and sundry income (expense).
(4) Mark to market gains and losses recognized in earnings are recorded in interest and sundry income (expense).
For cash flow hedges, the amount of ineffectiveness recognized in interest and sundry income (expense) was nominal during 2012 and 2011. The net amount of unrealized gain or loss on derivative instruments included in accumulated OCI related to contracts maturing and expected to be realized during the next twelve months is a loss of $17 million at June 30, 2012.