Derivatives

6 Months Ended

Jun. 30, 2011

During 2011 and 2010, the Company entered into foreign currency exchange contracts to hedge currency fluctuations related to intercompany loans denominated in non-functional currencies. At June 30, 2011, the Company had recorded (losses) of $(4) million on the foreign currency exchange contracts, which is partially offset by gains related to the translation of loans and accounts denominated in non-functional currencies. Gains (losses) related to these contracts are recorded in the Company’s consolidated statements of income in other income (expense), net. For the six months ended June 30, 2011 and 2010, the Company had recorded gains net of $— million and $5 million, respectively, related to these foreign currency exchange contracts. For the three months ended June 30, 2011 and 2010, the Company had recorded gains net of $4 million and $1 million, respectively, related to these foreign currency exchange contracts.

During 2011 and 2010, the Company, including certain European operations, also entered into foreign currency forward contracts to manage a portion of its exposure to currency fluctuations in the European euro and the U.S. dollar. Based upon period-end market prices, the Company had recorded liabilities of $2 million and $3 million to reflect contract prices at June 30, 2011 and December 31, 2010, respectively. Gains (losses) related to these contracts are recorded in the Company’s consolidated statements of income in other income (expense), net. For the six months ended June 30, 2011 and 2010, the Company had recorded gains (losses) net of $1 million and $(2) million, respectively, related to these foreign currency exchange contracts. For the three months ended June 30, 2011 and 2010, the Company had recorded (losses) net of $(1) million and $(1) million, respectively, related to these foreign currency exchange contracts.

		In the event that the counterparties fail to meet the terms of the foreign currency forward contracts, the Company’s exposure is limited to the aggregate foreign currency rate differential with such institutions.

		During 2011 and 2010, the Company entered into several contracts to manage its exposure to increases in the price of copper and zinc. Based upon period-end market prices, the Company had recorded assets of $6 million and $7 million to reflect contract prices at June 30, 2011 and December 31, 2010, respectively. Gains (losses) related to these contracts are recorded in the Company’s consolidated statements of income in cost of goods sold. For the six months ended June 30, 2011 and 2010, the Company had recorded (losses) net of $(1) million and $(1) million, respectively, related to these commodity contracts. For the three months ended June 30, 2011 and 2010, the Company had recorded (losses) net of $(1) million and $(2) million, respectively, related to these commodity contracts.

		The fair value of these derivative contracts is estimated on a recurring basis, quarterly, using Level 2 inputs (significant other observable inputs).