2.2.0.7 false DERIVATIVE FINANCIAL INSTRUMENTS 10601 - Disclosure - DERIVATIVE FINANCIAL INSTRUMENTS true false false false 1 USD false false Unit12 Standard http://www.xbrl.org/2003/iso4217 USD iso4217 0 Unit13 Standard http://www.xbrl.org/2003/instance pure xbrli 0 Unit1 Standard http://www.xbrl.org/2003/instance shares xbrli 0 Unit14 Divide http://www.xbrl.org/2003/iso4217 USD iso4217 http://www.xbrl.org/2003/instance shares xbrli 0 $ 2 DERIVATIVE FINANCIAL INSTRUMENTS 0 us-gaap_SummaryOfDerivativeInstrumentsAbstract us-gaap true na duration No definition available. false false false false false true false false false false false false 1 false false false false 0 0 false false false xbrli:stringItemType string No definition available. false 3 DERIVATIVE FINANCIAL INSTRUMENTS 1 us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureTextBlock us-gaap true na duration No definition available. false false false false false false false false false false false terselabel false 1 false false false false 0 0 <div> <div> NOTE 6: DERIVATIVE FINANCIAL INSTRUMENTS Our business operations give rise to certain market risk exposures mostly due to changes in commodity prices, foreign currency exchange rates and interest rates. We manage a portion of these risks through the use of derivative financial instruments, primarily futures and options, to reduce our exposure to commodity price risk, foreign currency risk and interest rate risk. Forward contracts on various commodities, including grains, livestock and energy, are primarily entered into to manage the price risk associated with forecasted purchases of these inputs used in our production processes. Foreign exchange forward contracts are entered into to manage the fluctuations in foreign currency exchange rates, primarily as a result of certain receivable and payable balances. We also periodically utilize interest rate swaps to manage interest rate risk associated with our variable-rate borrowings. Our risk management programs are periodically reviewed by our Board of Directors' Audit Committee. These programs are monitored by senior management and may be revised as market conditions dictate. Our current risk management programs utilize industry-standard models that take into account the implicit cost of hedging. Risks associated with our market risks and those created by derivative instruments and the fair values are strictly monitored at all times, using Value-at-Risk and stress tests. Credit risks associated with our derivative contracts are not significant as we minimize counterparty concentrations, utilize margin accounts or letters of credit, and deal with credit-worthy counterparties. Additionally, our derivative contracts are mostly short-term in duration and we generally do not make use of credit-risk-related contingent features. No significant concentrations of credit risk existed at October 2, 2010. We recognize all derivative instruments as either assets or liabilities at fair value in the Consolidated Balance Sheets, with the exception of normal purchases and normal sales expected to result in physical delivery. The accounting for changes in the fair value (i.e., gains or losses) of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and the type of hedging relationship. For those derivative instruments that are designated and qualify as hedging instruments, we designate the hedging instrument based upon the exposure being hedged (i.e., fair value hedge, cash flow hedge, or hedge of a net investment in a foreign operation). We qualify, or designate, a derivative financial instrument as a hedge when contract terms closely mirror those of the hedged item, providing a high degree of risk reduction and correlation. If a derivative instrument is accounted for as a hedge, depending on the nature of the hedge, changes in the fair value of the instrument either will be offset against the change in fair value of the hedged assets, liabilities or firm commitments through earnings, or be recognized in other comprehensive income (loss) (OCI) until the hedged item is recognized in earnings. The ineffective portion of an instrument's change in fair value is recognized in earnings immediately. We designate certain forward contracts as follows:   <table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr><td width="3%"> </td> <td valign="top" width="3%" align="left">—</td> <td valign="top" align="left">Cash Flow Hedges – include certain commodity forward and option contracts of forecasted purchases (i.e., grains) and certain foreign exchange forward contracts. </td></tr></table> <table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr><td width="3%"> </td> <td valign="top" width="3%" align="left">—</td> <td valign="top" align="left">Fair Value Hedges – include certain commodity forward contracts of forecasted purchases (i.e., livestock). </td></tr></table> <table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr><td width="3%"> </td> <td valign="top" width="3%" align="left">—</td> <td valign="top" align="left">Net Investment Hedges – include certain foreign currency forward contracts of permanently invested capital in certain foreign subsidiaries. </td></tr></table>   Cash flow hedges Derivative instruments, such as futures and options, are designated as hedges against changes in the amount of future cash flows related to procurement of certain commodities utilized in our production processes. We do not purchase forward and option commodity contracts in excess of our physical consumption requirements and generally do not hedge forecasted transactions beyond 18 months. The objective of these hedges is to reduce the variability of cash flows associated with the forecasted purchase of those commodities. For the derivative instruments we designate and qualify as a cash flow hedge, the effective portion of the gain or loss on the derivative is reported as a component of OCI and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. Gains and losses representing hedge ineffectiveness are recognized in earnings in the current period. Ineffectiveness related to our cash flow hedges was not significant during fiscal 2010, 2009 and 2008. We had the following aggregated notionals of outstanding forward and option contracts accounted for as cash flow hedges:   <table border="0" cellspacing="0" cellpadding="0" width="76%"> <tr><td width="54%"> </td> <td valign="bottom" width="7%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="7%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="7%"> </td> <td> </td> <td> </td> <td> </td></tr> <tr><td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom">  </td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom">  </td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom" colspan="2" align="right">Metric</td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom"> </td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom">  </td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom" colspan="2" align="right">October 2, 2010</td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom"> </td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom">  </td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom" colspan="2" align="right">October 3, 2009  </td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom"> </td></tr> <tr><td valign="top">   Commodity:</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td></tr> <tr><td valign="top">    Corn</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">Bushels</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">16 million</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">4 million  </td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr bgcolor="#c3f9f5"><td style="border-bottom: #000000 1px solid;" valign="top">    Soy meal</td> <td style="border-bottom: #000000 1px solid;" valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom"> </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" align="right">Tons</td> <td style="border-bottom: #000000 1px solid;" valign="bottom" nowrap="nowrap">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom"> </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" align="right">101,500</td> <td style="border-bottom: #000000 1px solid;" valign="bottom" nowrap="nowrap">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom"> </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" align="right">16,900  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" nowrap="nowrap">  </td></tr></table> The net amount of pretax gains in accumulated OCI as of October 2, 2010, expected to be reclassified into earnings within the next 12 months was $10 million. During fiscal 2010, 2009 and 2008, we did not reclassify significant pretax gains/losses into earnings as a result of the discontinuance of cash flow hedges due to the probability the original forecasted transaction would not occur by the end of the originally specified time period or within the additional period of time allowed by generally accepted accounting principles. The following table sets forth the pretax impact of cash flow hedge derivative instruments on the Consolidated Statements of Income (in millions):   <table border="0" cellspacing="0" cellpadding="0" width="95%"> <tr><td width="47%"> </td> <td valign="bottom" width="2%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="2%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="2%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="2%"> </td> <td width="18%"> </td> <td valign="bottom" width="2%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="2%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="2%"> </td> <td> </td> <td> </td> <td> </td></tr> <tr><td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom" colspan="10" align="right"> Gain/(Loss)     Recognized in OCI     on Derivatives    </td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom" align="right"> Consolidated     Statements of Income     Classification    </td> <td valign="bottom">  </td> <td valign="bottom" colspan="10" align="right"> Gain/(Loss)   Reclassified from   OCI to Earnings  </td> <td valign="bottom"> </td></tr> <tr><td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom">  </td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom">  </td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom" colspan="2" align="right">2010  </td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom"> </td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom">  </td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom" colspan="2" align="right">2009  </td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom"> </td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom">  </td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom" colspan="2" align="right">2008    </td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom"> </td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom">  </td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom">  </td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom">  </td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom" colspan="2" align="right">2010  </td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom"> </td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom">  </td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom" colspan="2" align="right">2009  </td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom"> </td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom">  </td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom" colspan="2" align="right">2008  </td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom"> </td></tr> <tr><td valign="top">   Cash Flow Hedge – Derivatives designated   as hedging instruments:</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td></tr> <tr><td valign="top">   Commodity contracts</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">$6  </td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">$(61)  </td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">$39    </td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom" align="right">Cost of Sales    </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">$(6)  </td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">$(67)  </td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">$42  </td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr bgcolor="#c3f9f5"><td valign="top">   Foreign exchange contracts</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1  </td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">8  </td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(2)    </td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom" align="right">Other Income/Expense    </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1  </td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">6  </td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">0  </td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr><td style="border-bottom: #000000 2px solid; border-top: #000000 1px solid;" valign="top">   Total</td> <td style="border-bottom: #000000 2px solid; border-top: #000000 1px solid;" valign="bottom">  </td> <td style="border-bottom: #000000 2px solid; border-top: #000000 1px solid;" valign="bottom"> </td> <td style="border-bottom: #000000 2px solid; border-top: #000000 1px solid;" valign="bottom" align="right">$7  </td> <td style="border-bottom: #000000 2px solid; border-top: #000000 1px solid;" valign="bottom" nowrap="nowrap">  </td> <td style="border-bottom: #000000 2px solid; border-top: #000000 1px solid;" valign="bottom">  </td> <td style="border-bottom: #000000 2px solid; border-top: #000000 1px solid;" valign="bottom"> </td> <td style="border-bottom: #000000 2px solid; border-top: #000000 1px solid;" valign="bottom" align="right">$(53)  </td> <td style="border-bottom: #000000 2px solid; border-top: #000000 1px solid;" valign="bottom" nowrap="nowrap">  </td> <td style="border-bottom: #000000 2px solid; border-top: #000000 1px solid;" valign="bottom">  </td> <td style="border-bottom: #000000 2px solid; border-top: #000000 1px solid;" valign="bottom"> </td> <td style="border-bottom: #000000 2px solid; border-top: #000000 1px solid;" valign="bottom" align="right">$37    </td> <td style="border-bottom: #000000 2px solid; border-top: #000000 1px solid;" valign="bottom" nowrap="nowrap">  </td> <td style="border-bottom: #000000 2px solid; border-top: #000000 1px solid;" valign="bottom">  </td> <td style="border-bottom: #000000 2px solid; border-top: #000000 1px solid;" valign="bottom"> </td> <td style="border-bottom: #000000 2px solid; border-top: #000000 1px solid;" valign="bottom">  </td> <td style="border-bottom: #000000 2px solid; border-top: #000000 1px solid;" valign="bottom"> </td> <td style="border-bottom: #000000 2px solid; border-top: #000000 1px solid;" valign="bottom" align="right">$(5)  </td> <td style="border-bottom: #000000 2px solid; border-top: #000000 1px solid;" valign="bottom" nowrap="nowrap">  </td> <td style="border-bottom: #000000 2px solid; border-top: #000000 1px solid;" valign="bottom">  </td> <td style="border-bottom: #000000 2px solid; border-top: #000000 1px solid;" valign="bottom"> </td> <td style="border-bottom: #000000 2px solid; border-top: #000000 1px solid;" valign="bottom" align="right">$(61)  </td> <td style="border-bottom: #000000 2px solid; border-top: #000000 1px solid;" valign="bottom" nowrap="nowrap">  </td> <td style="border-bottom: #000000 2px solid; border-top: #000000 1px solid;" valign="bottom">  </td> <td style="border-bottom: #000000 2px solid; border-top: #000000 1px solid;" valign="bottom"> </td> <td style="border-bottom: #000000 2px solid; border-top: #000000 1px solid;" valign="bottom" align="right">$42  </td> <td style="border-bottom: #000000 2px solid; border-top: #000000 1px solid;" valign="bottom" nowrap="nowrap">  </td></tr></table> Fair value hedges We designate certain futures contracts as fair value hedges of firm commitments to purchase livestock for slaughter. Our objective of these hedges is to minimize the risk of changes in fair value created by fluctuations in commodity prices associated with fixed price livestock firm commitments. We had the following aggregated notionals of outstanding forward contracts entered into to hedge forecasted commodity purchases which are accounted for as a fair value hedge:   <table border="0" cellspacing="0" cellpadding="0" width="76%"> <tr><td width="48%"> </td> <td valign="bottom" width="6%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="6%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="6%"> </td> <td> </td> <td> </td> <td> </td></tr> <tr><td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom">  </td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom">  </td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom" colspan="2" align="right">Metric    </td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom"> </td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom">  </td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom" colspan="2" align="right">October 2, 2010    </td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom"> </td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom">  </td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom" colspan="2" align="right">October 3, 2009  </td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom"> </td></tr> <tr><td valign="top">   Commodity:</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td></tr> <tr><td valign="top">   Live Cattle</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">Pounds    </td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">361 million    </td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">133 million  </td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr bgcolor="#c3f9f5"><td style="border-bottom: #000000 1px solid;" valign="top">   Lean Hogs</td> <td style="border-bottom: #000000 1px solid;" valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom"> </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" align="right">Pounds    </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" nowrap="nowrap">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom"> </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" align="right">508 million    </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" nowrap="nowrap">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom"> </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" align="right">171 million  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" nowrap="nowrap">  </td></tr></table>   For these derivative instruments we designate and qualify as a fair value hedge, the gain or loss on the derivative, as well as the offsetting gain or loss on the hedged item attributable to the hedged risk, are recognized in earnings in the current period. We include the gain or loss on the hedged items (i.e., livestock purchase firm commitments) in the same line item, Cost of Sales, as the offsetting gain or loss on the related livestock forward position.   <table border="0" cellspacing="0" cellpadding="0" width="76%"> <tr><td width="46%"> </td> <td valign="bottom" width="3%"> </td> <td width="20%"> </td> <td valign="bottom" width="5%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="3%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="3%"> </td> <td> </td> <td> </td> <td> </td></tr> <tr><td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom">    </td> <td valign="bottom" colspan="10" align="right">in millions</td> <td valign="bottom"> </td></tr> <tr><td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom">  </td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom">  </td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom" align="right">Consolidated Statements of Income Classification</td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom">    </td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom" colspan="2" align="right">2010  </td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom"> </td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom">  </td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom" colspan="2" align="right">2009  </td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom"> </td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom">  </td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom" colspan="2" align="right">2008</td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom"> </td></tr> <tr><td valign="top">   Gain/(Loss) on forwards</td> <td valign="bottom">  </td> <td valign="bottom" align="right">Cost of Sales</td> <td valign="bottom">    </td> <td valign="bottom"> </td> <td valign="bottom" align="right">        $(58)  </td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">$152  </td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">$65</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr bgcolor="#c3f9f5"><td style="border-bottom: #000000 1px solid;" valign="top">   Gain/(Loss) on purchase contract</td> <td style="border-bottom: #000000 1px solid;" valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" align="right">Cost of Sales</td> <td style="border-bottom: #000000 1px solid;" valign="bottom">    </td> <td style="border-bottom: #000000 1px solid;" valign="bottom"> </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" align="right">58  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" nowrap="nowrap">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom"> </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" align="right">(152)  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" nowrap="nowrap">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom"> </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" align="right">(65)</td> <td style="border-bottom: #000000 1px solid;" valign="bottom" nowrap="nowrap">  </td></tr></table> Ineffectiveness related to our fair value hedges was not significant during fiscal 2010, 2009 and 2008. Foreign net investment hedges We utilize forward foreign exchange contracts to protect the value of our net investments in certain foreign subsidiaries. For derivative instruments that are designated and qualify as a hedge of a net investment in a foreign currency, the gain or loss is reported in OCI as part of the cumulative translation adjustment to the extent it is effective, with the related amounts due to or from counterparties included in other liabilities or other assets. We utilize the forward-rate method of assessing hedge effectiveness. Any ineffective portions of net investment hedges are recognized in the Consolidated Statements of Income during the period of change. Ineffectiveness related to our foreign net investment hedges was not significant during fiscal 2010, 2009 and 2008. At October 2, 2010 and October 3, 2009, we had approximately $49 million and $0 aggregate outstanding notionals related to our forward foreign currency contracts accounted for as foreign net investment hedges. The following table sets forth the pretax impact of these derivative instruments on the Consolidated Statements of Income (in millions):   <table border="0" cellspacing="0" cellpadding="0" width="100%" align="center"> <tr><td width="51%"> </td> <td valign="bottom" width="2%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="2%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="2%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="2%"> </td> <td width="17%"> </td> <td valign="bottom" width="2%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="2%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="2%"> </td> <td> </td> <td> </td> <td> </td></tr> <tr><td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom" colspan="10" align="right"> Gain/(Loss)     Recognized in OCI      on Derivatives    </td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom" align="right"> Consolidated   Statements of Income   Classification  </td> <td valign="bottom">  </td> <td valign="bottom" colspan="10" align="right">Gain/(Loss) Reclassified from OCI to Earnings</td> <td valign="bottom"> </td></tr> <tr><td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom">  </td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom">  </td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom" colspan="2" align="right">2010  </td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom"> </td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom">  </td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom" colspan="2" align="right">2009  </td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom"> </td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom">  </td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom" colspan="2" align="right">2008    </td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom"> </td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom">  </td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom">  </td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom">  </td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom" colspan="2" align="right">2010  </td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom"> </td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom">  </td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom" colspan="2" align="right">2009  </td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom"> </td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom">  </td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom" colspan="2" align="right">2008</td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom"> </td></tr> <tr><td valign="top">   Net Investment Hedge – Derivatives designated as   hedging instruments:</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td></tr> <tr><td style="border-bottom: #000000 1px solid;" valign="top">    Foreign exchange contracts</td> <td style="border-bottom: #000000 1px solid;" valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom"> </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" align="right">$(1)  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" nowrap="nowrap">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom"> </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" align="right">$(5)  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" nowrap="nowrap">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom"> </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" align="right">$0    </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" nowrap="nowrap">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" align="right">Other Income/Expense  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom"> </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" align="right">$0  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" nowrap="nowrap">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom"> </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" align="right">$(2)  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" nowrap="nowrap">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom"> </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" align="right">$0</td> <td style="border-bottom: #000000 1px solid;" valign="bottom" nowrap="nowrap">  </td></tr></table> Undesignated positions In addition to our designated positions, we also hold forward and option contracts for which we do not apply hedge accounting. These include certain derivative instruments related to commodities price risk, including grains, livestock and energy, foreign currency risk and interest rate risk. We mark these positions to fair value through earnings at each reporting date. We generally do not enter into undesignated positions beyond 18 months. The objective of our undesignated grains, energy and livestock commodity positions is to reduce the variability of cash flows associated with the forecasted purchase of certain grains, energy and livestock inputs to our production processes. We also enter into certain forward sales of boxed beef and boxed pork and forward purchases of cattle and hogs at fixed prices. The fixed price sales contracts lock in the proceeds from a sale in the future and the fixed cattle and hog purchases lock in the cost. However, the cost of the livestock and the related boxed beef and boxed pork market prices at the time of the sale or purchase could vary from this fixed price. As we enter into fixed forward sales of boxed beef and boxed pork and forward purchases of cattle and hogs, we also enter into the appropriate number of livestock futures positions to mitigate a portion of this risk. Changes in market value of the open livestock futures positions are marked to market and reported in earnings at each reporting date, even though the economic impact of our fixed prices being above or below the market price is only realized at the time of sale or purchase. These positions generally do not qualify for hedge treatment due to location basis differences between the commodity exchanges and the actual locations when we purchase the commodities. We have a foreign currency cash flow hedging program to hedge portions of forecasted transactions denominated in foreign currencies, primarily with forward contracts, to protect against the reduction in value of forecasted foreign currency cash flows. Our undesignated foreign currency positions generally would qualify for cash flow hedge accounting. However, to reduce earnings volatility, we normally will not elect hedge accounting treatment when the position provides an offset to the underlying related transaction that currently impacts earnings.   The objective of our undesignated interest rate swap is to manage interest rate risk exposure on a floating-rate bond. Our interest rate swap agreement effectively modifies our exposure to interest rate risk by converting a portion of the floating-rate bond to a fixed rate basis for the first five years, thus reducing the impact of the interest-rate changes on future interest expense. This interest rate swap does not qualify for hedge treatment due to differences in the underlying bond and swap contract interest-rate indices. We had the following aggregate outstanding notionals related to our undesignated positions:   <table border="0" cellspacing="0" cellpadding="0" width="100%" align="center"> <tr><td width="35%"> </td> <td valign="bottom" width="8%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="8%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="8%"> </td> <td> </td> <td> </td> <td> </td></tr> <tr><td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom">  </td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom">  </td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom" colspan="2" align="right">Metric</td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom"> </td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom">  </td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom" colspan="2" align="right">                 October 2, 2010</td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom"> </td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom">  </td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom" colspan="2" align="right">                 October 3, 2009</td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom"> </td></tr> <tr><td valign="top">   Commodity:</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td></tr> <tr><td valign="top">   Corn</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">Bushels</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">38 million</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">11 million</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr bgcolor="#c3f9f5"><td valign="top">   Soy meal</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">Tons</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">367,000</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">73,000</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr><td valign="top">   Live Cattle</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">Pounds</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">73 million</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">82 million</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr bgcolor="#c3f9f5"><td valign="top">   Lean Hogs</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">Pounds</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">134 million</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">11 million</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr><td valign="top">   Natural Gas</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">British thermal units</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">450 billion</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">850 billion</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr bgcolor="#c3f9f5"><td valign="top">   Foreign Currency</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">United States dollars</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">$146 million</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">$124 million</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr><td style="border-bottom: #000000 1px solid;" valign="top">   Interest Rate</td> <td style="border-bottom: #000000 1px solid;" valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom"> </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" align="right">Average monthly notional debt</td> <td style="border-bottom: #000000 1px solid;" valign="bottom" nowrap="nowrap">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom"> </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" align="right">$53 million</td> <td style="border-bottom: #000000 1px solid;" valign="bottom" nowrap="nowrap">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom"> </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" align="right">$64 million</td> <td style="border-bottom: #000000 1px solid;" valign="bottom" nowrap="nowrap">  </td></tr></table> Included in our undesignated positions are certain commodity grain positions (which do not qualify for hedge treatment) we enter into to manage the risk of costs associated with forward sales to certain customers for which sales prices are determined under cost-plus arrangements. These unrealized positions totaled gains of $2 million and losses of $17 million at October 2, 2010, and October 3, 2009, respectively. When these positions are liquidated, we expect any realized gains or losses will be reflected in the prices of the poultry products sold. Since these derivative positions did not qualify for hedge treatment, they initially created volatility in our earnings associated with changes in fair value. However, once the positions were liquidated and included in the sales price to the customer, there was ultimately no earnings impact as any previous fair value gains or losses were included in the prices of the poultry products. The following table sets forth the pretax impact of the undesignated derivative instruments on the Consolidated Statements of Income (in millions):   <table border="0" cellspacing="0" cellpadding="0" width="92%"> <tr><td width="54%"> </td> <td valign="bottom" width="2%"> </td> <td width="24%"> </td> <td valign="bottom" width="2%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="2%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="2%"> </td> <td> </td> <td> </td> <td> </td></tr> <tr><td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom" align="right"> Consolidated             Statements of Income             Classification            </td> <td valign="bottom">  </td> <td valign="bottom" colspan="10" align="right"> Gain/(Loss) Recognized in Earnings</td> <td valign="bottom"> </td></tr> <tr><td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom">  </td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom">  </td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom">  </td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom">  </td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom" colspan="2" align="right">2010  </td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom"> </td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom">  </td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom" colspan="2" align="right">2009  </td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom"> </td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom">  </td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom" colspan="2" align="right">2008</td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom"> </td></tr> <tr><td valign="top">   Derivatives not designated   as hedging instruments:</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td></tr> <tr bgcolor="#c3f9f5"><td valign="top">    Commodity contracts</td> <td valign="bottom">  </td> <td valign="bottom" align="right">Sales            </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">$27  </td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">$(34)  </td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">$(12)</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr><td valign="top">    Commodity contracts</td> <td valign="bottom">  </td> <td valign="bottom" align="right">Cost of Sales            </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(20)  </td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(151)  </td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">259</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr bgcolor="#c3f9f5"><td valign="top">    Foreign exchange contracts</td> <td valign="bottom">  </td> <td valign="bottom" align="right">Other Income/Expense            </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(5)  </td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">0  </td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr><td valign="top">    Interest rate contracts</td> <td valign="bottom">  </td> <td valign="bottom" align="right">Interest Expense            </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1  </td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(4)  </td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">0</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr bgcolor="#c3f9f5"><td style="border-bottom: #000000 2px solid; border-top: #000000 1px solid;" valign="top">   Total</td> <td style="border-bottom: #000000 2px solid; border-top: #000000 1px solid;" valign="bottom">  </td> <td style="border-bottom: #000000 2px solid; border-top: #000000 1px solid;" valign="bottom"> </td> <td style="border-bottom: #000000 2px solid; border-top: #000000 1px solid;" valign="bottom">  </td> <td style="border-bottom: #000000 2px solid; border-top: #000000 1px solid;" valign="bottom"> </td> <td style="border-bottom: #000000 2px solid; border-top: #000000 1px solid;" valign="bottom" align="right">$3  </td> <td style="border-bottom: #000000 2px solid; border-top: #000000 1px solid;" valign="bottom" nowrap="nowrap">  </td> <td style="border-bottom: #000000 2px solid; border-top: #000000 1px solid;" valign="bottom">  </td> <td style="border-bottom: #000000 2px solid; border-top: #000000 1px solid;" valign="bottom"> </td> <td style="border-bottom: #000000 2px solid; border-top: #000000 1px solid;" valign="bottom" align="right">$(189)  </td> <td style="border-bottom: #000000 2px solid; border-top: #000000 1px solid;" valign="bottom" nowrap="nowrap">  </td> <td style="border-bottom: #000000 2px solid; border-top: #000000 1px solid;" valign="bottom">  </td> <td style="border-bottom: #000000 2px solid; border-top: #000000 1px solid;" valign="bottom"> </td> <td style="border-bottom: #000000 2px solid; border-top: #000000 1px solid;" valign="bottom" align="right">$248</td> <td style="border-bottom: #000000 2px solid; border-top: #000000 1px solid;" valign="bottom" nowrap="nowrap">  </td></tr></table>   The following table sets forth the fair value of all derivative instruments outstanding in the Consolidated Balance Sheets (in millions):   <table border="0" cellspacing="0" cellpadding="0" width="92%"> <tr><td width="82%"> </td> <td valign="bottom" width="6%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="6%"> </td> <td> </td> <td> </td> <td> </td></tr> <tr><td valign="bottom"> </td> <td style="border-bottom: #000000 1px solid;" valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="6" align="center">Fair Value                   </td> <td style="border-bottom: #000000 1px solid;" valign="bottom"> </td></tr> <tr><td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom" colspan="6"> </td> <td valign="bottom"> </td></tr> <tr><td style="border-bottom: #000000 1px solid;" valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="right">2010</td> <td style="border-bottom: #000000 1px solid;" valign="bottom"> </td> <td style="border-bottom: #000000 1px solid;" valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="right">            2009</td> <td style="border-bottom: #000000 1px solid;" valign="bottom"> </td></tr> <tr><td valign="top">   Derivative Assets:</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td></tr> <tr><td valign="top">   Derivatives designated as hedging instruments:</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td></tr> <tr><td valign="top">   Commodity contracts</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">$20</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">$12</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr><td valign="top"> </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td></tr> <tr><td valign="top">   Derivatives not designated as hedging instruments:</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td></tr> <tr bgcolor="#c3f9f5"><td valign="top">   Commodity contracts</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">10</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">9</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr><td style="border-bottom: #000000 1px solid;" valign="top">   Foreign exchange contracts</td> <td style="border-bottom: #000000 1px solid;" valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom"> </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" align="right">1</td> <td style="border-bottom: #000000 1px solid;" valign="bottom" nowrap="nowrap">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom"> </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" align="right">0</td> <td style="border-bottom: #000000 1px solid;" valign="bottom" nowrap="nowrap">  </td></tr> <tr bgcolor="#c3f9f5"><td valign="top">   Total derivative assets – not designated</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">11</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">9</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr><td valign="top"> </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td></tr> <tr><td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="top">   Total derivative assets</td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom">  </td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom"> </td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom" align="right">$31</td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom" nowrap="nowrap">  </td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom">  </td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom"> </td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom" align="right">$21</td> <td style="border-bottom: #000000 1px solid; border-top: #000000 1px solid;" valign="bottom" nowrap="nowrap">  </td></tr> <tr><td valign="top"> </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td></tr> <tr><td valign="top">   Derivative Liabilities:</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td></tr> <tr><td valign="top">   Derivatives designated as hedging instruments:</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td></tr> <tr bgcolor="#c3f9f5"><td valign="top">   Commodity contracts</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">$16</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">$2</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr><td valign="top"> </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td></tr> <tr><td valign="top">   Derivatives not designated as hedging instruments:</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td></tr> <tr><td valign="top">   Commodity contracts</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">34</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">13</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr bgcolor="#c3f9f5"><td valign="top">   Foreign exchange contracts</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">6</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr><td style="border-bottom: #000000 1px solid;" valign="top">   Interest rate contracts</td> <td style="border-bottom: #000000 1px solid;" valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom"> </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" align="right">3</td> <td style="border-bottom: #000000 1px solid;" valign="bottom" nowrap="nowrap">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom"> </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" align="right">4</td> <td style="border-bottom: #000000 1px solid;" valign="bottom" nowrap="nowrap">  </td></tr> <tr bgcolor="#c3f9f5"><td valign="top">   Total derivative liabilities – not designated</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">43</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">18</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr><td valign="top"> </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td></tr> <tr><td style="border-bottom: #000000 2px solid; border-top: #000000 1px solid;" valign="top">   Total derivative liabilities</td> <td style="border-bottom: #000000 2px solid; border-top: #000000 1px solid;" valign="bottom">  </td> <td style="border-bottom: #000000 2px solid; border-top: #000000 1px solid;" valign="bottom"> </td> <td style="border-bottom: #000000 2px solid; border-top: #000000 1px solid;" valign="bottom" align="right">$59</td> <td style="border-bottom: #000000 2px solid; border-top: #000000 1px solid;" valign="bottom" nowrap="nowrap">  </td> <td style="border-bottom: #000000 2px solid; border-top: #000000 1px solid;" valign="bottom">  </td> <td style="border-bottom: #000000 2px solid; border-top: #000000 1px solid;" valign="bottom"> </td> <td style="border-bottom: #000000 2px solid; border-top: #000000 1px solid;" valign="bottom" align="right">$20</td> <td style="border-bottom: #000000 2px solid; border-top: #000000 1px solid;" valign="bottom" nowrap="nowrap">  </td></tr></table> Our derivative assets and liabilities are presented in our Consolidated Balance Sheets on a net basis. We net derivative assets and liabilities, including cash collateral when a legally enforceable master netting arrangement exists between the counterparty to a derivative contract and us. See Note 12: Fair Value Measurements for a reconciliation to amounts reported in the Consolidated Balance Sheets in Other current assets and Other current liabilities. </div> </div> NOTE 6: DERIVATIVE FINANCIAL INSTRUMENTS Our business operations give rise to certain market risk exposures mostly due to changes in commodity prices, foreign false false false us-types:textBlockItemType textblock This element can be used to disclose the entity's entire derivative instruments and hedging activities disclosure as a single block of text. Describes an entity's risk management strategies, derivatives in hedging activities and non-hedging derivative instruments, the assets, obligations, liabilities, revenues and expenses arising there from, and the amounts of and methodologies and assumptions used in determining the amounts of such items. Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 133 -Paragraph 45 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 133 -Paragraph 44 false 1 2 false UnKnown UnKnown UnKnown false true