2.2.0.7 false Financial Instruments 0207 - Disclosure - Financial Instruments true false false false 1 USD false false USD Standard http://www.xbrl.org/2003/iso4217 USD iso4217 0 USDEPS Divide http://www.xbrl.org/2003/iso4217 USD iso4217 http://www.xbrl.org/2003/instance shares xbrli 0 Shares Standard http://www.xbrl.org/2003/instance shares xbrli 0 $ 2 Financial Instruments [Abstract] 0 us-gaap_DerivativeInstrumentsAndHedgesAbstract 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 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 verboselabel false 1 false false false false 0 0   <div align="left" style="margin-left: 0%"> <table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent; text-align: left"> <tr> <td width="7%"></td> <td width="93%"></td> </tr> <tr valign="top"> <td> <b><font style="font-family: 'Times New Roman', Times">Note 7. </font></b> </td> <td> <b><font style="font-family: 'Times New Roman', Times">Financial Instruments</font></b> </td> </tr> </table> <div style="margin-top: 12pt; font-size: 1pt">  </div> <div align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent"> <b><i><font style="font-family: 'Times New Roman', Times">Asset and Liability Instruments</font></i></b> </div> <div style="margin-top: 6pt; font-size: 1pt">  </div> <div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"> At September 30, 2010, and December 31, 2009, the fair value of cash and temporary cash investments, short- and long-term receivables, accounts payable, and short-term debt were the same as, or not materially different from, the amount recorded for these assets and liabilities. The fair value of long-term debt was approximately $1.6 billion at September 30, 2010, and $1.5 billion at December 31, 2009. The recorded amount was $1.3 billion at September 30, 2010, and December 31, 2009. The fair value of long-term debt was based on quoted market prices for our debt instruments. </div> <div style="margin-top: 12pt; font-size: 1pt">  </div> <div align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent"> <b><i><font style="font-family: 'Times New Roman', Times">Instruments with Off-Balance Sheet Risk (Including Derivatives)</font></i></b> </div> <div style="margin-top: 6pt; font-size: 1pt">  </div> <div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"> We use derivative instruments, principally swaps, forward contracts, and options, to manage our exposure to movements in foreign currency values, interest rates, and commodity prices. </div> <div style="margin-top: 12pt; font-size: 1pt">  </div> <div align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent"> <i><font style="font-family: 'Times New Roman', Times">Cash Flow Hedges</font></i> </div> <div style="margin-top: 6pt; font-size: 1pt">  </div> <div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"> For derivative instruments that are designated and qualify as cash flow hedges, the effective portion of the gain or loss on the derivative is reported as a component of other comprehensive income (OCI) and reclassified into earnings in the same period or periods in which the hedged transaction affects earnings. Financial instruments designated as cash flow hedges are assessed both at inception and quarterly thereafter to ensure they are effective in offsetting changes in the cash flows of the related underlying exposures. The fair value of the hedge instruments are reclassified from OCI to earnings if the hedge ceases to be highly effective or if the hedged transaction is no longer probable. </div> <div style="margin-top: 12pt; font-size: 1pt">  </div> <div align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent"> <i><font style="font-family: 'Times New Roman', Times">Foreign Currency</font></i> </div> <div style="margin-top: 6pt; font-size: 1pt">  </div> <div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"> From time to time, we use derivative financial instruments to hedge our exposure to changes in foreign currency exchange rates, principally using foreign currency purchase and sale contracts with terms of less than one year. We do so to mitigate our exposure to exchange rate changes related to third-party trade receivables and accounts payable. Net gains or losses on such contracts are recognized in the statement of income as offsets to foreign currency exchange gains or losses on the underlying transactions. In the statement of cash flows, cash receipts and payments related to hedging contracts are classified in the same way as cash flows from the transactions being hedged. We had no open foreign currency contracts as of September 30, 2010. </div> <div style="margin-top: 12pt; font-size: 1pt">  </div> <div align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent"> <i><font style="font-family: 'Times New Roman', Times">Interest Rates</font></i> </div> <div style="margin-top: 6pt; font-size: 1pt">  </div> <div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"> We entered into interest rate swap agreements in connection with the acquisition of Prairie. The agreements were terminated on June 20, 2007, resulting in a gain of $9 million. This gain is being recorded as a reduction of interest expense over the average life of the underlying debt. Amounts recognized in earnings related to our hedging transactions were $1 million for both the nine months ended September 30, 2010, and September 30, 2009. </div> <div style="margin-top: 12pt; font-size: 1pt">  </div> <div align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent"> <i><font style="font-family: 'Times New Roman', Times">Commodity</font></i> </div> <div style="margin-top: 6pt; font-size: 1pt">  </div> <div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"> During the first nine months of 2010, we entered into natural gas purchase agreements with third parties, hedging a portion of the fourth quarter of 2010 purchases of natural gas used in the production processes at certain of our plants. These purchase agreements are marked to market, with the resulting gains or losses recognized in earnings when hedged transactions are recorded. The <font style="white-space: nowrap">mark-to-market</font> adjustments at September 30, 2010, were immaterial. </div> <div style="margin-top: 6pt; font-size: 1pt">  </div> <div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"> To minimize volatility in our margins due to large fluctuations in the price of commodities, in the third quarter of 2010 we entered into swap contracts to manage risks associated with market fluctuations in resin prices. These contracts were designated as cash flow hedges of forecasted commodity purchases. As of September 30, 2010, we have hedged, on a monthly basis, approximately 1% of the expected resin purchase volume for the remainder of 2010. Assuming the market prices of the swap contracts remained unchanged from the prices at September 30, 2010, the estimated gain expected to be reclassified to earnings in the remainder of 2010 would be immaterial. </div> <div style="margin-top: 12pt; font-size: 1pt">  </div> <div align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent"> <i><font style="font-family: 'Times New Roman', Times">Fair Value Measurements</font></i> </div> <div style="margin-top: 6pt; font-size: 1pt">  </div> <div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"> Financial assets and liabilities that are recorded at fair value consist of derivative contracts that are used to hedge exposures to interest rate, commodity, and currency risks. <font style="white-space: nowrap">ASC 820-10-35</font> “Fair Value Measurements and Disclosures” sets out a fair value hierarchy that groups fair value measurement inputs into three classifications: Level 1, Level 2, or Level 3. Level 1 inputs are quoted prices in an active market for identical assets or liabilities. Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs for the asset or liability. All of our fair value measurements for derivative contracts use Level 2 inputs. </div> <div style="margin-top: 6pt; font-size: 1pt">  </div> <div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"> The fair value of our derivative instruments recorded in the consolidated balance sheet as of September 30, 2010 was $1 million. There were no outstanding derivative instruments recorded in the consolidated balance sheet as of December 31, 2009. </div> <div style="margin-top: 6pt; font-size: 1pt">  </div> <div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"> The following table indicates the amounts recognized in OCI for those derivatives designated as cash flow hedges for the nine months ended September 30, 2010, and September 30, 2009. </div> <div style="margin-top: 6pt; font-size: 1pt">  </div> <table border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent; text-align: left">  <tr style="font-size: 1pt" valign="bottom"> <td width="44%"> </td> <td width="2%"> </td> <td width="2%" align="right"> </td> <td width="1%" align="right"> </td> <td width="2%" align="left"> </td> <td width="5%"> </td> <td width="2%" align="right"> </td> <td width="1%" align="right"> </td> <td width="2%" align="left"> </td> <td width="3%"> </td> <td width="20%"> </td> <td width="3%"> </td> <td width="2%" align="right"> </td> <td width="1%" align="right"> </td> <td width="2%" align="left"> </td> <td width="3%"> </td> <td width="2%" align="right"> </td> <td width="1%" align="right"> </td> <td width="2%" align="left"> </td> </tr>   <tr style="font-size: 8pt" valign="bottom" align="center"> <td nowrap="nowrap" align="left" valign="bottom">   </td> <td>   </td> <td colspan="7" nowrap="nowrap" align="center" valign="bottom"> <b>Gain or (Loss)<br /> </b> </td> <td>   </td> <td nowrap="nowrap" align="center" valign="bottom"> <b>Location of Gain or (Loss)<br /> </b> </td> <td>   </td> <td colspan="7" nowrap="nowrap" align="center" valign="bottom"> <b>(Gain) or Loss<br /> </b> </td> </tr> <tr style="font-size: 8pt" valign="bottom" align="center"> <td nowrap="nowrap" align="left" valign="bottom">   </td> <td>   </td> <td colspan="7" nowrap="nowrap" align="center" valign="bottom"> <b>Recognized in OCI<br /> </b> </td> <td>   </td> <td nowrap="nowrap" align="center" valign="bottom"> <b>Reclassified from<br /> </b> </td> <td>   </td> <td colspan="7" nowrap="nowrap" align="center" valign="bottom"> <b>Reclassified from OCI into Income<br /> </b> </td> </tr> <tr style="font-size: 8pt" valign="bottom" align="center"> <td nowrap="nowrap" align="left" valign="bottom">   </td> <td>   </td> <td colspan="7" nowrap="nowrap" align="center" valign="bottom" style="border-bottom: 1px solid #000000"> <b>(Effective Portion)</b> </td> <td>   </td> <td nowrap="nowrap" align="center" valign="bottom"> <b>OCI into Income<br /> </b> </td> <td>   </td> <td colspan="7" nowrap="nowrap" align="center" valign="bottom" style="border-bottom: 1px solid #000000"> <b>(Effective Portion)</b> </td> </tr> <tr style="font-size: 8pt" valign="bottom" align="center"> <td nowrap="nowrap" align="left" valign="bottom"> (In millions) </td> <td>   </td> <td colspan="3" nowrap="nowrap" align="center" valign="bottom" style="border-bottom: 1px solid #000000"> <b>2010</b> </td> <td>   </td> <td colspan="3" nowrap="nowrap" align="center" valign="bottom" style="border-bottom: 1px solid #000000"> <b>2009</b> </td> <td>   </td> <td nowrap="nowrap" align="center" valign="bottom" style="border-bottom: 1px solid #000000"> <b>(Effective Portion)</b> </td> <td>   </td> <td colspan="3" nowrap="nowrap" align="center" valign="bottom" style="border-bottom: 1px solid #000000"> <b>2010</b> </td> <td>   </td> <td colspan="3" nowrap="nowrap" align="center" valign="bottom" style="border-bottom: 1px solid #000000"> <b>2009</b> </td> </tr> <tr style="line-height: 3pt; font-size: 1pt"> <td>  </td> </tr>  <tr valign="bottom"> <td nowrap="nowrap" align="left" valign="bottom"> <div style="text-indent: -10pt; margin-left: 10pt"> Commodity Contracts </div> </td> <td>   </td> <td nowrap="nowrap" align="right" valign="bottom"> $ </td> <td nowrap="nowrap" align="right" valign="bottom"> 1 </td> <td nowrap="nowrap" align="left" valign="bottom">   </td> <td>   </td> <td nowrap="nowrap" align="right" valign="bottom"> $ </td> <td nowrap="nowrap" align="right" valign="bottom"> — </td> <td nowrap="nowrap" align="left" valign="bottom">   </td> <td>   </td> <td align="left" valign="bottom"> Cost of Sales </td> <td>   </td> <td nowrap="nowrap" align="right" valign="bottom"> $ </td> <td nowrap="nowrap" align="right" valign="bottom">   — </td> <td nowrap="nowrap" align="left" valign="bottom">   </td> <td>   </td> <td nowrap="nowrap" align="right" valign="bottom"> $ </td> <td nowrap="nowrap" align="right" valign="bottom">   (2 </td> <td nowrap="nowrap" align="left" valign="bottom"> ) </td> </tr> <tr valign="bottom"> <td align="left" valign="bottom"> <div style="text-indent: -10pt; margin-left: 10pt"> Interest Rate Contracts </div> </td> <td>   </td> <td nowrap="nowrap" align="right" valign="bottom"> $ </td> <td nowrap="nowrap" align="right" valign="bottom">   — </td> <td nowrap="nowrap" align="left" valign="bottom">   </td> <td>   </td> <td nowrap="nowrap" align="right" valign="bottom"> $ </td> <td nowrap="nowrap" align="right" valign="bottom">   — </td> <td nowrap="nowrap" align="left" valign="bottom">   </td> <td>   </td> <td nowrap="nowrap" align="left" valign="bottom"> Interest Expense </td> <td>   </td> <td nowrap="nowrap" align="right" valign="bottom"> $ </td> <td nowrap="nowrap" align="right" valign="bottom">   (1 </td> <td nowrap="nowrap" align="left" valign="bottom"> ) </td> <td>   </td> <td nowrap="nowrap" align="right" valign="bottom"> $ </td> <td nowrap="nowrap" align="right" valign="bottom">   (1 </td> <td nowrap="nowrap" align="left" valign="bottom"> ) </td> </tr> </table> <div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"> </div>  </div>   <div style="margin-left: 0%">  <div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"> </div> <div style="margin-top: 0pt; font-size: 1pt"> </div>  </div>  <!-- Begin Block Tagged Note 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. 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