2.2.0.7 false Note 3 - Derivative Instruments Hedging and Risk Management Activities 00902 - Disclosure - Note 3 - Derivative Instruments Hedging and Risk Management Activities true false false false 1 USD false false Dollars Standard http://www.xbrl.org/2003/iso4217 USD iso4217 0 Shares Standard http://www.xbrl.org/2003/instance shares xbrli 0 $ 2 Notes to Financial Statements [Abstract] 0 pbra_NotesToFinancialStatementsAbstract pbra false 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 Note 3 - Derivative Instruments, Hedging and Risk Management Activities 1 us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureTextBlock us-gaap true na duration No definition available. false false false false false false false false false false false false 1 false false false false 0 0 <div style="PADDING-RIGHT: 0%; PADDING-LEFT: 0%; WIDTH: 100%"></div> <div style="PADDING-RIGHT: 0%; PADDING-LEFT: 0%; WIDTH: 100%"> 3. Derivative Instruments, Hedging and Risk Management Activities The Company is exposed to a number of market risks arising from its normal course of business. Such market risks principally involve the possibility that changes in interest rates, foreign currency exchange rates or commodity prices will adversely affect the value of the Companys financial assets and liabilities or future cash flows and earnings. Petrobras risk management is performed by means of its Board of Directors pursuant to a corporate policy risk management. In March 2010, regarding the new corporate governance model developed by the Company, the Financial Commitee, in place of the Risk Management Committee, was organized by the Executive Board. Such a Committee is sponsored by the Financial Board and made up of all executive managers from the Financial area, and executive managers of Business can also be called to discuss about specific subjects. Among the Financial Commitee liabilities, it shall evaluate risk exposures and establish guidelines to measure, supervise and manage the risk concerning the Company's operation. The Board of Directors shall be liable to decide about the issues. The risk management policy of Petrobras aims at contributing towards an appropriate balance between its objectives for growth and return and its level of risk exposure, whether inherent to the exercise of its activities or arising from the context within which it operates, so that, through effective allocation of its physical, financial and human resources the Company may attain its strategic goals. </div> <div style="PADDING-RIGHT: 0%; PADDING-LEFT: 0%; WIDTH: 100%"> The Company may use derivative and non-derivative instruments to implement its corporate risk management strategy. However, by using derivative instruments, the Company exposes itself to credit and market risk. Credit risk is the failure of a counterparty to perform under the terms of the derivative contract. Market risk is the possible adverse effect on the value of an asset or liability, including financial instruments that results from changes in interest rates, currency exchange rates, or commodity prices. The Company addresses credit risk by restricting the counterparties to such derivative financial instruments to major financial institutions. Market risk is managed by the Companys executive officers. The Company does not hold or issue derivative financial instruments for trading purposes. a) Commodity price risk management The Company is exposed to commodity price risks as a result of the fluctuation of crude oil and oil product prices. The Companys commodity risk management activities are primarily undertaking through the uses of future contracts traded on stock exchanges; and options and swaps entered into with major financial institutions. The Company does not use derivative contracts for speculative purposes. The Company usually does not use derivatives to manage overall commodity price risk exposure, taking into consideration that the Companys business plan uses conservative price assumptions associated to the fact that, under normal market conditions, price fluctuations of commodities do not represent a substantial risk to achieve strategic objectives. The decision to enter into hedging or non-hedging derivatives is reviewed periodically and recommended, or not, to the Risk Management Committee. If entering into derivative is indicated, in scenarios with a significant probability of adverse events, and such decision is approved by the Board of Directors, the derivative transactions should be carried out with the aim of protecting the Companys solvency, liquidity and execution of the corporate investment plan, considering an integrated analysis of all the Companys risk exposures. Outstanding derivative contracts aimed to mitigate price risk exposures from specific transactions, in which positive or negative results in the derivative transactions are totally or partially offset by the opposite result in the physical positions. The transactions covered by commodity derivatives are certain cargoes traded from import and export operations and transactions between different geographical markets. </div> <div style="PADDING-RIGHT: 0%; PADDING-LEFT: 0%; WIDTH: 100%"> As a result of the Companys current price risk management, derivatives are contracted for short term operations, to mitigate the price risk of specific forecasted transactions. The operations are carried out on the New York Mercantile Exchange (NYMEX) and the Intercontinental Exchange (ICE), as well as on the international over-the-counter market. </div> <div style="PADDING-RIGHT: 0%; PADDING-LEFT: 0%; WIDTH: 100%"> The Companys exposure from these contracts is limited to the difference between the contract value and market value on the volumes contracted. Crude oil future contracts are marked-to-market and related gains and losses are recognized in current period earnings, irrespective of when the physical crude sales occur. The main parameters used in risk management for variations of Petrobras oil and oil products prices are the cash flow at risk (CFAR) for medium-term assessments, Value at Risk (VAR) for short-term assessments, and Stop Loss. Corporate limits are defined for VAR and Stop Loss. The hedges settled during the period from January to September 2010 corresponded to approximately 68% of the traded volume of imports and exports to and from Brazil plus the total volume of the products traded abroad. The main counterparties of operations for derivatives for oil and oil products are the New York Stock Exchange (NYMEX), the Intercontinental Exchange, BNP Paribas, Shell (STASCO) and Morgan Stanley. The commodity derivative contracts are reflected at fair value as either assets or liabilities on the Companys consolidated balance sheets, recognizing gain or losses in earnings, using market to market accounting, in the period of change. As of September 30, 2010, the Company had the following outstanding commodity derivative contracts: <div align="left"> <table style="FONT-SIZE: 7pt; WIDTH: 100%; FONT-FAMILY: 'Arial'" cellspacing="0" border="0"> <tr> <td width="40%"></td> <td width="20%"></td> <td width="40%"></td> </tr> <tr valign="bottom"> <td style="BORDER-BOTTOM: #000000 1px solid" align="center">Commodity Contracts Maturity in 2010</td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="center">Notional amount in thousands of bbl* As of September 30, 2010</td> </tr> <tr> <td colspan="3"> </td> </tr> <tr valign="bottom"> <td align="left">Futures and Forward contracts</td> <td> </td> <td align="right">(10,673)</td> </tr> <tr valign="bottom"> <td align="left">Option contracts</td> <td> </td> <td align="right">(9,834)</td> </tr> </table> </div>   * A negative notional value represents a sale position. </div> <div style="PADDING-RIGHT: 0%; PADDING-LEFT: 0%; WIDTH: 100%"> b) Foreign currency risk management Exchange risk is one of the financial risks that the Company is exposed to originating from changes in the levels or volatility of exchange rates. With respect to the management of these risks, the Company seeks to identify and handle them in an integrated manner, seeking to assure efficient allocation of the resources earmarked for the derivative. Taking advantage of operating in an integrated manner in the energy segment, the Company seeks, primarily, to identify or create natural risk mitigation, benefiting from the correlation between its income and expenses. In the specific case of exchange variations inherent to the contracts with the cost and remuneration involved in different currencies, this natural risk mitigation is carried out through allocating the cash investments between the real and the US dollar or another currency. The risk management is based on the Companys net exposure. Periodical analyses of the exchange risk are prepared, assisting the decisions of the executive committee. The exchange risk management strategy involves the use of derivative instruments to minimize the exchange exposure of certain of the Companys obligations. BR Distribuidora (wholly owned subsidiary) entered into an over the counter contract, not qualified as hedge accounting, for covering the trading margins inherent to exports (aviation segment) for foreign clients. The objective of the operation, contracted contemporaneously with the definition of the cost of the products exported, is to lock the trading margins agreed with the foreign clients. Internal policy limits the volume of derivative contracts to the volume of products exported. The volume of hedge executed for the exports occurring between January and September 2010 represented 54.9% of the total exported by BR Distribuidora. The settlements of the operations that matured between January 1 and September 30, 2010 generated a positive result for the Company of US$5. </div> <div style="PADDING-RIGHT: 0%; PADDING-LEFT: 0%; WIDTH: 100%"> The over the counter contract is presented at fair value as either assets or liabilities on the Companys consolidated balance sheets, recognizing gains or losses in earnings, using market to market accounting, in the period of change. </div> <div style="PADDING-RIGHT: 0%; PADDING-LEFT: 0%; WIDTH: 100%"> As of September 30, 2010, the Company had the following foreign currency derivative contracts, not qualified as hedging accounting: <div align="left"> <table style="FONT-SIZE: 7pt; WIDTH: 100%; FONT-FAMILY: 'Arial'" cellspacing="0" border="0"> <tr> <td width="48%"></td> <td width="4%"></td> <td width="48%"></td> </tr> <tr valign="bottom"> <td style="BORDER-BOTTOM: #000000 1px solid" align="right">Foreign Currency</td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="right">Notional Amount US$ million</td> </tr> <tr> <td colspan="3"> </td> </tr> <tr valign="bottom"> <td align="right">Sell USD / Pay BRL</td> <td> </td> <td style="BORDER-BOTTOM: #000000 3px double" align="right">149</td> </tr> </table> </div>   Cash flow hedge In September 2006, the Company contracted a hedge known as a cross currency swap for coverage of the bonds issued in Yens in order to fix the Companys costs in this operation in dollars. In a cross currency swap there is an exchange of interest rates in different currencies. The exchange rate of the Yen for the US dollar is fixed at the beginning of the transaction and remains fixed during its existence. The Company does not intend to settle these contracts before the end of the term. The Company has qualified its cross currency swap as a cash flow hedge. Both at the inception of a hedge and on an ongoing basis, a cash flow hedge is expected to be highly effective in achieving to offset cash flows attributable to the hedged risk during the term of the hedge. Derivative instruments qualified as cash flow hedges are reflected as either assets or liabilities on the Companys consolidated balance sheets. Change in fair value, to the extent the hedge is effective, is presented in accumulated other comprehensive income until the cash flows of the hedged item occurs. Effectiveness tests are conducted quarterly in order to measure how the changes in the fair value or the cash flow of the hedged items are being absorbed by the hedge mechanisms. The effectiveness calculation indicated that the cross currency swap is highly effective to offset the variation in the cash flows of the bonds issued in Yens. </div> <div style="PADDING-RIGHT: 0%; PADDING-LEFT: 0%; WIDTH: 100%"> As of September 30, 2010, the Company had the following cross currency swaps: Cross Currency Swaps <div align="left"> <table style="FONT-SIZE: 7pt; WIDTH: 100%; FONT-FAMILY: 'Arial'" cellspacing="0" border="0"> <tr> <td width="33%"></td> <td width="1%"></td> <td width="32%"></td> <td width="1%"></td> <td width="33%"></td> </tr> <tr valign="bottom"> <td align="left"> </td> <td> </td> <td align="left"> </td> <td> </td> <td align="right"></td> </tr> <tr valign="bottom"> <td style="BORDER-BOTTOM: #000000 1px solid" align="left">Maturing in 2016</td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="center">%</td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="right">Notional Amount (Million)</td> </tr> <tr> <td colspan="5"> </td> </tr> <tr valign="bottom"> <td align="left">Fixed to fixed</td> <td> </td> <td align="left"> </td> <td> </td> <td align="left"> </td> </tr> <tr valign="bottom"> <td align="left">Average Pay Rate (USD)</td> <td> </td> <td align="center">5.69</td> <td> </td> <td align="right">US$298</td> </tr> <tr valign="bottom"> <td align="left">Average Receive Rate (JPY)</td> <td> </td> <td align="center">2.15</td> <td> </td> <td align="right">JPY$35,000</td> </tr> </table> </div>   c) Interest rate risk management The Companys interest rate risk is a function of the Companys long-term debt and to a lesser extent, its short-term debt. The Companys foreign currency floating rate debt is principally subject to fluctuations in LIBOR and the Companys floating rate debt denominated in Reais is principally subject to fluctuations in the Brazilian long-term interest rate (TJLP) as fixed by the National Monetary Counsel. The Company currently does not use derivative financial instruments to manage its exposure to fluctuations in interest rates. </div> <div style="PADDING-RIGHT: 0%; PADDING-LEFT: 0%; WIDTH: 100%"> d) Tabular presentation of the location and amounts of derivative fair values The effect of derivative instruments on the balance sheets for the nine-month period ended September 30, 2010, is presented as follows: <div align="left"> <table style="FONT-SIZE: 7pt; WIDTH: 100%; FONT-FAMILY: 'Arial'" cellspacing="0" border="0"> <tr> <td width="42%"></td> <td width="1%"></td> <td width="15%"></td> <td width="1%"></td> <td width="12%"></td> <td width="1%"></td> <td width="15%"></td> <td width="1%"></td> <td width="12%"></td> </tr> <tr valign="bottom"> <td align="center">In millions of dollars</td> <td> </td> <td style="TEXT-INDENT: 6px; BORDER-BOTTOM: #000000 1px solid" align="center" colspan="3">Asset Derivatives </td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="center" colspan="3">Liability Derivatives </td> </tr> <tr valign="bottom"> <td style="BORDER-BOTTOM: #000000 1px solid" align="center">As of September 30,</td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="center" colspan="3">2010 </td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="center" colspan="3">2010 </td> </tr> <tr valign="bottom"> <td align="center"> </td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="center">Balance Sheet Location</td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="center">Fair Value</td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="center">Balance Sheet Location</td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="center">Fair Value</td> </tr> <tr valign="bottom"> <td align="left">Derivatives qualified as hedging instruments under Codification Topic 815</td> <td> </td> <td align="left"> </td> <td> </td> <td align="left"> </td> <td> </td> <td align="left"> </td> <td> </td> <td align="left"> </td> </tr> <tr valign="bottom"> <td align="left">     Foreign exchange contracts</td> <td> </td> <td align="left">Other current assets</td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="right">94</td> <td> </td> <td align="left"> </td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="right">-</td> </tr> <tr valign="bottom"> <td align="left">Total</td> <td> </td> <td align="left"> </td> <td> </td> <td align="right">94</td> <td> </td> <td align="left"> </td> <td> </td> <td align="right">-</td> </tr> <tr> <td colspan="9"> </td> </tr> <tr valign="bottom"> <td align="left">Derivatives not qualified as hedging instruments under Codification Topic 815</td> <td> </td> <td align="left"> </td> <td> </td> <td align="left"> </td> <td> </td> <td align="left"> </td> <td> </td> <td align="left"> </td> </tr> <tr valign="bottom"> <td align="left">     Foreign exchange contracts</td> <td> </td> <td align="left">Other current assets</td> <td> </td> <td align="right">1</td> <td> </td> <td align="left">Other payables and accruals</td> <td> </td> <td align="right">-</td> </tr> <tr> <td colspan="9"> </td> </tr> <tr valign="bottom"> <td align="left">     Commodity contracts</td> <td> </td> <td align="left">Other current assets</td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="right">40</td> <td> </td> <td align="left">Other payables and accruals</td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="right">(80)</td> </tr> <tr> <td colspan="9"> </td> </tr> <tr valign="bottom"> <td align="left">Total</td> <td> </td> <td align="left"> </td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="right">41</td> <td> </td> <td align="left"> </td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="right">(80)</td> </tr> <tr valign="bottom"> <td align="left">Total Derivatives</td> <td> </td> <td align="left"> </td> <td> </td> <td style="BORDER-BOTTOM: #000000 3px double" align="right">135</td> <td> </td> <td align="left"> </td> <td> </td> <td style="BORDER-BOTTOM: #000000 3px double" align="right">(80)</td> </tr> </table> </div>   </div> <div style="PADDING-RIGHT: 0%; PADDING-LEFT: 0%; WIDTH: 100%"> The effect of derivative instruments on the balance sheets for the year ended December 31, 2009 is presented as follows: <div align="left"> <table style="FONT-SIZE: 7pt; WIDTH: 100%; FONT-FAMILY: 'Arial'" cellspacing="0" border="0"> <tr> <td width="42%"></td> <td width="1%"></td> <td width="16%"></td> <td width="1%"></td> <td width="11%"></td> <td width="1%"></td> <td width="16%"></td> <td width="1%"></td> <td width="11%"></td> </tr> <tr valign="bottom"> <td align="center">In millions of dollars</td> <td> </td> <td style="TEXT-INDENT: 6px; BORDER-BOTTOM: #000000 1px solid" align="center" colspan="3">Asset Derivatives</td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="center" colspan="3">Liability Derivatives</td> </tr> <tr valign="bottom"> <td style="BORDER-BOTTOM: #000000 1px solid" align="center">As of December 31,</td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="center" colspan="3">2009</td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="center" colspan="3">2009</td> </tr> <tr valign="bottom"> <td align="center"> </td> <td> </td> <td style="TEXT-INDENT: 6px; BORDER-BOTTOM: #000000 1px solid" align="center">Balance Sheet Location</td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="center">Fair Value</td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="center">Balance Sheet Location</td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="center">Fair Value</td> </tr> <tr valign="bottom"> <td align="left">Derivatives qualified as hedging instruments under Codification Topic 815</td> <td> </td> <td align="left"> </td> <td> </td> <td align="left"> </td> <td> </td> <td align="left"> </td> <td> </td> <td align="left"> </td> </tr> <tr valign="bottom"> <td align="left">     Foreign exchange contracts</td> <td> </td> <td align="left">Other current assets</td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="right">65</td> <td> </td> <td align="left"> </td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="right">-</td> </tr> <tr valign="bottom"> <td align="left">Total</td> <td> </td> <td align="left"> </td> <td> </td> <td align="right">65</td> <td> </td> <td align="left"> </td> <td> </td> <td align="right">-</td> </tr> <tr> <td colspan="9"> </td> </tr> <tr valign="bottom"> <td align="left">Derivatives not qualified as hedging instruments under Codification Topic 815</td> <td> </td> <td align="left"> </td> <td> </td> <td align="left"> </td> <td> </td> <td align="left"> </td> <td> </td> <td align="left"> </td> </tr> <tr valign="bottom"> <td align="left">     Foreign exchange contracts</td> <td> </td> <td align="left">Other current assets</td> <td> </td> <td align="right">1</td> <td> </td> <td align="left">Other payable and accruals</td> <td> </td> <td align="right">-</td> </tr> <tr valign="bottom"> <td align="left">     Commodity contracts</td> <td> </td> <td align="left">Other current assets</td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="right">35</td> <td> </td> <td align="left">Other payables and accruals</td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="right">(51)</td> </tr> <tr> <td colspan="9"> </td> </tr> <tr valign="bottom"> <td align="left">Total</td> <td> </td> <td align="left"> </td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="right">36</td> <td> </td> <td align="left"> </td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="right">(51)</td> </tr> <tr> <td colspan="9"> </td> </tr> <tr valign="bottom"> <td align="left">Total Derivatives</td> <td> </td> <td align="left"> </td> <td> </td> <td style="BORDER-BOTTOM: #000000 3px double" align="right">101</td> <td> </td> <td align="left"> </td> <td> </td> <td style="BORDER-BOTTOM: #000000 3px double" align="right">(51)</td> </tr> </table> </div>   </div> <div style="PADDING-RIGHT: 0%; PADDING-LEFT: 0%; WIDTH: 100%"> The effect of derivative instruments on the statement of financial position for the nine-month period ended September 30, 2010, is reflected as follows: <div align="left"> <table style="FONT-SIZE: 7pt; WIDTH: 100%; FONT-FAMILY: 'Arial'" cellspacing="0" border="0"> <tr> <td width="20%"></td> <td width="1%"></td> <td width="19%"></td> <td width="1%"></td> <td width="19%"></td> <td width="1%"></td> <td width="19%"></td> <td width="1%"></td> <td width="19%"></td> </tr> <tr valign="bottom"> <td style="BORDER-BOTTOM: #000000 1px solid" align="left" rowspan="2">Derivatives in Codification Topic 815 Cash Flow Hedging Relationship</td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="center">Amount of Gain or (Loss) Recognized in OCI on Derivative (Effective Portion)</td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="center" rowspan="2">Location of Gain or (Loss) reclassified from Accumulated OCI into Income (Effective portion)</td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="center">Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)</td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="center">Amount of Gain or (Loss) Recognized in income on derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing)</td> </tr> <tr valign="bottom"> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="center">September 30, 2010</td> <td> </td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="center">September 30, 2010</td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="center">September 30, 2010</td> </tr> <tr> <td colspan="9"> </td> </tr> <tr> <td colspan="9"> </td> </tr> <tr valign="bottom"> <td align="left">Foreign exchange contracts</td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="right">20</td> <td> </td> <td align="right">Financial Expenses</td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="right">(35)</td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="right">-</td> </tr> <tr valign="bottom"> <td align="left"> </td> <td> </td> <td style="BORDER-BOTTOM: #000000 3px double" align="right">20</td> <td> </td> <td align="left"> </td> <td> </td> <td style="BORDER-BOTTOM: #000000 3px double" align="right">(35)</td> <td> </td> <td style="BORDER-BOTTOM: #000000 3px double" align="right">-</td> </tr> </table> </div>   The effect of derivative instruments on the statement of financial position for the nine-month period ended September 30, 2009, is reflected as follows: <div align="left"> <table style="FONT-SIZE: 7pt; WIDTH: 100%; FONT-FAMILY: 'Arial'" cellspacing="0" border="0"> <tr> <td width="20%"></td> <td width="1%"></td> <td width="19%"></td> <td width="1%"></td> <td width="19%"></td> <td width="1%"></td> <td width="19%"></td> <td width="1%"></td> <td width="19%"></td> </tr> <tr valign="bottom"> <td style="BORDER-BOTTOM: #000000 1px solid" align="left" rowspan="2">Derivatives in Codification Topic 815 Cash Flow Hedging Relationship</td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="center">Amount of Gain or (Loss) Recognized in OCI on Derivative (Effective Portion)</td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="center" rowspan="2">Location of Gain or (Loss) reclassified from Accumulated OCI into Income (Effective portion)</td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="center">Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)</td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="center">Amount of Gain or (Loss) Recognized in income on derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing)</td> </tr> <tr valign="bottom"> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="center">September 30, 2009</td> <td> </td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="center">September 30, 2009</td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="center">September 30, 2009</td> </tr> <tr> <td colspan="9"> </td> </tr> <tr valign="bottom"> <td align="left">Foreign exchange contracts</td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="right">15</td> <td> </td> <td align="center">Financial Expenses</td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="right">3</td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="right">-</td> </tr> <tr valign="bottom"> <td align="left"> </td> <td> </td> <td style="BORDER-BOTTOM: #000000 3px double" align="right">15</td> <td> </td> <td align="left"> </td> <td> </td> <td style="BORDER-BOTTOM: #000000 3px double" align="right">3</td> <td> </td> <td style="BORDER-BOTTOM: #000000 3px double" align="right">-</td> </tr> </table> </div>   </div> <div style="PADDING-RIGHT: 0%; PADDING-LEFT: 0%; WIDTH: 100%"> <div align="left"> <table style="FONT-SIZE: 7pt; WIDTH: 100%; FONT-FAMILY: 'Arial'" cellspacing="0" border="0"> <tr> <td width="39%"></td> <td width="1%"></td> <td width="39%"></td> <td width="1%"></td> <td width="20%"></td> </tr> <tr valign="bottom"> <td style="BORDER-BOTTOM: #000000 1px solid" align="left" rowspan="2">Derivatives Not Qualified as Hedging Instruments under Codification Topic 815</td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="center" rowspan="2">Location of Gain or (Loss) Recognized in Income on Derivative</td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="center">Amount of Gain or (Loss) Recognized in Income on Derivative</td> </tr> <tr valign="bottom"> <td> </td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="center">September 30, 2010</td> </tr> <tr> <td colspan="5"> </td> </tr> <tr valign="bottom"> <td align="left">Foreign exchange contracts</td> <td> </td> <td align="left">Financial income/(expenses) net</td> <td> </td> <td align="right">6</td> </tr> <tr> <td colspan="5"> </td> </tr> <tr valign="bottom"> <td align="left">Commodity contracts</td> <td> </td> <td align="left">Financial income/(expenses) net</td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="right">23</td> </tr> <tr> <td colspan="5"> </td> </tr> <tr valign="bottom"> <td align="left">Total</td> <td> </td> <td align="left"> </td> <td> </td> <td style="BORDER-BOTTOM: #000000 3px double" align="right">29</td> </tr> <tr> <td colspan="5"> </td> </tr> <tr valign="bottom"> <td style="BORDER-BOTTOM: #000000 1px solid" align="left" rowspan="2">Derivatives Not Qualified as Hedging Instruments under Codification Topic 815</td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="center" rowspan="2">Location of Gain or (Loss) Recognized in Income on Derivative</td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="center">Amount of Gain or (Loss) Recognized in Income on Derivative</td> </tr> <tr valign="bottom"> <td> </td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="center">September 30, 2009</td> </tr> <tr> <td colspan="5"> </td> </tr> <tr valign="bottom"> <td align="left">Foreign exchange contracts</td> <td> </td> <td align="left">Financial income/(expenses) net</td> <td> </td> <td align="right">(33)</td> </tr> <tr> <td colspan="5"> </td> </tr> <tr valign="bottom"> <td align="left">Commodity contracts</td> <td> </td> <td align="left">Financial income/(expenses) net</td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="right">(103)</td> </tr> <tr> <td colspan="5"> </td> </tr> <tr valign="bottom"> <td align="left">Total</td> <td> </td> <td align="left"> </td> <td> </td> <td style="BORDER-BOTTOM: #000000 3px double" align="right">(136)</td> </tr> </table> </div>   </div> 3. Derivative Instruments, Hedging and Risk Management Activities The Company is exposed to a number of market risks arising from its normal course of 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