Why does there appear to be significant volatility in CFCs financial metrics?
A significant amount of CFC’s derivative financial instruments do not qualify for hedge accounting, and ratios based purely on GAAP can be misleading. CFC is neither a dealer nor a trader in derivative financial instruments. CFC uses interest rate, cross currency, and cross currency interest rate exchange agreements to manage its interest-rate risk and foreign-exchange risk and typically holds these instruments until maturity. In accordance with SFAS 133, CFC records derivative instruments on the consolidated balance sheet as either an asset or liability measured at fair value. Changes in the fair value of derivative instruments are recognized in the derivative forward value line item of the consolidated statement of operations unless specific hedge accounting criteria are met. The change to the fair value is recorded to other comprehensive income if the hedge accounting criteria are met. In the case of certain foreign currency exchange agreements that meet hedge accounting criteria, t
