Arrow Electronics 2011 Annual Report Download - page 41

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39
proceeds of the swap terminations, less accrued interest, were reflected as a premium to the underlying debt and will be amortized
as a reduction to interest expense over the remaining term of the underlying debt.
In September 2011, the company entered into a ten-year forward-starting interest rate swap (the "2011 swap") locking in a treasury
rate of 2.63% with an aggregate notional amount of $175.0 million. This swap manages the risk associated with changes in treasury
rates and the impact of future interest payments. The 2011 swap relates to the interest payments for anticipated debt issuances.
Such anticipated debt issuances are expected to replace the outstanding debt maturing in July 2013. The 2011 swap is classified
as a cash flow hedge and had a negative fair value of $3.0 million at December 31, 2011.