Ingram Micro 2010 Annual Report Download - page 69

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liabilities of $2,036, including interest, for previously recorded unrecognized tax benefits ultimately realized.
During the second quarter of 2010, the IRS initiated an examination of our federal income tax returns for tax years
2007 through 2009, and in the third quarter of 2010, the statute of limitations lapsed on tax year 2006.
It is possible that within the next twelve months, ongoing tax examinations in the U.S. states and several of our
foreign jurisdictions may be resolved, that new tax exams may commence and that other issues may be effectively
settled. However, we do not expect our unrecognized tax benefits to change significantly over that time.
Note 8 — Derivative Financial Instruments
The notional amounts and fair values of derivative instruments in our consolidated balance sheet were as
follows:
January 1,
2011
January 2,
2010
January 1,
2011
January 2,
2010
Notional Amounts(1) Fair Value
Derivatives designated as hedging instruments
recorded in:
Accrued expenses
Foreign exchange contracts .......... $ 71,253 $ 426,707 $ (5,078) $ (6,484)
Long-term debt
Interest rate swap contracts .......... 184,375 196,875 (9,252) (9,662)
255,628 623,582 (14,330) (16,146)
Derivatives not receiving hedge accounting
treatment recorded in:
Other current assets
Foreign exchange contracts .......... 347,108 198,634 585 1,678
Accrued expenses
Foreign exchange contracts .......... 726,187 951,782 (11,428) (12,566)
1,073,295 1,150,416 (10,843) (10,888)
Total ............................ $1,328,923 $1,773,998 $(25,173) $(27,034)
(1) Notional amounts represent the gross amount of foreign currency bought or sold at maturity for foreign
exchange contracts and the underlying principal amount in interest rate swap contracts.
The amount recognized in earnings on our derivative instruments, including ineffectiveness, was a net gain
(loss) of $6,874 and ($79,690) in 2010 and 2009, respectively, which was largely offset by the change in the fair
value of the underlying hedged assets or liabilities. The gains or losses on derivative instruments are classified in our
consolidated statement of income on a consistent basis with the classification of the change in fair value of the
underlying hedged assets or liabilities. Unrealized gains (losses) of $1,268, net of taxes, and ($5,134), net of taxes,
during 2010 and 2009, respectively, were reflected in accumulated other comprehensive income in our consolidated
balance sheet for losses associated with our cash flow hedging transactions.
Cash Flow Hedges
We have designated hedges consisting of an interest rate swap to hedge variable interest rates on a portion of
our senior unsecured term loan and foreign currency forward contracts to hedge certain foreign currency-
denominated intercompany loans and anticipated management fees. In addition, we also use foreign currency
61
INGRAM MICRO INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)