Medtronic 2012 Annual Report Download - page 74

Download and view the complete annual report

Please find page 74 of the 2012 Medtronic annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 152

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152

unrealized gain position of $49 million. A sensitivity analysis of changes in the fair value of all foreign
exchange rate derivative contracts at April 27, 2012 indicates that, if the U.S. dollar uniformly
strengthened/weakened by 10 percent against all currencies, the fair value of these contracts would
increase/decrease by approximately $485 million, respectively. Any gains and losses on the fair value of
derivative contracts would be largely offset by gains and losses on the underlying transactions. These
offsetting gains and losses are not reflected in the above analysis. We are also exposed to interest rate changes
affecting our investments in interest rate sensitive instruments, which include our fixed-to-floating interest
rate swap agreements. A sensitivity analysis of the impact on our interest rate sensitive financial instruments
of a hypothetical 10 percent change in short-term interest rates, compared to interest rates at April 27, 2012,
indicates that the fair value of these instruments would correspondingly change by $29 million.
We have investments in marketable debt securities that are classified and accounted for as available-
for-sale. Our debt securities include U.S. government and agency securities, foreign government and agency
securities, corporate debt securities, certificates of deposit, mortgage-backed securities, other asset-backed
securities, and auction rate securities. For a discussion of current market conditions and the impact on our
financial condition and results of operations, please see the “Liquidity and Capital Resources” section of
“Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this
Annual Report on Form 10-K.
For additional discussion of market risk, see Notes 6 and 10 to the consolidated financial statements in
“Item 8. Financial Statements and Supplementary Data” in this Annual Report on Form 10-K.
57