Medtronic 2013 Annual Report Download - page 107

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75732me_10K.indd 92 6/25/13 6:39 PM
Table of Contents
Medtronic, Inc.
Notes to Consolidated Financial Statements (Continued)
The amount of gains (losses) and location of the gains (losses) in the consolidated statements of earnings related to derivative
instruments not designated as hedging instruments for fiscal years 2013, 2012, and 2011 are as follows:
(in millions) Fiscal Year
Derivatives Not Designated as Hedging Instruments Location 2013 2012 2011
Foreign currency exchange rate contracts Other expense, net $ 26 $ 53 $ (107)
Cash Flow Hedges
Foreign Currency Exchange Rate Risk Forward contracts designated as cash flow hedges are designed to hedge the variability
of cash flows associated with forecasted transactions denominated in a foreign currency that will take place in the future. For
derivative instruments that are designated and qualify as a cash flow hedge, the effective portion of the gain or loss on the derivative
is reported as a component of accumulated other comprehensive loss and reclassified into earnings in the same period or periods
during which the hedged transaction affects earnings. No gains or losses relating to ineffectiveness of cash flow hedges were
recognized in earnings during fiscal years 2013, 2012, or 2011. No components of the hedge contracts were excluded in the
measurement of hedge ineffectiveness and no hedges were derecognized or discontinued during fiscal years 2013, 2012, or 2011.
The cash flows from these contracts are reported as operating activities in the consolidated statements of cash flows. The gross
notional amount of these contracts, designated as cash flow hedges, outstanding at April 26, 2013 and April 27, 2012 was $4.753
billion and $3.097 billion, respectively, and will mature within the subsequent two-year period.
The amount of gains (losses) and location of the gains (losses) in the consolidated statements of earnings and other comprehensive
income (OCI) related to derivative instruments designated as cash flow hedges for the fiscal years ended April 26, 2013, April 27,
2012, and April 29, 2011 are as follows:
April 26, 2013
Gross Gains (Losses) Recognized in OCI Effective Portion of Gains (Losses) on Derivative Reclassified from
(in millions) on Effective Portion of Derivative Accumulated Other Comprehensive Loss into Income
Derivatives in Cash Flow Hedging
Relationships Amount Location Amount
Foreign currency exchange
rate contracts $ 121 Other expense, net $ 103
Cost of products sold (2)
Total $ 121 $ 101
April 27, 2012
Gross Gains (Losses) Recognized in OCI Effective Portion of Gains (Losses) on Derivative Reclassified from
(in millions) on Effective Portion of Derivative Accumulated Other Comprehensive Loss into Income
Derivatives in Cash Flow Hedging
Relationships Amount Location Amount
Foreign currency exchange
rate contracts $ 332 Other expense, net $ (141)
Cost of products sold 14
Total $ 332 $ (127)
April 29, 2011
Gross Gains (Losses) Recognized in OCI Effective Portion of Gains (Losses) on Derivative Reclassified from
(in millions) on Effective Portion of Derivative Accumulated Other Comprehensive Loss into Income
Derivatives in Cash Flow Hedging
Relationships Amount Location Amount
Foreign currency exchange
rate contracts $ (530) Other expense, net $ 50
Cost of products sold 31
Total $ (530) $ 81
Forecasted Debt Issuance Interest Rate Risk Forward starting interest rate derivative instruments designated as cash flow
hedges are designed to manage the exposure to interest rate volatility with regard to future issuances of fixed-rate debt. For forward
89