Medtronic 2014 Annual Report Download - page 105

Download and view the complete annual report

Please find page 105 of the 2014 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 147

  • 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

Medtronic, Inc.
Notes to Consolidated Financial Statements (Continued)
activities in the consolidated statements of cash flows. The gross notional amount of these contracts, not designated as hedging
instruments, outstanding at April 25, 2014 and April 26, 2013 was $2.202 billion and $2.059 billion, respectively.
The amount and location of the gains in the consolidated statements of earnings related to derivative instruments, not designated
as hedging instruments, for fiscal years 2014, 2013, and 2012 are as follows:
(in millions) Fiscal Year
Derivatives Not Designated as Hedging Instruments Location 2014 2013 2012
Foreign currency exchange rate contracts Other expense, net $ 15 $ 26 $ 53
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 2014, 2013, or 2012. No components of the hedge contracts were
excluded in the measurement of hedge ineffectiveness and no hedges were derecognized or discontinued during fiscal years
2014, 2013, or 2012. 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 25, 2014 and
April 26, 2013 was $5.849 billion and $4.753 billion, respectively, and will mature within the subsequent three-year period.
The amount of (losses) gains and location of the (losses) gains in the consolidated statements of earnings and other
comprehensive income (OCI) related to foreign currency exchange rate contract derivative instruments designated as cash flow
hedges for the fiscal years ended April 25, 2014, April 26, 2013, and April 27, 2012 are as follows:
April 25, 2014
(in millions)
Gross (Losses) Gains Recognized in OCI
on Effective Portion of Derivative
Effective Portion of (Losses) Gains on Derivative Reclassified
from AOCI into Income
Derivatives in Cash Flow Hedging
Relationships Amount Location Amount
Foreign currency exchange
rate contracts $ (152) Other expense, net $ 94
Cost of products sold (43)
Total $ (152) $ 51
April 26, 2013
(in millions)
Gross (Losses) Gains Recognized in OCI
on Effective Portion of Derivative
Effective Portion of (Losses) Gains on Derivative
Reclassified from AOCI 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
97