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The following table summarizes the gain/(loss) reclassified from accumulated OCI into earnings for
derivative instruments designated as cash flow hedges for fiscal 2010, 2009 and 2008
:
Fi
scal Year Ended June 30,
(
in millions) Statements of Earnings Location
20
1
0
2009
2
008
Pay-fixed interest rate swaps
............
I
nterest ex
p
ense, net
$
(2.1)
$
(7.6)
$
(3.0)
Foreign currency contracts
.............
Cost of
p
roducts sold (10.
5
) 10.9 (1
5
.2)
Foreign currency contracts
.............
SG&
Aex
p
enses
1
.
4(4
.
0) 2
.
3
Commodity contract
s
.................
S
G&A ex
p
enses 0.2 (0.
6
) 0.0
The amount of ineffectiveness associated with these derivative instruments was not material.
Economic (Non-designated) Hedges
We enter into foreign currency contracts to manage our foreign exchange exposure related to intercompan
y
f
inancing transactions and other balance sheet items subject to revaluation that do not meet the requirements fo
r
hedge accounting treatment. Accordingly, these derivative instruments are adjusted to current market value at the
end of each period through earnings. The gain or loss recorded on these instruments is substantially offset by th
e
r
emeasurement adjustment on the foreign currency denominated asset or liability. The settlement of the
derivative instrument and the remeasurement adjustment on the foreign currency denominated asset or liabilit
y
are both recorded in other (income)/expense, net at the end of each period. During fiscal 2010, we received cash
r
eceipts from a cross currency swap settlement totaling
$
42.5 million. These proceeds are classified as cas
h
p
rovided by operating activities in the consolidated statement of cash flows
.
The following table summarizes the economic (non-designated) derivative instruments outstanding as of
June 30, 2010 and 2009:
J
une 30, 201
0
June 30, 2009
(
in millions
)
Not
i
onal
A
moun
t
Matur
i
t
y
D
at
e
Not
i
onal
Amount Matur
i
ty Dat
e
Fore
ig
n currenc
y
contracts
...................
$472.6 Jul
y
2010 $531.3 Jul
y
2009 – December 201
3
T
h
e
f
o
ll
ow
i
n
g
ta
bl
e summar
i
zes t
h
e
g
a
i
n/(
l
oss) reco
g
n
i
ze
di
n earn
i
n
g
s
f
or econom
i
c (non-
d
es
ig
nate
d
)
d
er
i
vat
i
ve
i
nstruments
f
or
fi
sca
l
2010, 2009 an
d
2008:
F
i
scal Year Ended June 30
,
(
in millions
)
S
tatements of Earnings Location
2010
2009
2008
Fore
ig
n currenc
y
contracts
...........
O
ther income/expense, net $23.7 $(8.6) $5.
1
Fair Va
l
ue of Financia
l
Instruments
The carr
y
in
g
amounts of cash and equivalents, trade receivables, accounts pa
y
able, other short-ter
m
borrowin
g
s and other accrued liabilities at June 30, 2010 and 2009 approximate their fair value because of the
short-term maturities of these items
.
Cash balances are invested in accordance with our investment polic
y
. These investments are exposed t
o
market risk from interest rate fluctuations and credit risk from the underl
y
in
g
issuers, althou
g
h this is miti
g
ated
throu
g
h diversification.
68