Cardinal Health 2011 Annual Report Download - page 90

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major financial institutions that are investment grade or better. We do not have significant exposure to any on
e
counterparty; management
b
e
li
eves t
h
er
i
s
k
o
fl
oss
i
s remote an
d
,
i
n any event, wou
ld
not
b
e mater
i
a
l.
Additionall
y
, we do not require collateral under these a
g
reements
.
Th
e
f
o
ll
ow
i
ng ta
bl
e summar
i
zes t
h
e
f
a
i
rva
l
ue o
f
our assets an
dli
a
bili
t
i
es re
l
ate
d
to
d
er
i
vat
i
ve
fi
nanc
i
a
l
instruments, and the respective line items in which the
y
were recorded in the consolidated balance sheets as o
f
J
une 30, 2011 and 2010:
(
in millions
)
B
alance
S
heets Line Ite
m
J
une
30,
2011
J
une
30,
2010
Assets
:
Der
i
vat
i
ves
d
es
i
gnate
d
as
h
e
d
g
i
ng
i
nstruments
:
P
a
y
-floatin
g
interest rate swap
s
........
P
repaid expenses and other $32.4 $23.4
Forei
g
n currenc
y
contracts
............
P
re
p
aid ex
p
enses and other 0.8 3.
9
Commo
di
ty contracts ...............
.
P
repaid expenses and other 2.5 0.0
Tota
l
assets
.
..........................
.
$
35.7
$
27.3
Liabilities:
Der
i
vat
i
ves
d
es
i
gnate
d
as
h
e
d
g
i
ng
i
nstruments
:
Forei
g
n currenc
y
contracts
............
D
eferred income taxes and other liabilities $ 2.9 $ 1.1
Derivatives not designated as hedgin
g
i
nstruments:
Commodit
y
contracts
................
O
ther accrued liabilities 0.7 0.0
T
ota
lli
a
bili
t
i
es .........................
$
3.6
$
1.1
Fair Value Hedge
s
We enter into pa
y
-floatin
g
interest rate swaps to hed
g
e the chan
g
es in the fair value of fixed-rate debt
resu
l
t
i
ng
f
rom
fl
uctuat
i
ons
i
n
i
nterest rates. T
h
ese contracts are
d
es
i
gnate
d
an
d
qua
lif
yas
f
a
i
rva
l
ue
h
e
d
ges
.
Accor
di
n
gly
,t
h
e
g
a
i
nor
l
oss recor
d
e
d
on t
h
epa
y
-
fl
oat
i
n
gi
nterest rate swaps
i
s
di
rect
ly
o
ff
set
by
t
h
ec
h
an
g
e
i
n
f
air value of the underl
y
in
g
debt. Both the derivative instrument and the underl
y
in
g
debt are ad
j
usted to market
v
a
l
ue at t
h
een
d
o
f
eac
h
per
i
o
d
w
i
t
h
any resu
l
t
i
ng ga
i
nor
l
oss recor
d
e
di
n
i
nterest expense, net
i
nt
h
e
consolidated statements of earnin
g
s.
D
ur
i
ng
fi
sca
l
2011 an
d
2010, we entere
di
nto pay-
fl
oat
i
ng
i
nterest rate swaps w
i
t
h
tota
l
not
i
ona
l
va
l
ues o
f
$
250.0 million and $1.0 billion, respectivel
y
. The fair value of these pa
y
-floatin
g
interest rate swaps is include
d
in the consolidated balance sheet as of June 30, 2011 and 2010
.
Th
e
f
o
ll
ow
i
n
g
ta
bl
e summar
i
zes t
h
e
i
nterest rate swaps
d
es
ig
nate
d
as
f
a
i
rva
l
ue
h
e
dg
es outstan
di
n
g
as o
f
J
une 30, 2011 and 2010:
J
une
30, 2011
June
30, 2010
(
in millions
)
Not
i
onal
Am
ou
n
t
M
aturity Date
Not
i
ona
l
Am
ou
n
t
M
aturity Dat
e
Pay-floating interest rate swaps . .
$
1,256.0 June 2012 – December 2020
$
1,006.0 June 2012 – June 2015
T
he followin
g
table summarizes the
g
ain/(loss) reco
g
nized in earnin
g
s for interest rate swaps desi
g
nated as
f
a
i
rva
l
ue
h
e
d
ges
f
or
fi
sca
l
2011, 2010 an
d
2009:
F
iscal Year Ended June 30
,
(
in millions
)
S
tatements of Earnin
g
s Line Ite
m
201
1
2010
2
00
9
Pa
y
-
fl
oat
i
n
gi
nterest rate swap
s
.........
Interest expense, net
$
36.2
$
47.3
$
21.6
Fix
ed
-r
ate debt
......................
Interest ex
p
ense, net (36.2) (47.3) (21.6)
6
4