Cardinal Health 2011 Annual Report Download - page 91

T
here was no ineffectiveness associated with these derivative instruments.
Cas
h
F
l
ow He
dg
e
s
We enter
i
nto
d
er
i
vat
i
ve
i
nstruments to
h
e
d
ge our exposure to c
h
anges
i
n cas
hfl
ows attr
ib
uta
bl
eto
currenc
y
, interest rate and commodit
y
price fluctuations associated with certain forecasted transactions. These
d
erivative instruments are designated and qualify as cash flow hedges. Accordingly, the effective portion of the
g
a
i
nor
l
oss on t
h
e
d
er
i
vat
i
ve
i
nstrument
i
s reporte
d
as a component o
f
ot
h
er compre
h
ens
i
ve
i
ncome (“OCI”) an
d
reclassified into earnin
g
s in the same line item associated with the forecasted transaction and in the same perio
d
d
uring which the hedged transaction affects earnings. The ineffective portion of the gain or loss on the derivative
i
nstrument
i
s recogn
i
ze
di
n earn
i
ngs
i
mme
di
ate
l
y.
We enter into forei
g
n currenc
y
contracts to protect the value of anticipated forei
g
n currenc
y
revenues and
expenses. At June 30, 2011 an
d
2010, we
h
e
ld
contracts to
h
e
d
ge pro
b
a
bl
e,
b
ut not
fi
rm
l
y comm
i
tte
d
, revenu
e
a
n
d
expenses. T
h
epr
i
nc
i
pa
l
currenc
i
es
h
e
d
ge
d
are t
h
e Cana
di
an
d
o
ll
ar, European euro, Mex
i
can peso an
d
T
h
a
i
baht
.
We enter
i
nto commo
di
ty contracts to manage t
h
epr
i
ce r
i
s
k
assoc
i
ate
d
w
i
t
hf
orecaste
d
purc
h
ases o
f
certa
i
n
commo
di
t
i
es use
di
n our Me
di
ca
l
se
g
ment.
T
he following table summarizes the outstanding cash flow hedges as of June 30, 2011 and 2010
:
J
une
30, 2011
June
30, 2010
(
in millions
)
N
otional
A
mount
M
aturity Dat
e
Notiona
l
Amount Maturity Date
Foreign currency contract
s
............
$
163.0 July 2011 – June 2012
$
145.7 July 2010 – June 2011
C
ommo
di
ty contracts
................
2
2.4 Ju
l
y 2011 – Marc
h
2014 24.2 Ju
l
y 2010 – June 2013
T
he followin
g
table summarizes the accumulated
g
ain/(loss) included in OCI for derivative instrument
s
d
es
i
gnate
d
as cas
hfl
ow
h
e
d
ges as o
f
June 30, 2011 an
d
2010
:
June
30,
(
in millions
)
2
0
1
1
2
0
1
0
Fore
i
gn currency contract
s
.......................................................
$(
1.8
)$
2.6
C
ommodit
y
contracts ........................................................... 2.
50
.
0
T
he following table summarizes the gain/(loss) reclassified from accumulated OCI into earnings for
d
er
i
vat
i
ve
i
nstruments
d
es
i
gnate
d
as cas
hfl
ow
h
e
d
ges
f
or
fi
sca
l
2011, 2010 an
d
2009
:
Fiscal Year Ended June 30,
(
in millions
)
S
tatements of Earnin
g
s Line Ite
m
201
1
2
01
0
2009
Pa
y
-
fi
xe
di
nterest rate swap
s
............
I
nterest expense, net $ 0.0 $ (2.1) $ (7.6
)
Forei
g
n currenc
y
contract
s
.............
R
evenue 0.3 0.0 0.
0
Fore
i
gn currency contract
s
............
.
C
ost of products sold (2.7) (10.5) 10.
9
Fore
i
gn currency contract
s
.............
SG&
A expenses
3
.
11
.
4(4
.
0)
C
ommodit
y
contracts
.................
S
G&A ex
p
enses 1.6 0.2 (0.6
)
Th
e amount o
fi
ne
ff
ect
iv
eness assoc
i
ate
dwi
t
h
t
h
ese
d
er
iv
at
iv
e
i
nstruments
w
as not mater
i
a
l
.
E
conomic (Non-desi
g
nated) Hed
g
e
s
F
oreign
C
urrency
.
We enter into forei
g
n currenc
y
contracts to mana
g
e our forei
g
n exchan
g
e exposure
related to intercompan
y
financin
g
transactions and other balance sheet items sub
j
ect to revaluation that do not
meet t
h
e requ
i
rements
f
or
h
e
d
ge account
i
ng treatment. Accor
di
ng
l
y, t
h
ese
d
er
i
vat
i
ve
i
nstruments are a
dj
uste
d
t
o
6
5