Eli Lilly 2010 Annual Report Download - page 65

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FORM 10-K
The Effect of Risk-Management Instruments on the Statement of Operations
The following effects of risk-management instruments were recognized in other—net, expense:
2010 2009
Fair value hedges
Effect from hedged fixed-rate debt .................................................... $ 149.6 $(369.5)
Effect from interest rate contracts ..................................................... (149.6) 369.5
Cash flow hedges
Effective portion of losses on interest rate contracts reclassified from accumulated other
comprehensive loss ............................................................... 9.0 10.2
Net losses on foreign currency exchange contracts not designated as hedging instruments ...... 12.0 82.6
The effective portion of net losses on equity contracts in designated cash flow hedging relationships recorded in
other comprehensive income (loss) was $35.6 million for the year December 31, 2010. The effective portion of net
gains on interest rate contracts in designated cash flow hedging relationships recorded in other comprehensive
income (loss) was $0.0 and $38.0 million for the years ended December 31, 2010 and 2009, respectively.
We expect to reclassify $11.9 million of pretax net losses on cash flow hedges of the variability in expected future
interest payments on floating rate debt from accumulated other comprehensive loss to earnings during the next 12
months.
During the years ended December 31, 2010, 2009, and 2008, net losses related to ineffectiveness and net losses
related to the portion of our risk-management hedging instruments, fair value and cash flow hedges excluded from
the assessment of effectiveness were not material.
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