Eli Lilly 2012 Annual Report Download - page 72

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60
The Effect of Risk Management Instruments on the Statement of Operations
The following effects of risk-management instruments were recognized in other—net, (income) expense:
2012 2011 2010
Fair value hedges
Effect from hedged fixed-rate debt. . . . . . . . . . . . . . . . . . . . . . . . . . $ 51.5 $ 259.6 $ 149.6
Effect from interest rate contracts. . . . . . . . . . . . . . . . . . . . . . . . . . (51.5) (259.6) (149.6)
Cash flow hedges
Effective portion of losses on interest rate contracts reclassified
from accumulated other comprehensive loss . . . . . . . . . . . . . . . 9.0 9.0 9.0
Net (gains) losses on foreign currency exchange contracts not
designated as hedging instruments . . . . . . . . . . . . . . . . . . . . . . . . (35.8)97.4 12.0
The effective portion of net gains (losses) on equity contracts in designated cash flow hedging relationships
recorded in other comprehensive income (loss) was $0.0 million, $35.6 million, and $(35.6) million for the
years ended December 31, 2012, 2011, and 2010, respectively. There have been no equity contracts in
designated cash flow hedging relationships in 2012.
During the next 12 months, we expect to reclassify from accumulated other comprehensive loss to earnings
$9.0 million of pretax net losses on cash flow hedges of the variability in expected future interest payments on
our floating rate debt.
During the years ended December 31, 2012, 2011, and 2010, net losses related to ineffectiveness, as well as
net losses related to the portion of our risk-management hedging instruments, fair value hedges, and cash
flow hedges that were excluded from the assessment of effectiveness, were not material.