Ingram Micro 2011 Annual Report Download - page 74

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INGRAM MICRO INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(In 000s, except per share data)
Note 8 — Derivative Financial Instruments
The notional amounts and fair values of derivative instruments in our consolidated balance sheet were as follows:
Notional Amounts(1) Fair Value
December 31, January 1, December 31, January 1,
2011 2011 2011 2011
Derivatives designated as hedging
instruments recorded in:
Accrued expenses
Foreign exchange contracts .......... $ — $ 71,253 $ — $ (5,078)
Long-term debt
Interest rate swap contract ........... — 184,375 — (9,252)
— 255,628 — (14,330)
Derivatives not receiving hedge accounting
treatment recorded in:
Other current assets
Foreign exchange contracts .......... 552,677 347,108 10,689 585
Accrued expenses
Foreign exchange contracts .......... 574,018 726,187 (3,976) (11,428)
1,126,695 1,073,295 6,713 (10,843)
Total ............................ $1,126,695 $1,328,923 $ 6,713 $(25,173)
(1) Notional amounts represent the gross amount of foreign currency bought or sold at maturity for foreign
exchange contracts and the underlying principal amount in interest rate swap contract.
The amount recognized in earnings on our derivative instruments, including ineffectiveness, was a net gain
(loss) of $1,799, $6,874 and ($79,690) in 2011, 2010 and 2009, respectively, which was largely offset by the
change in the fair value of the underlying hedged assets or liabilities. The gains or losses on derivative
instruments are classified in our consolidated statement of income on a consistent basis with the classification of
the change in fair value of the underlying hedged assets or liabilities. Unrealized gains, net of taxes, of $0 and
$1,268 during 2011 and 2010, respectively, were reflected in accumulated other comprehensive income
associated with our cash flow hedging transactions.
Cash Flow Hedges
Our designated hedges have typically consisted of an interest rate swap to hedge variable interest rates on a
portion of our senior unsecured term loan, which we terminated upon repaying the underlying loan in September
2011 (see Note 6), and foreign currency forward contracts to hedge certain foreign currency-denominated
intercompany loans and anticipated management fees. There are no such designated hedges outstanding as of
December 31, 2011. We also use foreign currency forward contracts that are not designated as hedges primarily
to manage currency risk associated with foreign currency-denominated trade accounts receivable, accounts
payable and intercompany loans.
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