Medtronic 2015 Annual Report Download - page 111

Download and view the complete annual report

Please find page 111 of the 2015 Medtronic annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 166

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162
  • 163
  • 164
  • 165
  • 166

Medtronic plc
Notes to Consolidated Financial Statements (Continued)
The amount of gains (losses) and location of the gains (losses) in the consolidated statements of income and other
comprehensive income (OCI) related to foreign currency exchange rate contract derivative instruments designated as cash flow
hedges for the fiscal years ended April 24, 2015, April 25, 2014, and April 26, 2013 are as follows:
April 24, 2015
(in millions)
Gross Gains Recognized in OCI
on Effective Portion of Derivative
Effective Portion of Gains (Losses) on Derivative Reclassified
from AOCI into Income
Derivatives in Cash Flow Hedging
Relationships Amount Location Amount
Foreign currency exchange
rate contracts $ 707 Other expense, net $ 221
Cost of products sold (65)
Total $ 707 $ 156
April 25, 2014
(in millions)
Gross Losses Recognized in OCI
on Effective Portion of Derivative
Effective Portion of Gains (Losses) on Derivative Reclassified
from AOCI into Income
Derivatives in Cash Flow Hedging
Relationships Amount Location Amount
Foreign currency exchange
rate contracts $ (152) Other expense, net $ 94
Cost of products sold (43)
Total $ (152) $ 51
April 26, 2013
(in millions)
Gross Gains Recognized in OCI
on Effective Portion of Derivative
Effective Portion of Gains (Losses) on Derivative Reclassified
from AOCI into Income
Derivatives in Cash Flow Hedging
Relationships Amount Location Amount
Foreign currency exchange
rate contracts $ 121 Other expense, net $ 103
Cost of products sold (2)
Total $ 121 $ 101
Forecasted Debt Issuance Interest Rate Risk Forward starting interest rate derivative instruments designated as cash flow
hedges are designed to manage the exposure to interest rate volatility with regard to future issuances of fixed-rate debt. In
connection with the closing of the 2015 Senior Notes, the Company entered into forward starting interest rate derivatives with a
notional amount of $5.850 billion, these swaps were terminated upon the issuance of the 2015 Senior Notes. Upon termination,
there was no material ineffectiveness on the contracts which were in a net liability position, resulting in cash payment of $79
million. In February 2014, the Company terminated forward starting interest rate derivative instruments with a consolidated
notional amount of $250 million in conjunction with the issuance of the 2014 Senior Notes. Upon termination, there was no
material ineffectiveness on the contracts which were in a net liability position, resulting in cash payments of $8 million. As of
April 24, 2015, the Company had $800 million of fixed pay, forward starting interest rate swaps with a weighted average fixed
rate of 2.99 percent in anticipation of planned debt issuances.
For the fiscal years ended April 24, 2015 and April 25, 2014, the Company reclassified $11 million and $8 million, respectively,
of the effective portion of the net losses on forward starting interest rate derivative instruments from accumulated other
comprehensive loss to interest expense, net.
The market value of outstanding forward starting interest rate swap derivative instruments at April 24, 2015 and April 25, 2014
was an unrealized (loss) gain of $(71) million and $7 million, respectively.
101