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This excerpt taken from the LLY 10-K filed Feb 22, 2010. The Effect of
Risk-Management Instruments on the Statement of
Operations
Both the gains on the hedged fixed-rate debt and the offsetting
losses on the related interest rate swaps for 2009 were
$369.5 million. All of these amounts net to zero and are
included in
other-net,
expense (income).
We expect to reclassify $12.0 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.
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Other-net,
expense (income) for 2009 includes the effective portion of
losses on interest rate contracts in designated cash flow
hedging relationships reclassified from accumulated other
comprehensive loss into income of $10.2 million, and the
net gains on foreign exchange contracts not designated as
hedging instruments recognized in income of $43.4 million.
The effective portions of net gains on interest rate contracts
in designated cash flow hedging relationships recorded in other
comprehensive income (loss) for 2009 was $38.0 million.
During the years ended December 31, 2009, 2008, and 2007,
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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