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This excerpt taken from the LLY 10-K filed Feb 22, 2010. Note 15: Other
Comprehensive Income (Loss)
The accumulated balances related to each component of other
comprehensive income (loss) were as follows:
The amounts above are net of income taxes. The income taxes
associated with the unrecognized net actuarial losses and prior
service costs on our defined benefit pension and retiree health
benefit plans (Note 13) were a benefit of
$92.4 million for 2009. The income taxes associated with
the unrealized gains (losses) on securities was an expense of
$103.2 million for 2009. The income taxes related to the
other components of comprehensive income (loss) were not
significant, as income taxes were not provided for foreign
currency translation.
The unrealized gains (losses) on securities is net of
reclassification adjustments of net gains (losses) of
$19.0 million, $(1.7) million, and $5.8 million,
net of tax, in 2009, 2008, and 2007, respectively, for net
realized gains (losses) on sales of securities included in net
income. The effective portion of cash flow hedges is net of
reclassification adjustments of zero, $9.6 million, and
$8.8 million, net of tax, in 2009, 2008, and 2007,
respectively, for realized losses on foreign currency options
and $6.7 million, $7.9 million, and
$11.6 million, net of tax, in 2009, 2008, and 2007,
respectively, for interest expense on interest rate swaps
designated as cash flow hedges.
Generally, the assets and liabilities of foreign operations are
translated into U.S. dollars using the current exchange
rate. For those operations, changes in exchange rates generally
do not affect cash flows; therefore, resulting translation
adjustments are made in shareholders’ equity rather than in
income.
75
Management’s
Reports
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