Medtronic 2012 Annual Report Download - page 115

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Medtronic, Inc.
Notes to Consolidated Financial Statements (Continued)
98
April 27, 2012 Asset Derivatives Liability Derivatives
_______________________________________ _______________________________________
(in millions) Balance Sheet Location Fair Value Balance Sheet Location Fair Value
___________ ______________________ _________ ______________________ _________
Derivatives designated as hedging instruments
Foreign currency exchange Prepaid expenses and
rate contracts other current assets $ 74 Other accrued expenses $ 33
Interest rate contracts Other assets 167 Other long-term liabilities 45
Foreign currency exchange
rate contracts Other assets 13 Other long-term liabilities 2
_______ _______
Total derivatives designated as
hedging instruments $254 $ 80
_______ _______
_______ _______
Derivatives not designated as hedging instruments
Foreign currency exchange Prepaid expenses and
rate contracts other current assets $ – Other accrued expenses $ 2
_______ _______
Total derivatives not designated
as hedging instruments $– $ 2
_______ _______
_______ _______
Total derivatives $ 254 $ 82
_______ _______
_______ _______
April 29, 2011 Asset Derivatives Liability Derivatives
_______________________________________ _______________________________________
(in millions) Balance Sheet Location Fair Value Balance Sheet Location Fair Value
___________ ______________________ _________ ______________________ _________
Derivatives designated as hedging instruments
Foreign currency exchange Prepaid expenses and
rate contracts other current assets $ 19 Other accrued expenses $ 235
Interest rate contracts Other assets 109
Foreign currency exchange
rate contracts Other assets 1 Other long-term liabilities 64
_______ _______
Total derivatives designated as
hedging instruments $ 129 $ 299
_______ _______
_______ _______
Derivatives not designated as hedging instruments
Foreign currency exchange Prepaid expenses and
rate contracts Other current assets $ 1 Other accrued expenses $ 4
_______ _______
Total derivatives not designated
as hedging instruments $ 1 $ 4
_______ _______
_______ _______
Total derivatives $ 130 $ 303
_______ _______
_______ _______
Concentrations of Credit Risk
Financial instruments, which potentially subject the Company to significant concentrations of credit
risk, consist principally of interest-bearing investments, foreign exchange derivative contracts, and trade
accounts receivable.
The Company maintains cash and cash equivalents, investments, and certain other financial instruments
(including currency exchange and interest rate derivative contracts) with various major financial institutions.
The Company performs periodic evaluations of the relative credit standings of these financial institutions
and limits the amount of credit exposure with any one institution. In addition, the Company has collateral
credit agreements with its primary derivative counterparties. Under these agreements, either party is
required to post eligible collateral when the market value of transactions covered by the agreement exceeds
specific thresholds, thus limiting credit exposure for both parties. As of April 27, 2012, no collateral was
posted by either the Company or its counterparties. As of April 29, 2011, the Company had $8 million in
securities pledged as collateral to its counterparties. The securities pledged as collateral are included in cash
and cash equivalents in the consolidated balance sheets.
Global concentrations of credit risk with respect to trade accounts receivable are limited due to the
large number of customers and their dispersion across many geographic areas. The Company monitors the