Nike 2010 Annual Report Download - page 87
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Table of Contents NIKE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
immediately in other (income) expense, net, on the income statement together with the transaction gain or loss from the hedged balance sheet position. The
Company classifies the cash flows at settlement from these undesignated hedges in the same category as the cash flows from the related hedged items,
generally within the cash provided by operations component of the cash flow statement.
The majority of derivatives outstanding as of May 31, 2010 are designated as either cash flow, fair value or net investment hedges under the
accounting standards for derivatives and hedging. All derivatives are recognized on the balance sheet at their fair value and classified based on the
instrument’s maturity date. The total notional amount of outstanding derivatives as of May 31, 2010 was $6.2 billion, which was primarily comprised of
cash flow hedges denominated in Euros, Japanese Yen and British Pounds.
The following table presents the fair values of derivative instruments included within the consolidated balance sheet as of May 31, 2010 and 2009:
Asset Derivatives Liability Derivatives
Balance Sheet
Classification May 31,
2010 May 31,
2009 Balance Sheet
Classification May 31,
2010 May 31,
2009
(In millions)
Derivatives formally designated as hedging instruments:
Foreign exchange forwards and options Prepaid expenses and
other current assets $ 315.9 $ 270.4 Accrued liabilities $ 24.7 $ 34.6
Interest rate swap contracts Prepaid expenses and
other current assets — 0.1 Accrued liabilities — —
Foreign exchange forwards and options Deferred income
taxes and other
assets
0.4 81.3 Deferred income
taxes and other
liabilities
0.1 —
Interest rate swap contracts Deferred income
taxes and other
assets
14.6 13.7 Deferred income
taxes and other
liabilities
— —
Total derivatives formally designated as hedging instruments 330.9 365.5 24.8 34.6
Derivatives not designated as hedging instruments:
Foreign exchange forwards and options Prepaid expenses and
other current assets $ 103.9 $ 12.8 Accrued liabilities $ 138.9 $ 34.3
Foreign exchange forwards and options Deferred income
taxes and other
assets
— 0.4 Deferred income
taxes and other
liabilities
1.4 —
Total derivatives not designated as hedging instruments 103.9 13.2 140.3 34.3
Total derivatives $ 434.8 $ 378.7 $ 165.1 $ 68.9
84