Derivative Instruments and Hedging Activities (Tables)

3 Months Ended

Mar. 31, 2013

Derivative Instruments and Hedging Activities

Schedule of fair value and balance sheet location of derivative instruments

	March 31, 2013
	Asset Derivatives				Liability Derivatives
	Balance Sheet				Balance Sheet
Instrument	Location		Fair Value		Location		Fair Value
Derivatives designated as hedging instruments:
Foreign exchange contracts*	Other current assets	$		107.3	Other current assets	$		51.7
	Other current liabilities		-		Other current liabilities		0.4
	Other non-current assets		56.9		Other non-current assets		16.8
	Other non-current liabilities		4.2		Other non-current liabilities		6.9
Interest rate swap agreements	Other current assets		4.4		Other current assets		-
	Other non-current assets		0.5		Other non-current assets		2.2
	Other non-current liabilities		-		Other non-current liabilities		6.9
Derivatives not designated as hedging instruments:
Foreign exchange contracts*	Other current assets		70.9		Other current assets		36.4
	Other current liabilities		4.7		Other current liabilities		12.1
Interest rate swap agreements
	Other non-current assets		2.3		Other non-current assets		-
Total		$		251.2		$		133.4
	December 31, 2012
	Asset Derivatives				Liability Derivatives
	Balance Sheet				Balance Sheet
Instrument	Location		Fair Value		Location		Fair Value
Derivatives designated as hedging instruments:
Foreign exchange contracts*	Other current assets		$	35.2	Other current assets		$	12.7
	Other current liabilities		9.1		Other current liabilities		31.4
	Other non-current assets		30.5		Other non-current assets		13.8
Interest rate swap agreements	Other current assets		0.1		Other current assets		-
	Other non-current assets		0.1		Other non-current assets		0.2
	Other non-current liabilities		-		Other non-current liabilities		0.6
Derivatives not designated as hedging instruments:
Foreign exchange contracts*	Other current assets		45.8		Other current assets		36.3
	Other current liabilities		10.4		Other current liabilities		21.4
Interest rate swap agreements	Other current assets		0.6		Other current assets		-
	Other non-current assets		1.7		Other non-current assets		-
Total			$	133.5			$	116.4

* Derivative instruments in this category are subject to master netting arrangements and are presented on a net basis in the Consolidated Balance Sheets in accordance with ASC 210-20.

Schedule of effect of derivative instruments not designated as hedging instruments on Consolidated Statements of Income

		Amount of Gain (Loss) Recognized in
	Location of Gain (Loss)	Income on Derivative
	Recognized in Income	Three-Month Periods Ended March 31,
Instrument	on Derivative	2013		2012
Foreign exchange contracts	Other income, net	$	38.7	$	(7.9)

Cash flow hedges

Derivative Instruments and Hedging Activities

Schedule of effect of derivative instruments designated as hedging instruments on Consolidated Statements of Income

		Three-Month Period Ended March 31, 2013
		Amount of Gain/(Loss) Recognized in OCI on Derivative (1)	Location of Gain/(Loss) Reclassified from Accumulated OCI into Income		Amount of Gain/(Loss) Reclassified from Accumulated OCI into Income	Location of Gain/(Loss) Recognized in Income on Derivative		Amount of Gain/(Loss) Recognized in Income on Derivative
Instrument		(Effective Portion)	(Effective Portion)		(Effective Portion)	(Ineffective Portion and Amount Excluded From Effectiveness Testing)		(Ineffective Portion and Amount Excluded From Effectiveness Testing)
Foreign exchange contracts	$	75.0	Net product sales	$	(6.4)	Other income, net	$	3.5	(2)
Treasury rate lock agreements	$	-	Interest Expense	$	(0.8)

(1) Net gains of $16.0 million are expected to be reclassified from Accumulated OCI into income in the next 12 months.

(2) The amount of net gains recognized in income represents $2.0 million in gains related to the ineffective portion of the hedging relationships and $1.5 million of gains related to amounts excluded from the assessment of hedge effectiveness.

		Three-Month Period Ended March 31, 2012
		Amount of Gain/(Loss) Recognized in OCI on Derivative	Location of Gain/(Loss) Reclassified from Accumulated OCI into Income		Amount of Gain/(Loss) Reclassified from Accumulated OCI into Income	Location of Gain/(Loss) Recognized in Income on Derivative		Amount of Gain/(Loss) Recognized in Income on Derivative
Instrument		(Effective Portion)	(Effective Portion)		(Effective Portion)	(Ineffective Portion and Amount Excluded From Effectiveness Testing)		(Ineffective Portion and Amount Excluded From Effectiveness Testing)
Foreign exchange contracts	$	23.5	Net product sales	$	19.1	Other income, net	$	(1.9)	(1)

(1) The amount of net losses recognized in income represents $4.4 million in losses related to the ineffective portion of the hedging relationships and $2.5 million of gains related to amounts excluded from the assessment of hedge effectiveness.

Fair value hedges

Derivative Instruments and Hedging Activities

Schedule of effect of derivative instruments designated as hedging instruments on Consolidated Statements of Income

			Amount of Gain (Loss) Recognized in
	Location of Gain (Loss)		Income on Derivative
	Recognized in Income		Three-Month Periods Ended March 31,
Instrument	on Derivative		2013		2012
Interest Rate Swaps	Interest expense	$	6.9	$	1.8

Foreign currency forward contracts

Derivative Instruments and Hedging Activities

Schedule of notional amount of derivative contracts

	Notional Amount
Foreign Currency	March 31, 2013		December 31, 2012
Australian Dollar	$	6.2	$	5.1
British Pound	87.7		77.9
Canadian Dollar	105.2		134.4
Euro	1,322.4		969.3
Japanese Yen	393.5		236.2
Total	$	1,915.0	$	1,422.9

Foreign currency option contracts

Derivative Instruments and Hedging Activities

Schedule of notional amount of derivative contracts

	Notional Amount*
Foreign Currency Option	March 31, 2013		December 31, 2012
Designated as hedging activity:
Purchased Put	$	139.0	$	228.8
Written Call	$	144.6	$	235.9
Not designated as hedging activity:
Purchased Put	$	131.0	$	160.5
Written Put	$	(131.0)	$	(216.0)

* U.S. Dollar notional amounts are calculated as the hedged local currency amount multiplied times the strike value of the foreign currency option.  The local currency notional amounts of our purchased put, and written call that are designated as hedging activity are equal to each other.

Interest rate swap contracts

Derivative Instruments and Hedging Activities

Schedule of notional amount of derivative contracts

	Notional Amount
	March 31, 2013		December 31, 2012
Interest rate swap contracts entered into as fair value hedges of the following fixed-rate senior notes:
2.450% senior notes due in 2015	$	400.0	$	-
1.900% senior notes due in 2017 (1)	500.0		100.0
3.250% senior notes due in 2022 (2)	1,000.0		200.0
Total	$	1,900.0	$	300.0

(1) $400.0 million was settled in April 2013 resulting in net proceeds received of $1.7 million, which is accounted for as a reduction of past and future interest expense associated with these notes.

(2) $400.0 million was settled in April 2013 resulting in net proceeds received of $4.5 million, which is accounted for as a reduction of past and future interest expense associated with these notes.