Derivative Instruments and Hedging Activities (Tables)

9 Months Ended

Sep. 30, 2013

Derivative Instruments and Hedging Activities

Schedule of fair value and balance sheet location of derivative instruments



	September 30, 2013
	Asset Derivatives			Liability Derivatives
Instrument	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Derivatives designated as hedging instruments:
Foreign exchange contracts*	Other current assets	$	62.6	Other current assets	$	24.7
	Other current liabilities	35.2		Other current liabilities	70.5
	Other non-current assets	31.4		Other non-current assets	19.5
	Other non-current liabilities	0.9		Other non-current liabilities	17.4
Interest rate swap agreements	Other current assets	11.4		Other current assets	—
	Other non-current assets	0.3		Other non-current assets	—
	Other non-current liabilities	—		Other non-current liabilities	44.8
Derivatives not designated as hedging instruments:
Foreign exchange contracts*	Other current assets	20.0		Other current assets	6.2
	Other current liabilities	5.5		Other current liabilities	27.5
	Other non-current assets	1.1		Other non-current assets	—
Interest rate swap agreements	Other non-current assets	1.6		Other non-current assets	—
Total		$	170.0		$	210.6

	December 31, 2012
	Asset Derivatives			Liability Derivatives
Instrument	Balance Sheet Location	Fair Value		Balance Sheet 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
Foreign exchange contracts*	Other current liabilities	10.4		Other current liabilities	21.4
Interest rate swap agreements	Other current assets	0.6		Other current assets	—
Interest rate swap agreements	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.

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 September 30, 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	$	(89.8	)	Net product sales	$	11.9		Other income, net	$	5.1	(2)
Treasury rate lock agreements	$	—		Interest expense	$	(0.9	)

⁽¹⁾Net losses of $1.9 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 $5.3 million of gains related to amounts excluded from the assessment of hedge effectiveness and $0.2 million of losses related to the ineffective portion of the hedging relationships.



	Three-Month Period Ended September 30, 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	$	(24.5	)	Net product sales	$	24.8		Other income, net	$	(1.7	)	(1)
Treasury rate lock agreements	$	(3.5	)	Interest expense	$	(0.5	)

⁽¹⁾ The amount of net losses recognized in income represents $2.2 million in losses related to the ineffective portion of the hedging relationships and $0.5 million of gains related to amounts excluded from the assessment of hedge effectiveness.



	Nine-Month Period Ended September 30, 2013
	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	$	(3.2	)	Net product sales	$	7.6		Other income, net	$	9.0	(1	)
Treasury rate lock agreements	$	—		Interest expense	$	(2.5	)

⁽¹⁾ The amount of net gains recognized in income represents $1.7 million in gains related to the ineffective portion of the hedging relationships and $7.3 million of gains related to amounts excluded from the assessment of hedge effectiveness.



	Nine-Month Period Ended September 30, 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	$	43.3		Net product sales	$	62.8		Other income, net	$	(3.4	)	(1)
Treasury rate lock agreements	$	(35.3	)	Interest expense	$	(0.5	)

⁽¹⁾ The amount of net losses recognized in income represents $7.5 million in losses related to the ineffective portion of the hedging relationships and $4.1 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 Income on Derivative
	Location of Gain (Loss) Recognized in Income	Three-Month Periods Ended September 30,				Nine-Month Periods Ended September 30,
Instrument	on Derivative	2013		2012		2013		2012
Interest rate swap agreements	Interest expense	$	9.8	$	2.0	$	21.8	$	5.6



		Amount of Gain (Loss) Recognized in Income on Derivative
	Location of Gain (Loss) Recognized in Income	Three-Month Periods Ended September 30,						Nine-Month Periods Ended September 30,
Instrument	on Derivative	2013			2012			2013			2012
Foreign exchange contracts	Other income, net	$	(27.0	)	$	(11.5	)	$	(42.2	)	$	4.5
Treasury rate lock agreements	Other income, net	$	—		$	—		$	—		$	3.7

Foreign currency forward contracts

Derivative Instruments and Hedging Activities

Schedule of notional amount of derivative contracts



	Notional Amount
Foreign Currency	September 30, 2013		December 31, 2012
Australian Dollar	$	53.7	$	5.1
British Pound	313.8		77.9
Canadian Dollar	84.7		134.4
Euro	2,425.3		969.3
Japanese Yen	703.2		236.2
Total	$	3,580.7	$	1,422.9

Foreign currency option contracts

Derivative Instruments and Hedging Activities

Schedule of notional amount of derivative contracts



	Notional Amount*
Foreign Currency Option	September 30, 2013			December 31, 2012
Designated as hedging activity:
Purchased Put	$	24.3		$	228.8
Written Call	$	25.4		$	235.9
Not designated as hedging activity:
Purchased Put	$	22.7		$	160.5
Written Put	$	(22.7	)	$	(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
	September 30, 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 2015	$	300.0	$	—
1.900% senior notes due 2017	300.0		100.0
3.950% senior notes due 2020	500.0		—
3.250% senior notes due 2022	850.0		200.0
4.000% senior notes due 2023	50.0		—
Total	$	2,000.0	$	300.0

- Definition

Tabular disclosure of the location and amount of gains and losses reported in the statement of financial performance, or when applicable, the statement of financial position. For example, (a) gains and losses recognized in the income statement on derivative instruments designated and qualifying as hedging instruments in fair value hedges and related hedged items designated and qualifying in fair value hedges and (b) gains and losses initially recognized in other comprehensive income on derivative instruments designated and qualifying as cash flow hedges.

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- Definition

Tabular disclosure of the location and fair value amounts of derivative instruments (and nonderivative instruments that are designated and qualify as hedging instruments) reported in the statement of financial position.

+ References+ Details