Other Income, Net

12 Months Ended

Jun. 30, 2011

Other Income, Net

Other Income, Net

NOTE 2.  OTHER INCOME, NET

Other income, net consists of the following:

Years ended June 30,	2011	2010	2009
Interest income on corporate funds	$            (88.8)	$            (98.8)	$          (134.2)
Realized gains on available-for-sale securities	(38.0)	(15.0)	(11.4)
Realized losses on available-for-sale securities	3.6	13.4	23.8
Realized (gain) on investment in Reserve Fund	(0.9)	(15.2)	18.3
Impairment losses on available-for-sale securities	-	14.4	-
Impairment losses on assets held for sale	11.7	-	-
Net (gains) losses on sales of buildings	(1.8)	2.3	(2.2)
Other, net	(2.4)	(2.3)	(2.3)
Other income, net	$          (116.6)	$          (101.2)	$          (108.0)

Proceeds from sales and maturities of available-for-sale securities were $3,305.1 million, $3,406.9 million, and $3,320.4 million for fiscal 2011, 2010, and 2009, respectively.

In fiscal 2009, the net asset value of the Primary Fund of the Reserve Fund ("Reserve Fund") decreased below $1 per share as a result of the full write-off of the Reserve Fund's holdings in debt securities issued by Lehman Brothers Holdings, Inc., which filed for bankruptcy protection on September 15, 2008.  In fiscal 2009, the Company recorded a loss of $18.3 million to other income, net on the Statements of Consolidated Earnings to recognize it's pro-rata share of the estimated losses of the investment it held in the Reserve Fund.  During fiscal 2010 and 2011, the Company received distributions from the Reserve Fund in excess of what was previously recorded in short-term marketable securities and as such, recorded gains of $15.2 million and $0.9 million, respectively, to other income, net on the Statements of Consolidated Earnings. 

In fiscal 2010, the Company concluded it had the intent to sell certain securities for which unrealized losses of $14.4 million were previously recorded in accumulated other comprehensive income on the Consolidated Balance Sheets.  As such, the Company realized impairment losses of $14.4 million in other income, net on the Statements of Consolidated Earnings during fiscal 2010. The Company subsequently sold all securities that the Company previously concluded it had the intent to sell. 

During fiscal years 2011, 2010, and 2009, the Company sold buildings that were previously classified as Assets Held for Sale on the Consolidated Balance Sheets and, as a result, recorded net gains/(losses) of $1.8 million, ($2.3) million, and $2.2 million, respectively, in other income, net on the Statements of Consolidated Earnings.  During fiscal 2011, the Company reclassified assets related to two buildings as Assets Held for Sale on the Consolidated Balance Sheets. As the carrying amount of the assets held for sale exceeded their fair value less costs to sell, the Company recorded impairment losses of $11.7 million. Refer to Note 9 for more information related to Assets Held for Sale.

The Company has an outsourcing agreement with Broadridge Financial Solutions, Inc. ("Broadridge") pursuant to which the Company provides data center outsourcing services, which principally consist of information technology services and service delivery network services.  As a result of this agreement, the Company recognized income of $113.0 million and $104.8 million in fiscal 2011 and fiscal 2010, respectively, which is offset by expenses associated with providing such services of $110.8 million and $102.6 million, respectively, both of which were recorded in other income, net on the Statements of Consolidated Earnings.  The Company had a receivable on the Consolidated Balance Sheets from Broadridge for the services under this agreement of $9.5 million and $8.9 million on June 30, 2011 and 2010, respectively.  In fiscal 2010, Broadridge notified the Company that it would not extend the outsourcing agreement beyond its current expiration date of June 30, 2012.  The Company continues to assess the impact on results of operations, if any, that this will have and does not currently anticipate this will have a material impact.