The changes in value of the aluminum derivative contracts are recorded on the statement of financial position in accumulated other comprehensive income. Any ineffective portion is recorded in selling, general and administrative expenses. For 2011 and 2010, no ineffectiveness was recognized. Payments made or proceeds received upon the settlement of these contracts are recorded in cost of goods sold. Prices for aluminum fluctuate in response to changes in supply and demand, market uncertainty and a variety of other factors beyond the Company’s control. A US$100/MT increase (decrease) in the price of aluminum would have resulted in a $0.7 million (2010 – $0.5 million) decrease (increase) in other comprehensive income and no impact on the earnings from operations (2010 – nil) of the Company. This analysis assumes that all other variables, in particular foreign currency rates, remain constant. During 2006, the Company entered into cross-currency interest rate swap agreements (hedging items) that converted fixed rate unsecured U.S. dollar-denominated senior notes (hedged items) into Canadian dollar floating rate debt in order to reduce the Company’s exposure to the U.S. dollar debt and create a better balance between fixed and floating interest rate exposures. The fair values of the swaps are recorded in current and non-current liabilities when negative in value and current and non-current assets when positive in value. Change in fair value of the debt is accounted for in current and non-current liabilities and offsets the swap fair values on the income statement. No ineffectiveness has been recognized in the income statement as these are fully effective hedges. One of these swaps matured in July 2010. During 2003, the Company entered into an interest rate swap agreement (“IRSA”), the hedging item, in order to redistribute the Company’s exposure to fixed and floating interest rates with a view to reducing interest costs over the long term. The hedged item is 50% of a fixed rate unsecured U.S. dollar-denominated senior note. Fair value of this IRSA is recorded in current and non-current liabilities when negative in value and current and non-current assets when positive in value. Change in fair value of the debt is accounted for in current and non-current liabilities and offsets the IRSA’s fair values on the income statement. No ineffectiveness has been recognized in the income statement as this is a fully effective hedge. * There is an annual principal payment on this swap. Remaining principal amounts are US$4.7 million and C$5.4 million. * There is an annual principal payment on this swap. Remaining principal amount is US$4.7 million. During 2006, the Company entered into cross-currency interest rate swap agreement (“CCIRSAs”) the hedging items that converted Canadian dollar fixed rate and Canadian dollar floating rate debt into euro fixed rate debt and euro floating rate debt in order to hedge the Company’s exposure to its net investment in self-sustaining euro-denominated operations, with a view to reducing foreign exchange fluctuations and interest expense. Fair value of these CCIRSAs is recorded in current and non-current liabilities when negative in value and current and non-current assets when positive in value. The offset is recorded in other comprehensive income. These have been and continue to be 100% fully effective hedges as the notional amounts of the hedging items equal the portion of the net investment balance being hedged. No ineffectiveness has been recognized in the income statement. One of the swaps matured in July 2010. A second swap matured in March 2011. CCL Industries Inc. 2011 Annual Report 77 (c) Hedges of net investment in self-sustaining operations (b) Fair value hedges Notional principal amount Interest rate Fair value December 31 Fixed rate Floating rate Paid (CAD) Received (USD) 2011 (CAD) 2010 (CAD) Maturity Effective date US$31.0 million C$36.0 million 3-month BA + 1.67% 6.67% — — July 8, 2010 December 29, 2006 US$28.1 million* C$32.6 million 3-month BA + 2.01% 6.97% (539.5) (1,088.5) September 16, 2012 December 29, 2006 Interest rate Fair value December 31 Notional principal amount Currency Paid (USD) Received (USD) 2011 (CAD) 2010 (CAD) Maturity Effective date $42.1 million* US$ 3-month LIBOR + 2.97% 6.97% 110.9 376.9 September 16, 2012 December 16, 2003