Canon 2008 Annual Report Download - page 60

58
E
quit
y
price risk
Canon holds marketable securities included in current assets
,
which consist
g
enerall
y
o
f
hi
g
hl
y
-liquid and low-risk instruments.
Investments inc
l
u
d
e
d
in noncurrent assets are
h
e
ld
as
l
ong-term
inv
est
m
e
n
ts
.
Ca
n
o
n
does
n
ot
h
o
l
d
m
a
rk
etab
l
e
secu
ri
t
i
es
a
n
d
investments
f
or tradin
g
purposes
.
M
atu
ri
t
i
es
a
n
d
f
a
ir v
a
l
ues
o
f
suc
h m
a
rk
etab
l
e
secu
ri
t
i
es
a
n
d
investments with original maturities of more than three months
were as
f
ollows at December 31
,
2008
.
A
vailable-
f
or-sale securitie
s
M
illions o
f
ye
n
T
housands o
f
U.S. dollar
s
Cost
F
a
ir v
a
l
ue
Cost
F
a
ir v
a
l
ue
Due within one
y
ea
r
¥
134
¥
150
$
1
,47
3
$
1
,
6
4
8
Due a
f
ter one year through
fi
ve year
s
3,54
2
3,426 38,923 37,648
Due after fi ve
y
ears throu
g
h ten
y
ears
8
4
8
8
1
1
9,3
1
8
8,9
1
2
E
qu
i
t
y
secur
i
t
i
e
s
1
0
,5
22
1
2
,
2
1
8
115,
627
1
3
4,
264
¥15,04
6
¥16,605 $165,34
1
$
182,472
F
orei
g
n currenc
y
exchan
g
e rate and interest
rate risk
Canon operates internationall
y
, exposin
g
it to the risk o
f
chan
g
es
in foreign currency exchange rates. Derivative fi nancial instruments
are comprised principally of foreign currency exchange contracts
utilized by the Company and certain o
f
its subsidiaries to reduce
the risk. Canon assesses
f
orei
g
n currenc
y
exchan
g
e rate risk b
y
continua
lly
monitorin
g
c
h
an
g
es in t
h
e exposures an
d
by
eva
l
uat
-
ing
h
e
d
ging opportunities. Canon
d
oes not
h
o
ld
or issue
d
eriva
-
tive
fi
nancial instruments
f
or trading purposes. Canon is also
exposed to credit-related losses in the event o
f
non-per
f
ormance
b
y
counterparties to derivative
fi
nancial instruments, but it is not
expected that any counterparties will fail to meet their obligations.
Most of the counterparties are internationally recognized fi nancial
institutions and selected by Canon taking into account their
fi
nancial condition
,
and contracts are diversi
fi
ed across a number
of ma
j
or fi nancial institutions
.
Canon’s international operations expose Canon to the risk o
f
chan
g
es in forei
g
n currenc
y
exchan
g
e rates. Canon uses forei
g
n
exchange contracts to manage certain foreign currency exchange
exposures principally
f
rom the exchange o
f
U.S. dollars and
euros into Japanese
y
en. These contracts are primaril
y
used to
hed
g
e the forei
g
n currenc
y
exposure of forecasted intercompan
y
sa
l
es an
d
intercompany tra
d
e receiva
bl
es w
h
ic
h
are
d
enominate
d
in foreign currencies. In accordance with Canon’s policy, a specifi c
portion o
f
f
orei
g
n currenc
y
exposure resultin
g
f
rom
f
orecasted
intercompan
y
sales are hed
g
ed usin
g
f
orei
g
n exchan
g
e contracts
w
h
ic
h
principa
ll
y mature wit
h
in t
h
ree mont
h
s
.
The following table provides information about Canon’s
major derivative
fi
nancial instruments related to
f
oreign currency
exchan
g
e transactions existin
g
at December 31, 2008. All o
f
the
forei
g
n exchan
g
e contracts described in the followin
g
table have
a contractua
l
maturity
d
ate in 2009
.
M
illions o
f
ye
n
U.S.
$
E
uro Ot
h
ers Tota
l
Forwards to sell
f
oreign currencies:
C
ontract amounts ¥179
,
23
9
¥152
,
42
3
¥19
,
29
7
¥350
,
959
Est
im
ated
f
a
ir v
a
l
ue
8
,
391
(1,390
)
71
0
7
,
711
Forwards to buy
f
oreign currencies
:
C
ontract amounts
¥
2
4
,
518
¥
1,
00
0
¥
9
,
72
9
¥
35
,
247
Est
im
ated
f
a
ir v
a
l
ue
(9)
7
2
,1
29
2
,1
2
7
T
housands o
f
U.S. dollar
s
U
.S.$
E
uro Ot
h
ers Tota
l
Forwards to sell
f
oreign currencies:
C
ontract amounts
$
1
,
969
,
65
9
$
1
,
674
,
97
8
$
212
,
05
5
$
3
,
856
,
69
2
Est
im
ated
f
a
ir v
a
l
ue
92
,
209
(15,275
)
7,
802
8
4,7
36
Forwards to buy
f
oreign currencies
:
C
ontract amounts
$
269
,
42
9
$
10
,
989
$
106
,
91
2
$
387
,
330
Est
im
ated
f
a
ir v
a
l
ue
(99)
77
23
,
395
23
,
3
7
3