Canon 2008 Annual Report Download - page 91

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89
A r
eco
n
c
ili
at
i
o
n
o
f
t
h
e
n
u
m
e
r
ato
r
s
a
n
d
de
n
o
min
ato
r
s
o
f
bas
i
c
and diluted net income per share computations is as follows
:
19. Net Income per Shar
e
Y
ea
r
s
e
n
ded
D
ece
m
be
r 31
Millions of
y
e
n
T
h
ousa
n
ds
of
U
.
S
.
do
ll
a
r
s
2008
2
00
7
2
00
6
2008
Net income ¥ 309,148 ¥ 488,33
2
¥ 455,32
5
$ 3,397,231
Eff
ect o
f
dilutive securities:
1.30% Japanese
y
en convertible debentures,
due
200
8
2
4
8
22
Dil
uted
n
et
in
co
m
e
¥ 309,150 ¥ 4
88
,
336
¥ 455,
333
$ 3,397,253
N
umber o
f
shares
A
vera
g
e common shares outstandin
g
1,255,626,490 1,
293
,
29
5,
680
1,
33
1,54
2
,
0
7
4
Eff
ect o
f
dilutive securities:
1.30% Japanese
y
en convertible debentures,
d
ue 200
8
79,929 221
,
75
1
474
,
79
6
Diluted common shares outstandin
g
1,255,706,419 1,
293
,517,4
31
1,
332
,
0
1
6
,
8
7
0
Y
en
U
.S.
d
o
ll
ars
Net income
p
er share:
Bas
ic
¥246.21 ¥377.5
9
¥341.9
5
$2.71
Di
l
ute
d
246.20
3
77.
53
3
41.
84
2.71
The computation of diluted net income per share for the year
ended December 31, 2008 excludes outstanding stock options
because the e
ff
ect would be anti-dilutive
.
Risk mana
g
ement polic
y
Canon operates internationall
y
, exposin
g
it to the risk o
f
chan
g
es
in forei
g
n currenc
y
exchan
g
e rates. Derivative fi nancial instruments
are comprised principally of foreign exchange contracts utilized
by the Company and certain of its subsidiaries to reduce the risk.
Canon assesses
f
orei
g
n currenc
y
exchan
g
e rate risk b
y
continuall
y
monitorin
g
c
h
an
g
es in t
h
e exposures an
d
by
eva
l
uatin
g
h
e
dg
in
g
o
pp
ortunities. Canon does not hold or issue derivative fi nancial
instruments for 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 an
y
counterparties will fail to meet their obli
g
ations. 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 o
f
ma
j
or
fi
nancial institutions
.
20. Derivatives an
d
He
d
ging Activitie
s
Forei
g
n currenc
y
exchan
g
e rate risk mana
g
emen
t
Canon’s international o
p
erations ex
p
ose Canon to the risk o
f
changes in foreign currency exchange rates. Canon uses foreign
exchange contracts to manage certain foreign currency exchange
exposures principall
y
f
rom the exchan
g
e 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
sales
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
.