Honda 2011 Annual Report Download - page 59

Interest Rate Swaps
2010 2011
Yen (millions) Yen (millions)
Notional Expected maturity date Average Average
principal Receive/ Contract Fair Contract Within 1-2 2-3 3-4 4-5 Fair receive pay
currency Pay amounts value amount 1 year year year year year Thereafter value rate rate
JP¥ Float/Fix ¥ 770 (24) ¥ 420 — — 180 240 — — (14) 1.34% 3.16%
US$ Float/Fix 2,476,108 (47,762) 2,357,658 305,929 594,618 940,725 427,415 88,971 — (20,292) 0.37% 1.84%
Fix/Float 525,362 24,473 519,895 29,103 61,336 183,762 50,291 83,150 112,253 16,611 4.40% 1.75%
Float/Float — — 12,473 — 12,473 — — — — 16 0.74% 0.60%
CA$ Float/Fix 525,099 (10,905) 458,092 71,298 97,491 141,507 94,553 47,966 5,277 (4,218) 1.30% 2.87%
Fix/Float 233,677 10,036 179,904 51,401 51,401 77,102 — — — 5,373 5.29% 2.68%
GBP Float/Fix 45,075 (528) 32,134 21,422 10,712 — — — — (136) 1.78% 1.95%
EUR Float/Fix — — 6,029 2,681 2,118 1,230 — — — (17) 0.88% 2.24%
Total ¥3,806,091 (24,710) ¥3,566,605 481,834 830,149 1,344,506 572,499 220,087 117,530 (2,677)
Currency & Interest Rate Swaps
2010 2011
Yen (millions) Yen (millions)
Receiving Paying Expected maturity date Average
Average
side side Receive/ Contract Fair Contract Within 1-2 2-3 3-4 4-5 Fair receive pay
currency currency Pay amounts value amount 1 year year year year year Thereafter value rate rate
JP¥ US$ Fix/Float ¥124,721 29,735 ¥ 82,078 23,820 17,563 5,087 5,537 27,734 2,337 21,523 1.35% 0.73%
Float/Float 137,850 17,403 105,671 58,564 42,348 2,877 — 1,882 — 25,179 0.76% 1.09%
Other Other Fix/Float 405,289 12,613 313,576 — 88,093 100,068 125,415 — — 6,444 5.03% 1.74%
Float/Float 51,104 (3,953) 47,774 27,962 — — 19,812 — — (3,064) 1.29% 2.81%
Total ¥718,964 55,798 ¥549,099 110,346 148,004 108,032 150,764 29,616 2,337 50,082
any plaintiff for general and special damages and court costs will be
adequately covered by our insurance and accrued liabilities. Punitive
damages are claimed in certain of these lawsuits. Honda is also
subject to potential liability under other various lawsuits and claims
including 6 purported class actions in the United States.
Honda recognizes an accrued liability for loss contingencies when
it is probable that an obligation has been incurred and the amount of
loss can be reasonably estimated. Honda reviews these pending
lawsuits and claims periodically and adjusts the amounts recorded
for these contingent liabilities, if necessary, by considering the nature
of lawsuits and claims, the progress of the case and the opinions of
legal counsel. After consultation with legal counsel, and taking into
account all known factors pertaining to existing lawsuits and claims,
Honda believes that the ultimate outcome of such lawsuits and
pending claims including 6 purported class actions in the United
States should not result in liability to Honda that would be likely to
have an adverse material effect on its consolidated financial position,
results of operations or cash flows.
(Equity Price Risk)
Honda is exposed to equity price risk as a result of its holdings of
marketable equity securities. Marketable equity securities included
in Honda’s investment portfolio are held for purposes other than
trading, and are reported at fair value, with unrealized gains or
losses, net of deferred taxes, included in accumulated other
comprehensive income (loss) in the equity section of the consolidated
balance sheets. At March 31, 2010 and 2011, the estimated fair
values of marketable equity securities were ¥94.5 billion and ¥92.4
billion, respectively.
Legal Proceedings
Various legal proceedings are pending against us. Honda believes
that such proceedings constitute ordinary routine litigation incidental
to our business. With respect to product liability, personal injury claims
or lawsuits, we believe that any judgment that may be recovered by
57