Mitsubishi 2000 Annual Report Download - page 59

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Notes to consolidated financial statements
57
13. Derivative financial instruments
MMC and its subsidiaries utilize derivative financial instruments for the purpose of hedging its exposure to adverse fluc-
tuations in foreign currency exchange rates and interest rates such as forward exchange contract, currency swap, and in-
terest rate swap in the normal course of business, but does not enter into such transactions for speculation or trading pur-
poses.
MMC and its subsidiaries are exposed to credit loss in the event of nonperformance by the counterparties to the deriva-
tive financial instruments, but any such loss would not be material because the Company enters into transactions only
with financial institutions with high credit ratings. The notional amounts of the derivative financial instruments do not
necessarily represent the amounts exchanged by the parties and, therefore, are not a direct measure of the Company's risk
exposure in connection with derivative financial instruments.
Summarized below are the notional amounts and the estimated fair value of the derivative transactions outstanding at
March 31, 2000:
14. Leases
As lessee
MMC and its subsidiaries lease certain property, plant and equipment. For the years ended March 31, 2000 and 1999, fi-
nance lease transactions, except for agreements which stipulate transfer of the title of the assets to the lessee were as fol-
lows:
At March 31, 2000, the equivalent of the acquisition cost of finance lease transactions, except for agreements which
stipulate transfer of the title of the assets to the lessee, amounted to ¥ 105,636million ($ 995,158thousand) for tools and
equipment and ¥ 27,626million ($260,254thousand) for others. The total equivalent of the related net book value, which
is less than the related accumulated depreciation of ¥79,587million ($749,760thousand), was ¥ 53,675million
($505,652thousand).
March 31,
2000 1999 2000
(In millions of yen) (In thousands of
U.S. dollars)
Finance lease obligations:
Due within 1 year ¥ 24,560 ¥ 25,631 $ 231,371
Due after 1 year 49,191 46,443 463,410
Total ¥ 73,751 ¥ 72,074 $ 694,781
Notional Fair Unrealized Notional Fair Unrealized
amount value gain(loss) amount value gain(loss)
(In millions of yen) (In thousands of U.S. dollars)
Forward foreign
exchange contracts:
Sell:
US$ ¥ 15,207 ¥ 15,210 ¥ (2) $ 143,260 $ 143,288 $ (19)
£ stg 486 546 (59) 4,578 5,144 (556)
Options:
Call options, sold
US$ 4,139 38,992
<Premium> <83> 40 42 <782> 377 396
Put options, purchased:
US$ 4,139 38,992
<Premium> <83> 187 104 <782> 1,762 980
Total
¥ 84 $ 791