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77
MITSUBISHI MOTORS CORPORATION ANNUAL REPORT 2006
In millions of yen
2006 2005
Within 1 From 1 Over 3 Within 1 From 1 Over 3
year year to 3 years year year to 3 years
Pay-fixed, receive-floating
Notional amount ¥41,556 — — ¥57,728 ¥72,140 —
Average pay-fixed rate (%) 3.2 — — 3.6 3.1 —
Average receive-floating rate (%) 4.9 — — 4.1 4.6 —
Pay-floating, receive-fixed
Notional amount ¥ 6,413 ¥283 — ¥30,560 ¥30,868 —
Average pay-floating rate (%) 5.2 6.9 — ———
Average receive-fixed rate (%) 3.9 4.7 — ———
The method to determine fair value is based on quotations obtained from financial institutions.
Derivative financial instruments, principally forward exchange contracts and interest swaps, that qualify as hedges
and are accounted for using the deferred hedge accounting method are excluded from the above table according to
the disclosure requirements.
19. Retirement Benefits
MMC and its consolidated subsidiaries have defined benefit pension plans for their employees. The plans include
contributory plans in accordance with the Welfare Pension Institute Law of Japan, tax-qualified plans and non-
contributory severance plans. Additional retirement benefits are paid in certain cases upon an employee’s retirement.
Certain foreign consolidated subsidiaries have defined contribution pension plans. At March 31, 2006, MMC and
its consolidated subsidiaries have 8 funds for contributory plans in accordance with the Welfare Pension Insurance
Law, and 39 funds for tax-qualified plans. MMC and 44 of its consolidated subsidiaries have non-contributory
severance plans.
The discount rate used to determine the retirement benefit obligation was 1.5%–2.5% for MMC and its domestic
consolidated subsidiaries, 4.6%–5.8% for its foreign consolidated subsidiaries, and 1.5%–2.5% for MMC and its
domestic consolidated subsidiaries, 6.0%–6.3% for its foreign consolidated subsidiaries at March 31, 2006 and
2005, respectively. The rate of return on plan assets assumed was 0.8%–4.0% for MMC and its domestic consoli-
dated subsidiaries, 6.7%–8.5% for its foreign consolidated subsidiaries, and 0.8%–4.0% for MMC and its domestic
consolidated subsidiaries, 8.0%–8.5% for its foreign consolidated subsidiaries for the year ended March 31, 2006
and 2005, respectively.
Prior service cost is being amortized using the straight line method over periods of 5 to 21 years, and 10 to 21
years for the years ended March 31, 2006 and 2005, respectively. These periods are within the estimated average
remaining service years of the employees.
Actuarial gains and losses are being amortized using the straight line method over the periods of 5 to 21 years
and 10 to 21 years for the years ended March 31, 2006 and 2005, respectively. These periods are within the
estimated average remaining service years of the employees.
Notes to Consolidated Financial Statements