Toshiba 1997 Annual Report Download - page 46

44.
The estimated fair values of the company’s financial instruments at March 31, 1997 and 1996 are summarized as follows:
Millions of yen Thousands of U.S. dollars
1997 1996 1997
Carrying Estimated Carrying Estimated Carrying Estimated
March 31 amount fair value amount fair value amount fair value
Nonderivatives:
Assets–
Marketable securities. . . . . . . . ¥ 126,770 ¥ 321,887 ¥ 140,194 ¥ 456,199 $ 1,022,339 $ 2,595,863
Other investments . . . . . . . . . 208,285 251,236 234,357 268,584 1,679,717 2,026,097
Liabilities–
Long-term debt,
including current portion . . . . (923,853) (944,108) (1,049,954) (1,073,373) (7,450,428) (7,613,774)
Derivative financial instruments:
Forward exchange contracts . . . (1,170) (5,656) (875) (6,356) (9,435) (45,613)
Interest rate swap agreements . . . – (3,150) – (2,907) – (25,403)
Currency swap agreements . . . (2,080) (2,584) (1,286) (1,266) (16,774) (20,839)
The above table excludes the financial instruments for which fair values approximate their carrying values.
In assessing the fair value of these financial instruments, the company has used a variety of methods and assumptions, which
were based on estimates of market conditions and risks existing at that time. For certain instruments, including cash and cash
equivalents, notes and accounts receivable, trade, short-term borrowings, notes payable, trade, accounts payable, trade, notes
and accounts payable for construction and employees’ savings deposits, it was assumed that the carrying amount approximated
fair value for the majority of these instruments because of their short maturities. Quoted market prices were used for marketable
securities, a part of other investments, and publicly held long-term debt. Other techniques, such as estimated discounted value of
future cash flows, and replacement cost, have been used to determine fair value for the remaining financial instruments. These
estimated fair values are not necessarily indicative of the amounts that could be realized in a current market exchange.
Other investments includes investment securities which represent holdings in a number of non-public companies. The aggre-
gate carrying amount of these investments in non-public companies was ¥47,028 million ($379,258 thousand) and ¥52,590
million at March 31, 1997 and 1996, respectively. However, the corresponding fair value of these investments at those dates was
not computed as such estimation was not practicable.
15. Commitments and contingent liabilities:
Commitments outstanding at March 31, 1997 for the purchase of property, plant and equipment approximated ¥42,791 million
($345,089 thousand).
Rental expense for the years ended March 31, 1997 and 1996 aggregated ¥98,824 million ($796,968 thousand) and ¥92,719
million, respectively. Substantially all such rental expenses are related to cancellable leases for office space, warehouses, and
employees’ residential facilities. Such leases are customarily renewed.
At March 31, 1997, contingent liabilities, principally for loans guaranteed, approximated ¥261,788 million ($2,111,194 thousand).
Management of the company believes that there are no legal actions pending against the company and its subsidiaries which could
result in damages against the company which would have a material effect on the company’s consolidated financial statements.
16. Subsequent events:
On June 6, 1997, the company issued the following unsecured yen bonds:
Millions Thousands of
of yen U.S. dollars
2.75 percent bonds due 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 10,000 $ 80,644
2.95 percent bonds due 2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30,000 241,936
3.025 percent bonds due 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30,000 241,936
2.375 percent bonds due 2002 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30,000 241,936
¥100,000 $806,452
The issue price was 100 percent of the face value of the bonds.