Bridgestone 2002 Annual Report Download - page 34

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32
material effect on the Company’s consolidated financial position
and results of operations.
The Company’s foreign currency forward contracts which are
designated as hedging exposure to variable cash flows of forecasted
transactions are measured at the fair value and the unrealized
gains/losses are deferred until the underlying transactions are com-
pleted. Other foreign currency forward contracts, currency swap
contracts and currency option contracts employed to hedge foreign
exchange exposures to changes in fair value and in cash flow are
also measured at the fair value but the unrealized gains/losses are
recognized in income. Long-term debt denominated in foreign cur-
rencies for which foreign currency forward contracts and currency
swap contracts are used to hedge the foreign currency fluctuations
is translated at the contracted rate if the foreign exchange forward
contracts and currency swap contracts qualify for hedge account-
ing. The interest rate swaps which qualify for hedge accounting
and meet specific matching criteria are not remeasured at market
value, but the differential paid or received under the swap agree-
ments is recognized and included in interest expenses or income.
The gains or losses on commodity future contracts in a hedge
to fluctuations of commodity prices are recognized currently in
income.
(s) Per share of common stock
Prior to January 1, 2002, the computation of basic net income
per share was based on the weighted average number of shares of
common stock outstanding each year. Diluted net income per share
of common stock reflects the potential dilution as a result of
issuance of shares upon conversion of the Company’s convertible
bonds and exercise of stock options.
Effective January 1, 2002, the Company adopted a new account-
ing standard for computation of earning per share. The principal
change to the former standard is that bonuses to directors are
deducted from net income to compute basic net income per share
and diluted net income per share. The standard is required to be
adopted for fiscal years beginning after April 1, 2002, with earlier
application permitted in certain circumstances. The Company’s
basic net income per share and diluted net income per share would
have been ¥52.72 ($0.44) and ¥52.64 ($0.44), respectively, for
the year ended December 31, 2002, if the Company had adopted
the former standard.
Cash dividends per share presented in the consolidated state-
ments of income are dividends applicable to the respective years,
including dividends to be paid after the end of the year.
(t) Reclassification
Certain consolidated financial statement items previously reported
have been reclassified to conform to the current year’s presentation.
NOTE 4—INVENTORIES
Inventories at December 31, 2002 and 2001 consist of the following:
Thousands of
Millions of yen U.S. dollars
2002 2001 2002
Finished products ¥222,709 ¥239,069 $1,857,456
Work in process 20,626 20,077 172,027
Raw materials and supplies 80,978 82,228 675,380
Total ¥324,313 ¥341,374 $2,704,863