Canon 2002 Annual Report Download - page 41

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39
LONG-TERM DEBT (including due within one year) (Millions of yen)
Average interest Expected maturity date Estimated
rates Total 2003 2004 2005 2006 2007 Thereafter Fair Value
Japanese yen notes 2.31% ¥55,000 10,000 20,000 5,000 —10,000 10,000 58,043
Japanese yen convertible
debentures 1.26% 15,031 ——5,149 ——9,882 44,445
Loans, principally from banks 2.09% 30,324 9,006 10,944 6,325 1,217 262 2,570 30,086
Total ¥100,355 19,006 30,944 16,474 1,217 10,262 22,452 132,574
INTEREST RATE SWAP (Millions of yen)
Notional principal Average receive Average pay Expected maturity date Estimated
amount (million) rate rate Total 2003 2004 2005 2006 2007 Thereafter Fair Value
¥180 1.48% 1.39% ¥180 180 ————— 1
US$ 467 3.75% 1.38% 56,019 6,278 19,504 30,237 ———(1,136)
Euro 10 3.37% 4.09% 1,251 1,251 —————(13)
LONG-TERM DEBT (including due within one year) (Thousands of U.S. dollars)
Average interest Expected maturity date Estimated
rates Total 2003 2004 2005 2006 2007 Thereafter Fair Value
Japanese yen notes 2.31% $ 458,334 83,333 166,668 41,667 —83,333 83,333 483,691
Japanese yen convertible
debentures 1.26% 125,258 ——42,908 ——82,350 370,375
Loans, principally from banks 2.09% 252,700 75,050 91,200 52,708 10,142 2,183 21,417 250,717
Total $ 836,292 158,383 257,868 137,283 10,142 85,516 187,100 1,104,783
INTEREST RATE SWAP (Thousands of U.S. dollars)
Notional principal Average receive Average pay Expected maturity date Estimated
amount (million) rate rate Total 2003 2004 2005 2006 2007 Thereafter Fair Value
¥180 1.48% 1.39% $ 1,500 1,500 ————— 8
US$ 467 3.75% 1.38% 466,825 52,317 162,533 251,975 ———(9,467)
Euro 10 3.37% 4.09% 10,425 10,425 —————(108)
Notes: All long-term debt is fixed rate except loans, principally from banks which include both fixed and floating rate debt.
Derivative financial instruments designated as fair value
hedges principally relate to interest rate swaps associated with
fixed rate debt obligations. Changes in fair values of the hedged
debt obligations and derivative instruments designated as fair
value hedges of these debt obligations are recognized in other
income (deductions). There is no hedging ineffectiveness or net
gains or losses excluded from the assessment of hedge
effectiveness for the year ended December 31, 2002 as the
critical terms of the interest rate swaps match the terms of the
hedged debt obligations.
Changes in the fair value of foreign exchange contracts
designated and qualifying as cash flow hedges of forecasted
intercompany sales are reported in accumulated other
comprehensive income (loss). These amounts are subsequently
reclassified into earnings through other income (deductions) in
the same period as the hedged items affect earnings. All the
accumulated other comprehensive income (loss) at end of year
are substantially expected to be recognized in earnings over the
next twelve months. Canon excludes the time value component
of the hedging instruments from the assessment of hedge
effectiveness.
Canon has entered into certain foreign exchange contracts,
which do not meet the hedging criteria of SFAS 133 and 138.
Canon records these foreign exchange contracts on the balance
sheet at fair value. The changes in fair values are recorded in
earnings immediately. The national amounts of those foreign
exchange contracts were ¥362,276 million (U.S.$3,019 million)
and ¥202,932 million at December 31, 2002 and 2001.