Canon 2008 Annual Report Download - page 92

90
D
ece
m
be
r 3
1
M
illions of
y
e
n
T
h
ousa
n
ds
of
U
.
S
.
do
ll
a
r
s
2008
2
00
7
2008
T
o sell
f
oreign currencies ¥ 350,959 ¥ 697,240 $ 3,856,692
T
o buy
f
oreign currencies 35,247 46
,
89
7
387,330
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
CANON INC. AND SUBSIDIARIES
Co
mm
it
m
e
n
ts
At December 31, 2008, commitments outstandin
g
f
or the
purchase o
f
propert
y
, plant and equipment approximated
¥74,909 million ($823,176 thousand), and commitments
outstanding for the purchase of parts and raw materials
approximated ¥60,281 million ($662,429 thousand)
.
Canon occupies sales o
ffi
ces and other
f
acilities under lease
arran
g
ements accounted
f
or as operatin
g
leases. Deposits made
under such arrangements aggregated ¥14,223 million ($156,297
thousand
)
and ¥14,440 million at December 31, 2008 and 2007,
2
1. Commitments an
d
Contingent Lia
b
i
l
itie
s
respectively, and are included in noncurrent receivables in the
accompan
y
in
g
consolidated balance sheets. Rental expenses
un
d
er t
h
e operatin
g
l
ease arran
g
ements amounte
d
to ¥41,169
million ($452,407 thousand), ¥36,900 million and ¥36,157
million for the years ended December 31, 2008, 2007 and
2006, respectivel
y
.
Future minimum lease pa
y
ments required under noncancelable
operatin
g
l
eases t
h
at
h
ave initia
l
or remainin
g
l
ease terms in
excess of one year at December 31, 2008 are as follows
:
Millions o
f
yen
Thousands of
U.S.
d
o
ll
ar
s
Year endin
g
December 31
:
2009
¥ 14
,
726 $ 161
,
824
20
1
0
11,1
27
1
22
,
2
7
5
2
011 7,090 77,91
2
20
1
2
5
,
105 56
,
099
20
1
3
3,3
4
8
36,
7
9
1
T
h
e
r
ea
f
ter
8
,44
0
92
,747
T
otal
f
uture minimum lease payment
s
¥ 49
,
836 $ 547
,
64
8
Cash fl ow hedg
e
Changes in the fair value of derivative fi nancial instruments
desi
g
nated as cash
fl
ow hed
g
es, includin
g
f
orei
g
n exchan
g
e
contracts associated with
f
orecasted intercompan
y
sales, are
re
p
orted in accumulated other com
p
rehensive income (loss).
These amounts are subsequently reclassifi ed into earnings
through other income
(
deductions
)
in the same period as the
hed
g
ed items a
ff
ect earnin
g
s. Substantiall
y
all amounts
recorded in accumulated other com
p
rehensive income (loss) at
year-en
d
are expecte
d
to
b
e recognize
d
in earnings over t
h
e
next 12 months. Canon excludes the time value component
f
rom the assessment o
f
hed
g
e e
ff
ectiveness. Chan
g
es in the
f
air value o
f
a
f
orei
g
n exchan
g
e contract
f
or the period between
the date that the forecasted intercompany sales occur and its
maturity date are recognized in earnings and not considered
hedge ine
ff
ectiveness
.
The amount of the hedging ineffectiveness was not material
for the years ended December 31, 2008, 2007 and 2006. The
amount o
f
net
g
ains or losses excluded
f
rom the assessment o
f
hed
g
e e
ff
ectiveness (time value component) which was recorded
in other income (deductions) was net losses of ¥3,701 million
(
$40,670 thousand
)
, ¥6,883 million and ¥5,917 million for the
years ended December 31, 2008, 2007 and 2006, respectively
.
Derivatives not
d
esignate
d
as
h
e
d
ge
s
Canon has entered into certain foreign exchange contracts to
manage its
f
oreign currency exposures. These
f
oreign exchange
contracts have not been desi
g
nated as hed
g
es. Accordin
g
l
y
, the
chan
g
es in
f
air value o
f
the contracts are recorded in earnin
g
s
imme
d
iate
l
y
.
Contract amounts of foreign exchange contracts at
December 31
,
2008 and 2007 are set
f
orth below
: