Canon 2010 Annual Report Download - page 60
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Please find page 60 of the 2010 Canon annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.CANON ANNUAL REPORT 201058
All of Canon’s long-term debt is fi xed rate debt. Canon
expects that fair value changes and cash fl ows resulting from
reasonable near-term changes in interest rates will be immate-
rial. Accordingly, Canon believes interest rate risk is insignifi -
cant. See also Note 10 of the Notes to Consolidated Financial
Statements.
Changes in the fair value of derivative fi nancial instruments
designated as cash fl ow hedges, including foreign exchange
contracts associated with forecasted intercompany sales, are
reported in accumulated other comprehensive income (loss).
These amounts are subsequently reclassifi ed into earnings
through other income (deductions) in the same period as the
hedged items affect earnings. Substantially all such amounts
recorded in accumulated other comprehensive income (loss) at
year-end are expected to be recognized in earnings over the
next 12 months. Canon excludes the time value component
from the assessment of hedge effectiveness. Changes in the
fair value of a foreign exchange contract for the period
between the date that the forecasted intercompany sales
occur and its maturity date are recognized in earnings and not
considered hedge ineffectiveness.
The amount of the hedging ineffectiveness was not material
for the years ended December 31, 2010, 2009 and 2008. The
amounts of net losses excluded from the assessment of hedge
effectiveness (time value component) which was recorded in
other income (deductions) was ¥302 million (U.S.$4 million),
¥462 million and ¥3,701 million for the years ended December
31, 2010, 2009 and 2008, respectively.
Canon has entered into certain foreign currency exchange
contracts to manage its foreign currency exposures. These for-
eign currency exchange contracts have not been designated as
hedges. Accordingly, the changes in fair values of these con-
tracts are recorded in earnings immediately.
Millions of yen U.S.$ Euro Others Total
Forwards to sell foreign currencies:
Contract amounts ¥254,676 ¥178,962 ¥32,723 ¥466,361
Estimated fair value 4,963 6,134 (282) 10,815
Forwards to buy foreign currencies:
Contract amounts ¥ 21,944 ¥ 24,414 ¥ 2,328 ¥ 48,686
Estimated fair value (106) (55) 383 222
Thousands of U.S. dollars U.S.$ Euro Others Total
Forwards to sell foreign currencies:
Contract amounts $3,144,148 $2,209,407 $403,988 $5,757,543
Estimated fair value 61,272 75,728 (3,481) 133,519
Forwards to buy foreign currencies:
Contract amounts $ 270,914 $ 301,407 $ 28,741 $ 601,062
Estimated fair value (1,309) (679) 4,728 2,740
The following table provides information about Canon’s
major derivative fi nancial instruments related to foreign curren-
cy exchange transactions existing at December 31, 2010. All of
the foreign exchange contracts described in the following table
have a contractual maturity date in 2011.