Canon 2010 Annual Report Download - page 97
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A reconciliation of the numerators and denominators of basic and diluted net income attributable to Canon Inc. stockholders per
share computations is as follows:
18. Net Income Attributable to Canon Inc. Stockholders per Share
Years ended December 31
Millions of yen
Thousands of
U.S. dollars
2010 2009 2008 2010
Net income attributable to Canon Inc. ¥246,603 ¥131,647 ¥309,148 $3,044,481
Effect of dilutive securities:
1.30% Japanese yen convertible debentures,
due 2008 — — 2 —
Diluted net income attributable to Canon Inc. ¥246,603 ¥131,647 ¥309,150 $3,044,481
Number of shares
Average common shares outstanding 1,234,817,511 1,234,481,836 1,255,626,490
Effect of dilutive securities:
Stock options 50,603 ——
1.30% Japanese yen convertible debentures,
due 2008 — — 79,929
Diluted common shares outstanding 1,234,868,114 1,234,481,836 1,255,706,419
Yen U.S. dollars
Net income attributable to Canon Inc.
stockholders per share:
Basic ¥199.71 ¥106.64 ¥246.21 $2.47
Diluted 199.70 106.64 246.20 2.47
The computation of diluted net income attributable to Canon
Inc. stockholders per share for the years ended December 31,
2009 and 2008 excludes outstanding stock options because the
effect would be anti-dilutive. The computation of diluted net
income attributable to Canon Inc. stockholders per share for
the year ended December 31, 2010 excludes certain outstand-
ing stock options because the effect would be anti-dilutive.
Risk management policy
Canon operates internationally, exposing it to the risk of chang-
es in foreign currency exchange rates. Derivative fi nancial
instruments are comprised principally of foreign exchange con-
tracts utilized by the Company and certain of its subsidiaries to
reduce the risk. Canon assesses foreign currency exchange rate
risk by continually monitoring changes in the exposures and by
evaluating hedging opportunities. Canon does not hold or issue
derivative fi nancial instruments for trading purposes. Canon is
also exposed to credit-related losses in the event of non-perfor-
mance by counterparties to derivative fi nancial instruments, but
it is not expected that any counterparties will fail to meet their
obligations. Most of the counterparties are internationally recog-
nized fi nancial institutions and selected by Canon taking into
account their fi nancial condition, and contracts are diversifi ed
across a number of major fi nancial institutions.
19. Derivatives and Hedging Activities
Foreign currency exchange rate risk management
Canon’s international operations expose Canon to the risk of
changes in foreign currency exchange rates. Canon uses for-
eign exchange contracts to manage certain foreign currency
exchange exposures principally from the exchange of U.S. dol-
lars and euros into Japanese yen. These contracts are primarily
used to hedge the foreign currency exposure of forecasted
intercompany sales and intercompany trade receivables that
are denominated in foreign currencies. In accordance with
Canon’s policy, a specifi c portion of foreign currency exposure
resulting from forecasted intercompany sales are hedged using
foreign exchange contracts which principally mature within
three months.