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Hitachi, Ltd. Annual Report 2007 79
The contract or notional amounts of derivative financial instruments held as of March 31, 2007 and 2006 are summarized
as follows:
Thousands of
Millions of yen U.S. dollars
2007 2006 2007
Forward exchange contracts:
To sell foreign currencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥290,177 ¥310,941 $2,459,127
To buy foreign currencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94,540 65,091 801,186
Cross currency swap agreements:
To sell foreign currencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110,815 101,456 939,110
To buy foreign currencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138,888 147,237 1,177,017
Interest rate swaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 454,939 446,823 3,855,415
Option contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,251 13,852 112,297
26. CONCENTRATIONS OF CREDIT RISK
The Company and its subsidiaries generally do not have significant concentrations of credit risk to any counterparties nor
any regions because they are diversified and spread globally.
27. FAIR VALUE OF FINANCIAL INSTRUMENTS
The following methods and assumptions are used to estimate the fair values of financial instruments:
Investments in securities
The fair value of investments in securities is estimated based on quoted market prices for these or similar securities.
Long-term debt
The fair value of long-term debt is estimated based on quoted market prices or the present value of future cash flows
using the Company’s and its subsidiaries’ incremental borrowing rates for similar borrowing arrangements.
Cash and cash equivalents, Trade receivables, Short-term debt and Trade payables
The carrying amount approximates the fair value because of the short maturity of these instruments.