Mitsubishi 2009 Annual Report Download - page 35

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Effect of foreign exchange rate fluctuations
Overseas sales accounted for 79.8% of the consolidated sales of
MMC for the period. MMC endeavors to minimize the risk
involved in foreign currency receivables and payables through
foreign currency derivative contracts.
However, fluctuations in the foreign exchange markets still
may have an impact on MMC results.
Effect of socioeconomic situations
The breakdown of the above ratio for overseas sales is 11.8% for
North America, 32.0% for Europe, and 36.0% for Asia and other
regions. There is a possibility that changes in the socioeconomic
situation in Japan or any of these regions will impact MMC results.
Effect of interest rate fluctuations on borrowings
The balance of MMC's consolidated interest-bearing liabilities
stood at ¥353.4 billion at the end of March 2009. There is a pos-
sibility that fluctuations in interest rates on borrowings resulting
from a change in financial market conditions in the future will
impact MMC results.
Effect of fluctuations in materials prices
The MMC Group purchases materials and finished parts and
components from many partners. Increased demand and other
changes in market conditions may cause materials and compo-
nents prices to increase, thus raising MMC’s manufacturing costs
and resulting in an impact on MMC results.
Natural and other disasters
The MMC Group maintains production and other facilities in many
parts of the world. The occurrence of a major natural or other
disaster, such as an earthquake or typhoon, may result in lengthy
halts in operations, etc. and thus have an impact on MMC results.
Changes in laws and regulations
MMC abides by laws and regulations regarding the environment,
product safety, etc. in its various markets of operation. If any laws
and regulations were to be changed, or new rules issued, costs
associated with implementing these changes would have an
impact on MMC results.
33
Annual Report 2009 MITSUBISHI MOTORS CORPORATION