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99
Financial Section (U.S. GAAP)
The Companies enter into foreign exchange forward con-
tracts and combined purchased and written foreign
currency swap contracts to hedge foreign currency trans-
actions (primarily the U.S. dollar and the EURO).The
Companies do not use derivatives for trading purposes.
The Companies are exposed to credit risk in the event of
non-performance by counterparties to derivatives, but man-
agement considers the exposure to such risk to be minimal
since the counterparties are major financial institutions.
Changes in the fair value of foreign exchange forward
contracts, foreign currency swaps and interest rate swaps
designated and qualifying as cash flow hedges are report-
ed in accumulated other comprehensive income (loss).
These amounts are subsequently reclassified into other
expenses, net in the same period as the hedged items
affect earnings. Substantially all of the accumulated other
comprehensive income (loss) in relation to foreign
exchange forward contracts at March 31, 2010 is expect-
ed to be reclassified into earnings within twelve months.
The notional amounts of contracts to exchange foreign currency outstanding at March 31, 2010 and 2009 were as follows:
19. Derivatives and Hedging Activities
Forward exchange contracts
Foreign currency swaps
Interest rate swaps
2010 2009 2010
Millions of yen
Thousands of
U.S. dollars
¥ 63,784
¥ 2,646
¥ 20,000
¥ 28,780
¥ 2,026
¥ 20,000
$ 309,462
$ 21,785
$ 215,054
Forward exchange contracts
2010
Millions of yen
Thousands of
U.S. dollars
$ 2,333 ¥ 217 Forward exchange contracts
Foreign currency swaps
Interest rate swaps
2010
Millions of yen
Thousands of
U.S. dollars
$ (2,022)
(290)
(699)
¥ (188)
(27)
(65)
The fair values of derivatives at March 31, 2009 were as follows:
Derivatives designated as hedges
The fair values of derivatives at March 31, 2010 were as follows:
Derivatives designated as hedges
Forward exchange contracts
Assets
Assets
2009
Millions of yen
¥ 875 Forward exchange contracts
Foreign currency swaps
Interest rate swaps
Liabilities
Liabilities
2009
Millions of yen
¥ (1,654)
(27)
(24)
The effects on consolidated statements of operations in fourth quarter of the year ended March 31, 2009 were as follows:
Derivatives designated as hedges
Forward exchange contracts
Foreign currency swaps
Interest rate swaps
Millions of yen
Cash flow hedge
Profit and loss of other
comprehensive income (loss)
(Hedge effective part)
Transfer from other comprehensive
income (loss) to profit and loss
(Hedge effective part)
¥ (1,714)
0
—
¥ 809
(8)
(14)
The amount of the hedging ineffectiveness was not material.
Fourth quarter of 2009