Ricoh 2009 Annual Report Download - page 63

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ANNUAL REPORT 2009
To Our Shareholders
and Customers
Fiscal 2009
Highlights
Progress of the
16th MTP
Creating New
Customer Value
RICOH
Milestones
Sustainable Environ-
mental Management
Corporate Social
Responsibility
Financial
Section
15. PER SHARE DATA
Dividends per share shown in the consolidated statements of
income are computed based on dividends paid for the year.
A reconciliation of the numerator and the denominators of the basic
and diluted per share computations for net income are as follows:
Risk Management Policy
Ricoh enters into various derivative financial instrument contracts
in the normal course of business in connection with the
management of its assets and liabilities.
Ricoh uses derivative instruments to reduce risk and protect market
value of assets and liabilities in conformity with Ricoh’s policy.
Ricoh does not use derivative financial instruments for trading or
speculative purposes, nor is it a party to leveraged derivatives.
All derivative instruments are exposed to credit risk arising from the
inability of counterparties to meet the terms of the derivative
contracts. However, Ricoh does not expect any counterparties to fail
to meet their obligations because these counterparties are financial
institutions with satisfactory credit ratings. Ricoh utilizes a number
of counterparties to minimize the concentration of credit risk.
Foreign Exchange Risk Management
Ricoh conducts business on a global basis and holds assets and
liabilities denominated in foreign currencies. Ricoh enters into
foreign exchange contracts and foreign currency options to hedge
against the potentially adverse impacts of foreign currency
fluctuations on those assets and liabilities denominated in foreign
currencies.
Interest Rate Risk Management
Ricoh enters into interest rate swap agreements to hedge against
the potential adverse impacts of changes in fair value or cash flow
fluctuations on interest of its outstanding debt.
Fair Value Hedge
Changes in the fair value of derivative instruments and the related
hedged items designated and qualifying as fair value hedges are
included in other (income) expenses on the consolidated
statements of income. There is no hedging ineffectiveness nor are
net gains or losses excluded from the assessment of hedge
effectiveness for the years ended March 31, 2007, 2008 and 2009
as the critical terms of the interest rate swap match the terms of the
hedged debt obligations.
16. DERIVATIVE FINANCIAL INSTRUMENTS
Thousands of shares
2007 2008
2009
Weighted average number of
shares of common stock outstanding 729,745 729,010
723,925
Effect of dilutive securities:
Euro Yen Zero Coupon Convertible
Bonds -Due December 2011
5,758 19,741
19,741
Diluted shares of common stock outstanding 735,503 748,752
743,666
Thousands of
Millions of Yen U.S. Dollars
2007 2008
2009 2009
Income from continuing operations ¥106,224 ¥106,463
¥6,530 $65,960
Income from discontinued operations, net of tax 5,500 –
– –
Net income 111,724 106,463
6,530 65,960
Effect of dilutive securities:
Euro Yen Zero Coupon Convertible Bonds -Due December 2011
(8) (25)
(25) (253)
Diluted net income
¥111,716 ¥106,438
¥6,505 $65,707
Yen U.S. Dollars
2007 2008
2009 2009
Earnings per share:
Basic:
Income from continuing operations
¥145.56 ¥146.04
¥9.02 $0.09
Income from discontinued operations, net of tax
7.54 –
– –
Net income
153.10 146.04
9.02 0.09
Diluted:
Income from continuing operations
¥144.41 ¥142.15
¥8.75 $0.09
Income from discontinued operations, net of tax
7.48 –
– –
Net income
151.89 142.15
8.75 0.09