Toshiba 2005 Annual Report Download - page 76

34 Toshiba Corporation 130th Anniversary
Thousands of U.S. dollars
Pre-tax Tax benefit Net-of-tax
amount (expense) amount
For the year ended March 31, 2005:
Unrealized gains on securities:
Unrealized holding gains arising during year $149,430 $ (60,738) $ 88,692
Less: reclassification adjustment for gains included in net income (44,701) 18,196 (26,505)
Foreign currency translation adjustments:
Currency translation adjustments arising during year 116,542 (20,477) 96,065
Less: reclassification adjustment for losses included in net income 1,514 — 1,514
Minimum pension liability adjustment 235,907 (96,019) 139,888
Unrealized losses on derivative instruments:
Unrealized losses arising during year (55,392) 22,533 (32,859)
Less: reclassification adjustment for losses included in net income 40,878 (16,635) 24,243
Other comprehensive income (loss) $444,178 $(153,140) $291,038
19. NET INCOME PER SHARE
A reconciliation of the numerators and denominators between basic and diluted net income per share for the years
ended March 31, 2005 and 2004 is as follows:
Thousands of
Millions of yen U.S. dollars
Year ended March 31 2005 2004 2005
Net income available to common shareholders ¥46,041 ¥28,825 $430,290
Net income effect of dilutive convertible debentures ———
Net income available to common shareholders
and assumed conversions ¥46,041 ¥28,825 $430,290
Thousands of shares
Year ended March 31 2005 2004
Weighted-average number of shares of common stock
outstanding for the year 3,216,215 3,216,774
Incremental shares from assumed conversions of
dilutive convertible debentures 186,702 —
Weighted-average number of shares of diluted common stock
outstanding for the year 3,402,917 3,216,774
Yen U.S. dollars
Year ended March 31 2005 2004 2005
Net income per share of common stock:
—Basic ¥14.32 ¥8.96 $0.134
—Diluted 13.53 8.96 0.126
20. FINANCIAL INSTRUMENTS
> (1) DERIVATIVE FINANCIAL INSTRUMENTS The Company operates internationally, giving rise to exposure to
market risks from fluctuations in foreign currency exchange and interest rates. In the normal course of its risk management
efforts, the Company employs a variety of derivative financial instruments, which are comprised principally of forward
exchange contracts, interest rate swap agreements, currency swap agreements, and currency options to reduce its
exposures. The Company has policies and procedures for risk management and the approval, reporting and monitoring
of derivative financial instruments. The Company’s policies prohibit holding or issuing derivative financial instruments
for trading purposes.
The counterparties to the Company’s derivative transactions are financial institutions of high credit standing. The
Company does not anticipate any credit loss from nonperformance by the counterparties to forward exchange contracts,
interest rate swap agreements, currency swap agreements and currency options.
The Company has entered into forward exchange contracts with financial institutions as hedges against fluctuations
in foreign currency exchange rates on monetary assets and liabilities denominated in foreign currencies. The forward
exchange contracts related to accounts receivable and payable, and commitments on future trade transactions denominated
in foreign currencies, mature primarily within a few months of the balance sheet date.
Interest rate swap agreements, currency swap agreements, and currency options are used to limit the Company’s
exposure to losses in relation to underlying debt instruments and accounts receivable and payable denominated in foreign
currencies resulting from adverse fluctuations in foreign currency exchange and interest rates. These agreements
mature during the period 2005 to 2014.