Toshiba 2006 Annual Report Download - page 80

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Thousands of U.S. dollars
Pre-tax Tax benefit Net-of-tax
amount (expense) amount
For the year ended March 31, 2006:
Unrealized gains on securities:
Unrealized holding gains arising during year $ 378,034 $ (153,615) $ 224,419
Less: reclassification adjustment for gains included in net income (35,880) 14,598 (21,282)
Foreign currency translation adjustments:
Currency translation adjustments arising during year 271,889 43,025 314,914
Less: reclassification adjustment for gains included in net income (128) — (128)
Minimum pension liability adjustment 979,572 (398,683) 580,889
Unrealized losses on derivative instruments:
Unrealized losses arising during year (37,923) 15,384 (22,539)
Less: reclassification adjustment for losses included in net income 33,453 (13,624) 19,829
Other comprehensive income (loss) $1,589,017 $ (492,915) $ 1,096,102
18. 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, 2006 and 2005 is as follows:
Thousands of
Millions of yen U.S. dollars
Year ended March 31 2006 2005 2006
Net income available to common shareholders ¥78,186 ¥46,041 $668,256
Net income effect of dilutive convertible debentures ———
Net income available to common shareholders and assumed conversions ¥78,186 ¥46,041 $668,256
Thousands of shares
Year ended March 31 2006 2005
Weighted-average number of shares
of common stock outstanding for the year 3,215,045 3,216,215
Incremental shares from assumed conversions
of dilutive convertible debentures 269,681 186,702
Weighted-average number of shares
of diluted common stock outstanding for the year 3,484,726 3,402,917
Yen U.S. dollars
Year ended March 31 2006 2005 2006
Net income per share of common stock:
—Basic ¥24.32 ¥14.32 $0.21
—Diluted 22.44 13.53 0.19
19. 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 instru-
ments, which are consisted 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 finan-
cial 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
Notes to Consolidated Financial Statements
Toshiba Corporation and Subsidiaries
March 31, 2006