Sony 2000 Annual Report Download - page 82

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80
SONY CORPORATION ANNUAL REPORT 2000
Yen in millions Dollars in millions
March 31 March 31 ,
1999 2000 2000
Carrying Estimated Carrying Estimated Carrying Estimated
amount fair value amount fair value amount fair value
Cash and cash equivalents. . . . . ¥ 592,210 ¥ 592,210 ¥ 626,064 ¥ 626,064 $ 5,906 $ 5,906
Time deposits . . . . . . . . . . . . . . 24,304 24,304 6,1 38 6,1 38 58 58
Short-term borrowings. . . . . . . . (40,877) (40,877) (56,426) (56,426) (532) (532)
Long-term debt including
the current portion . . . . . . . . . (1,125,285) (1,351,358) (972,337) (1,893,521 ) (9,174) (17,863)
Forward exchange contracts . . . (516) (4,423) 986 2,479 9 23
Currency option contracts
purchased . . . . . . . . . . . . . . . . 3,252 3,252 7,422 7,422 70 70
Currency option contracts
written . . . . . . . . . . . . . . . . . . (4,226) (4,226) (2,892) (2,892) (27) (27)
Interest rate swap agreements . . (549) (1,025) (253) (457) (2) (4)
Interest rate and currency
swap agreements. . . . . . . . . . . — (21,470) — (32,362) — (305)
Bond futures option
contracts written . . . . . . . . . . . (436) (436) (179) (179) (2) (2)
Sony has entered into purchased foreign currency
option contracts in the notional principal amounts of
¥414,896 million and ¥495,949 million ($4,679 million)
at March 31, 1999 and 2000, respectively. The majority
of these contracts expire within three months of the
balance sheet dates. Sony has also entered into written
foreign currency option contracts in the notional princi-
pal amounts of ¥344,890 million and ¥574,656 million
($5,421 million) at March 31, 1999 and 2000, respec-
tively. The majority of these contracts are part of range
forward contract arrangements and expire in the same
month with the corresponding purchased foreign cur-
rency option contracts described above. The fair values
of such foreign currency options were estimated based
on market quotations.
Sony has entered into interest rate swap agreements
and interest rate and currency swap agreements which
mature from 2000 to 2010 to reduce its exposure result-
ing from adverse fluctuations in interest rates or foreign
currency exchange rates on underlying debt instruments.
At March 31, 1999 and 2000, the aggregate notional
principal amounts of the interest rate swap agreements
were ¥210,085 million and ¥225,801 million ($2,130
million), respectively, and those of the interest rate and
currency swap agreements were ¥390,734 million and
¥362,437 million ($3,419 million), respectively. The fair
values of such agreements were estimated based on the
discounted amounts of net future cash flows.
Sony’s stock life insurance subsidiary has entered
into written government bond futures option contracts
as an integral part of short-term investing activities in
order to secure the yields of bond investments on hand.
All of these contracts expire within two months of
the balance sheet date and their notional principal
amounts were ¥108,700 million and ¥102,580 million
($968 million) at March 31, 1999 and 2000, respectively.
For accounting purposes, those transactions do not
qualify for hedge accounting. Accordingly, those written
bond futures option contracts were marked to market.
The fair values of such written bond futures option
contracts were estimated based on market quotations.
The average fair value and the net gain/loss from those
written bond futures option contracts during the years
ended March 31, 1998, 1999 and 2000 were insignificant.
The estimated fair values of Sony’s financial instru-
ments, both on and off the balance sheets excluding
notes and accounts receivable, trade and notes and
accounts payable, trade that are carried at amounts
which approximate fair value and excluding debt and
equity securities disclosed in Note 10, are summarized
as follows: