NOTES TO CONSOLIDATED FINANCIAL STATEMENTS TOSHIBA CORPORATION 52 The interest rate swap agreements utilized by the Company effectively convert a portion of its floating-rate debt to a fixed-rate basis for the next 10 years.  The Company expects to reclassify ¥744 million ($6,200 thousand) of net losses on derivative financial instruments from accumulated other comprehensive income (loss) to earnings during the next twelve months due to the col- lection of accounts receivable denominated in foreign currency and the payment of variable interest associated with the floating-rate debts.  At March 31, 2003, there were no significant gains or losses on derivative financial instruments or portions thereof that were either ineffective as hedges, excluded from assessment of hedge effectiveness, or where the under- lying risk did not occur.  The Company’s forward exchange contract amounts, the aggregate notional principal amounts of interest rate swap agreements, currency swap agreements, and currency options outstanding at March 31, 2003 and 2002 are sum- marized below: (2) Fair value of financial instruments 2003 2002 Carrying Estimated Carrying Estimated March 31 amount fair value amount fair value Nonderivatives: Assets: Long-term finance receivables, net ¥ 109,394 ¥ 107,256 ¥ 129,489 ¥ 132,267 Liabilities: Long-term debt, including current portion (1,225,399) (1,247,035) (1,159,679) (1,181,925) Derivative financial instruments: Forward exchange contracts 238 238 384 384 Interest rate swap agreements (2,534) (2,534) (3,994) (3,994) Currency swap agreements (3,611) (3,611) (6,853) (6,853) Currency options (575) (575) (31) (31) The estimated fair values of the Company’s financial instruments at March 31, 2003 and 2002 are summarized as follows: Thousands of U.S. dollars 2003 Carrying Estimated March 31 amount fair value Nonderivatives: Assets: Long-term finance receivables, net $ 911,617 $ 893,800 Liabilities: Long-term debt, including current portion (10,211,659) (10,391,958) Derivative financial instruments: Forward exchange contracts 1,983 1,983 Interest rate swap agreements (21,117) (21,117) Currency swap agreements (30,092) (30,092) Currency options (4,792) (4,792) The above table excludes the financial instruments for which fair values approximate their carrying values and those related to leasing activities. In assessing the fair value of these financial instruments, the Company has used a variety of methods and assumptions, which were based on estimates of market conditions and risks existing at that time. For certain instru- ments, including cash and cash equivalents, notes and accounts receivable, trade, finance receivables, net, short- term borrowings, notes payable, trade, accounts payable, trade and accounts payable, other and accrued expenses, it was assumed that the carrying amount approximated fair value for the majority of these instruments because of their short maturities. Quoted market prices were used for a part of marketable securities and other investments. Other techniques, such as estimated discounted value of future cash flows, and replacement cost, have been used to determine fair value for the remaining financial instruments. These estimated fair values are not necessarily indicative of the amounts that could be realized in a current market exchange. Marketable securities and other investments include investment securities, which represent holdings in a number of Thousands of Millions of yen U.S. dollars March 31 2003 2002 2003 Forward exchange contracts: To sell foreign currencies ¥ 82,290 ¥ 98,878 $ 685,750 To buy foreign currencies 29,333 29,036 244,442 Interest rate swap agreements 355,517 410,377 2,962,642 Currency swap agreements 133,571 114,560 1,113,092 Currency options 101,922 8,195 849,350