FINANCIAL HIGHLIGHTS MANAGEMENT PERSPECTIVE TOPICS REVIEW OF OPERATIONS FINANCIAL SECTION CORPORATE DATA Short-term borrowings of the Group consisted of bank overdrafts, notes to banks and commercial paper.  As is customary in Japan, the Group obtains financing by discounting trade notes receivable with banks. Such discounted notes and the related contingent liabilities are not included in the consolidated balance sheets but are disclosed as contingent liabilities (see Note 13). Unused short-term bank credit lines were ¥25,000 million at March 31, 2001. Weighted average interest rates of short-term borrowings at March 31, 2001 and 2000 were 2.89% and 2.54%, respectively.  Long-term debt at March 31, 2001 and 2000 consisted of the following: The Group has entered into various interest rate swap agreements covering certain portions of long-term debt as a means of managing interest rate exposure. Because the counterparties to those agreements are limited to major financial institutions, the Companies do not anticipate any losses arising from credit risk. The impact on interest expense from these agreements is recog- nized over the lives of the respective agreements, which are the same as the terms of the relat- ed loans. Annual maturities of long-term debt outstanding at March 31, 2001 were as follows: At March 31, 2001, property, plant and equipment with a net book value of ¥57,629 million were pledged as collateral for short-term borrowings and long-term debt. Certain loan agreements provide that the lender may require the Group to submit proposals for paying dividends, issuing additional long-term debt and certain other matters, for prior approval. As is customary in Japan, security must be given if requested by a lending bank. Banks have the right to offset cash deposited with them against any debt or obligation that becomes due or, in case of default and certain other specified events, against all other debt payable to them. To date, none of the lenders has ever exercised this right with respect to debt of the Group. In addition, the indentures for the mortgage bonds require prior approval for an issue of bonds, merger, pledge of assets as collateral for other indebtedness and the disposal of any significant facilities. The indentures also grant holders with the right to request additional collateral. DAIKIN INDUSTRIES, LTD. ANNUAL REPORT 2001 34 Year ending March 31 Millions of yen 2002 ........................................................................................................................... ¥13,123 2003 ........................................................................................................................... 27,894 2004 ........................................................................................................................... 13,794 2005 ........................................................................................................................... 11,300 2006 and thereafter...................................................................................................... 13,236 Total ........................................................................................................................ ¥79,347 Millions of yen 2001 2000 1.60% unsecured bonds, due 2002.............................................................. ¥20,000 ¥20,000 1.925% unsecured bonds, due 2004............................................................ 10,000 10,000 2.70% unsecured bonds, due 2006.............................................................. 10,000 10,000 Collateralized loans from government-sponsored banks with interest ranging from 5.05% to 8.15% (2001)  and from 4.60% to 8.15% (2000), due through 2005................................... 3,880 6,555 Collateralized loans from banks with:  Fixed interest ranging from 3.46%, due through 2002 ................................ 2,000 4,200 Floating interest ranging from 0.47% to 0.68% (2001)  and 0.52% to 0.70% (2000), due through 2007 ....................................... 21,550 19,700 Unsecured loans from banks, payable in foreign currencies, with interest ranging from 3.20% to 6.67% (2001)  and 2.75% to 6.59% (2000), due through 2006 .......................................... 9,082 3,945 Unsecured loans from banks with interest  ranging from 0.52% to 7.30% (2001)  and 0.55% to 8.00% (2000), due through 2026 .......................................... 2,835 3,000 Total .............................................................................................. 79,347 77,400 Current portion due within one year .............................................................. (13,123) (5,895) Total .............................................................................................. ¥66,224 ¥71,505 6. Short-Term Borrowings and Long- Term Debt