Kyocera is exposed to market risk, including changes in foreign currency exchange rates, interest rates and equity prices. In order to hedge against these risks, Kyocera uses derivative financial instruments. Kyocera does not hold or issue derivative financial instruments for trading purposes. Kyocera regularly assesses these market risks based on policies and procedures established to protect against the adverse effects of these risks and other potential exposures, primarily by reference to the market value of financial instruments. Although Kyocera may be exposed to losses in the event of non-performance by counterparties, Kyocera believes that its counterparties are creditworthy and does not expect such losses, if any, to be significant. In the normal course of business, Kyocera also faces other risks such as country risk, credit risk, or legal risk, but they are not represented in the following tables. Foreign Currency Exchange Risk Kyocera enters into foreign currency forward contracts to hedge certain existing assets and liabilities denominated in foreign currencies, principally the U.S. dollar and the Euro. All such contracts in effect at March 31, 2018 will generally mature within four months. The following tables provide information about Kyocera’s major foreign currency forward contracts existing at March 31, 2018, which include hedge accounting 89 Table of Contents setting forth the contract amounts, fair value, weighted average exchange rates. The contract amounts are generally used to calculate the contractual payments to be exchanged under the contracts. (Pay/Receive) Forward exchange contracts to sell foreign currencies Euro/Yen US$/Yen Euro/US$ (Yen in millions except contractual rates) Contract amounts ¥ 200,948 ¥ 167,093 ¥ 4,866 Fair value 1,161 3,595 (12 ) Weighted average contractual rates 0.008 0.009 0.806 (Receive/Pay) Forward exchange contracts to purchase foreign currencies CZK/US$ US$/Yen Yen/US$ (Yen in millions except contractual rates) Contract amounts ¥ 5,280 ¥ 3,311 ¥ 2,805 Fair value (7 ) 10 3 Weighted average contractual rates 20.477 0.009 105.749 Interest Rate Risk The tables below provide information about Kyocera’s financial instruments that are sensitive to changes in interest rates. Long-term debt (including due within one year) Average pay rate Expected maturity date Total Fair value during the year ending March 31, 2019 2020 2021 2022 2023 Thereafter (Yen in millions) Loans from banks and others 3.88 % ¥ 9,293 9,732 5,195 3,419 1,544 347 ¥ 29,530 ¥ 29,530 Equity Price Risk Kyocera has marketable equity and debt securities that are classified as available-for-sale and are carried in the consolidated balance sheets at fair value. Changes in fair value are recognized as other comprehensive income, net of taxes, as a separate component of shareholders’ equity. Gross unrealized gains on marketable equity securities, which were ¥723,309 million, included ¥667,420 million derived from unrealized gain of KDDI Corporation held by Kyocera. Detailed information appears in Note 3 to Kyocera’s consolidated financial statements included in this annual report on Form 20-F. Kyocera evaluates whether declines in fair value of debt and equity securities are other-than-temporary. Other-than-temporary declines in fair value are recorded as a realized loss with a new cost basis. This evaluation is based mainly on the duration and the extent to which the fair value is less than cost and the anticipated recoverability of fair value in the future. At March 31, 2018, Kyocera held the following available-for-sale marketable equity securities. March 31, 2018 Cost Fair Value (Yen in millions) Equity securities ¥ 270,403 ¥ 993,707