Canon 2002 Annual Report Download - page 68

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(13) Common Stock
During the years ended December 31, 2002, 2001 and 2000,
the Company issued 2,853,912 shares, 655,309 shares and
4,071,325 shares of common stock, respectively. The issuance
of 243,360 shares during the year ended December 31, 2002
was in connection with the acquisition of the outstanding
minority ownership interest of 37% of Canon Components, Inc.
The acquisition of the minority interest was consummated on
May 1, 2002, whereby Canon Components Inc. became a
wholly-owned subsidiary of the Company. The issuance of
3,176,373 shares during the year ended December 31, 2000
was in connection with the acquisition of the outstanding
minority ownership interest of Canon Chemicals Inc. The
acquisition of the minority interest was consummated on
November 7, 2000, whereby Canon Chemicals Inc. became a
wholly-owned subsidiary of the Company. The remaining
issuance of the shares of the Company was in connection with
conversion of convertible debt. Conversion into common stock
of convertible debt issued subsequent to October 1, 1982 was
accounted for by crediting one-half of the conversion price and
exercise price to each of the common stock account and the
additional paid-in capital account.
(14) Legal Reserve and Cash Dividends
The Japanese Commercial Code, amended effective on October
1, 2001, provides that an amount equal to at least 10% of
appropriations paid in cash be appropriated as a legal reserve
until an aggregated amount of additional paid-in capital and the
legal reserve equals 25% of common stock. Certain foreign
subsidiaries are also required to appropriate their earnings to
legal reserves under the laws of the respective countries.
Canon’s equity in retained earnings or deficit of affiliated
companies owned 20% to 50% accounted for on the equity
basis aggregating positive ¥6,535 million ($54,458 thousand) at
December 31, 2002 is included in retained earnings.
Cash dividends and appropriations to the legal reserve
charged to retained earnings during the years ended December
31, 2002, 2001 and 2000 represent dividends paid out during
those years and the related appropriations to the legal reserve.
Provision has not been made in the accompanying consolidated
financial statements for the dividend for the second half year of
¥17.50 ($0.15) per share, aggregating ¥15,361 million
($128,008 thousand), subsequently proposed by the Board of
Directors in respect of the year ended December 31, 2002.
Cash dividends per common share are computed based on
dividends declared with respect to earnings for the periods.
The amount available for dividends under the Japanese
Commercial Code is based on the amount recorded in the
Company’s nonconsolidated books of account in accordance
with financial accounting standards of Japan. The adjustments
included in the accompanying consolidated financial statements
to have them conform with accounting principles generally
accepted in the United States of America, but not recorded in
the books of account, have no effect on the determination of
retained earnings available for dividends under the Japanese
Commercial Code. The amount available for dividends in the
Company’s nonconsolidated books of account under the
Japanese Commercial Code amounted to ¥746,101 million
($6,217,508 thousand) at December 31, 2002.
CANON INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
(15) Noncash Financing Activities
In the years ended December 31, 2002, 2001 and 2000,
common stock and additional paid-in capital arising from
conversion of convertible debt amounted to ¥3,908 million
($32,567 thousand), ¥981 million and ¥1,335 million,
respectively.
As a result of the acquisition of the outstanding minority
ownership interest of Canon Components Inc. during the year
ended December 31, 2002, goodwill classified as other assets
and additional paid-in capital increased by ¥795 million ($6,625
thousand) and ¥1,052 million ($8,767 thousand), respectively,
and also minority interests decreased by ¥257 million ($2,142
thousand).
As a result of the acquisition of the outstanding minority
ownership interest of Canon Chemicals Inc. during the year
ended December 31, 2000, goodwill classified as other assets,
common stock and additional paid-in capital increased by
¥4,116 million, ¥159 million and ¥14,430 million, respectively,
and also minority interests decreased by ¥10,473 million.