Canon 2003 Annual Report Download - page 40

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38
Canon provides warranties generally less than one year
against defects in materials and workmanship on most of its
consumer products. A liability for estimated product warranty
related cost is established at the time revenue is recognized
and is included in accrued expenses. Estimates for accrued
product warranty cost are primarily based on historical
experience, and are affected by ongoing product failure rates,
specific product class failures outside of the baseline
experience, material usage and service delivery costs incurred
in correcting a product failure. As of December 31, 2003, the
accrued product warranty cost amounted to ¥10,512 million
(U.S.$98 million).
At December 31, 2003, Canon had outstanding
commitments of approximately ¥54,947 million (U.S.$514
million) to purchase property, plant and equipment for use in
the ordinary course of its business. Canon anticipates that
funds needed to fulfill these commitments will be generated
internally through operations.
Canon’s management believes that current financial
resources, cash generated from operations and Canon’s
potential capacity for additional debt and/or equity financing will
be sufficient to fund current and future capital requirements.
Contractual obligations and commercial commitments
The following summarizes Canon’s contractual obligations at December 31, 2003.
(Millions of yen)
Payments Due By Period
Total Less than 1 year 1-3 years 3-5 years More than 5 years
Contractual Obligations:
Long-Term Debt
Capital Lease Obligations ¥11,267 5,200 5,230 765 72
Other Long-Term Debt 84,188 30,995 22,420 30,711 62
Operating Lease Obligations 43,430 11,769 15,304 9,055 7,302
Purchase Commitments for Property Plant and Equipment 54,947 54,947 — — —
Total ¥193,832 102,911 42,954 40,531 7,436
(Thousands of U.S.dollars)
Payments Due By Period
Total Less than 1 year 1-3 years 3-5 years More than 5 years
Contractual Obligations:
Long-Term Debt
Capital Lease Obligations $105,299 48,598 48,878 7,150 673
Other Long-Term Debt 786,804 289,673 209,534 287,018 579
Operating Lease Obligations 405,888 109,991 143,028 84,626 68,243
Purchase Commitments for Property Plant and Equipment 513,523 513,523 — — —
Total $
1,811,514
961,785 401,440 378,794 69,495