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56
CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS
The
f
ollowin
g
summarizes Canon’s contractual obli
g
ations at December 31, 2008
.
Payments
d
ue
b
y perio
d
M
illions o
f
ye
n
Total
L
ess t
h
an 1 yea
r
1-3 year
s
3-5 year
s
M
ore t
h
an 5 year
s
Contractua
l
o
bl
igations
:
Long-term debt:
Capital lease obli
g
ation
s
¥ 13,648
¥
5
,
3
1
3
¥
7,
388
¥
924
¥
23
O
t
h
er
l
ong-term
d
e
bt
95 7 2
7
3
3
2
8
O
perating lease obligation
s
52,049
1
5
,
221
1
8
,
94
6
9
,
10
7
8
,
775
Pu
r
c
h
ase
co
mmi
t
m
e
n
ts
f
o
r:
Property, p
l
ant an
d
equipmen
t
74,909 74,909
—
—
—
P
arts an
d
raw materia
l
s60,281 60
,
281
—
—
—
Total
¥200,982
¥
155
,
7
3
1
¥26,36
1
¥
1
0,064
¥8,826
Note: The table does not include provisions for uncertain tax positions and related accrued interest and penalties, as the specifi c timin
g
of future pa
y
ments related to
these obli
g
ations cannot be pro
j
ected with reasonable certaint
y
. See Note 14, Income Taxes in the Notes to Consolidated Financial Statements
f
or
f
urther details.
Payments
d
ue
b
y perio
d
T
h
ousa
n
ds
o
f
U
.
S
.
do
ll
a
r
s
Total Less than 1
y
ea
r
1-
3
y
ear
s
3
-5
y
ear
s
M
ore than 5
y
ear
s
Contractual obli
g
ations:
Long-term
d
e
b
t:
Capita
l
l
ease o
bl
igation
s
$ 149,978 $
5
8
,
38
5
$
8
1
,
187
$
10
,
15
4
$ 2
5
2
O
ther lon
g
-term deb
t
1,044
77
297
362
308
Operating
l
ease o
bl
igation
s
571,967
1
67,26
4
208,19
8
100,07
7
96,428
P
urchase commitments
f
or:
P
ropert
y
, plant and equipmen
t
823,176
823
,17
6
—
—
—
P
arts an
d
raw materia
l
s662,429 662,429
—
—
—
T
ota
l
$2,208,594 $1
,
711
,
331 $289
,
68
2
$
110
,
593 $96
,
988
Canon provides warranties of
g
enerall
y
less than one
y
ear
against defects in materials and workmanship on most of its
consumer products. Estimated product warranty related costs
are established at the time revenue is reco
g
nized and is included
in sellin
g
,
g
eneral and administrative expenses. Estimates
f
or
accrue
d
pro
d
uct warranty cost are primari
l
y
b
ase
d
on
h
istorica
l
experience, and are affected by ongoing product failure rates,
speci
fi
c product class
f
ailures outside o
f
the baseline experience,
material usa
g
e and service deliver
y
costs incurred in correctin
g
a
p
roduct failure. As of December 31, 2008, accrued
p
roduct
warranty costs amounted to ¥17,372 million (U.S.$191 million)
.
At December 31, 2008, commitments outstanding for the
purchase o
f
propert
y
, plant and equipment were approximatel
y
¥74,909 million (U.S.
$
823 million), and commitments outstandin
g
for the purchase of parts and raw materials were approximately
¥60,281 million (U.S.$662 million), both for use in the ordinary
course o
f
its business. Canon anticipates that
f
unds needed to
f
ul
fi
ll these commitments will be
g
enerated internall
y
throu
g
h
o
p
erations
.
Durin
g
fi scal 2009, Canon expects to contribute ¥14,439
million (U.S.$159 million) to its Ja
p
anese defi ned benefi t
p
ension
plans and ¥3,485 million (U.S.
$
38 million) to its foreign defi ned
bene
fi
t pension plans
.
Canon’s mana
g
ement believes that current
fi
nancial resources,
cash generated from operations and Canon’s potential capacity
for additional debt and/or equity fi nancing will be suffi cient to
f
und current and
f
uture capital requirements
.