Canon 2015 Annual Report Download - page 45

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CANON ANNUAL REPORT 2015 43
STRATEGY BUSINESS SEGMENT CORPORATE STRUCTURE FINANCIAL SECTION CORPORATE DATA
million in 2014 and ¥48,515 million in 2013. Employer con-
tributions to Canon’s worldwide defined contribution pension
plans were ¥17,277 million in 2015, ¥15,077 million in 2014,
and ¥14,383 million in 2013. In addition, employer contribu-
tions to the multiemployer pension plan of certain subsidiaries
were ¥3,864 million in 2015 and ¥2,815 million in 2014.
Working capital in 2015 decreased by ¥228,704 million
to ¥1,241,850 million, compared with ¥1,470,554 million
in 2014 and ¥1,437,635 million in 2013. Canon believes its
working capital will be sufficient for its requirements for the
foreseeable future. Canon’s capital requirements are primar-
ily dependent on management’s business plans regarding the
levels and timing of purchases of fixed assets and investments.
The working capital ratio (ratio of current assets to current lia-
bilities) for 2015 was 2.52 compared to 2.60 for 2014 and to
2.69 for 2013.
Return on assets (net income attributable to Canon Inc.
divided by the average of total assets) was 5.0% in 2015,
compared to 5.9% in 2014 and 5.6% in 2013.
Return on Canon Inc. shareholders’ equity (net income
attributable to Canon Inc. divided by the average of total
Canon Inc. shareholders’ equity) was 7.4% in 2015 compared
with 8.7% in 2014 and 8.4% in 2013.
The debt to total assets ratio was 0.0%, 0.0% and 0.1%
as of December 31, 2015, 2014 and 2013, respectively. Canon
had short-term loans and long-term debt of ¥1,569 million
as of December 31, 2015, ¥2,166 million as of December 31,
2014 and ¥2,747 million as of December 31, 2013.
OFF-BALANCE SHEET ARRANGEMENTS
As part of its ongoing business, Canon does not participate in
transactions that generate relationships with unconsolidated
entities or financial partnerships, such as entities often referred
to as structured finance or special purpose entities established
for the purpose of facilitating off-balance sheet arrangements
or other contractually narrow or limited purposes.
Canon provides guarantees for bank loans of its employ-
ees, affiliates and other companies. Canon will have to per-
form under a guarantee if the borrower defaults on a payment
within the contract periods of 1 year to 30 years in the case
of employees with housing loans, and 1 year to 5 years in the
case of affiliates and other companies. The maximum amount
of undiscounted payments Canon would have had to make
in the event of default by all borrowers was ¥7,685 million at
December 31, 2015. The carrying amounts of the liabilities
recognized for Canon’s obligations as a guarantor under those
guarantees at December 31, 2015 were insignificant.
Canon provides warranties of generally less than one year
against defects in materials and workmanship on most of
its consumer products. Estimated product warranty related
costs are established at the time revenue are recognized and
are included in selling, general and administrative expenses.
Estimates for accrued product warranty costs are primar-
ily based on historical experience, and are affected by ongo-
ing product failure rates, specific product class failures outside
Payments due by period
Millions of yen Total Less than 1 year 1-3 years 3-5 years
More than 5 years
Contractual obiligations:
Long-term debt:
Capital lease obligations ¥ 1,470 ¥ 630 ¥ 705 ¥ 135 ¥ —
Other long-term debt 73 32 28 13 —
Operating lease obligations 87,592 26,294 34,183 14,962 12,153
Purchase commitments for:
Property, plant and equipment 43,059 43,059 — — —
Parts and raw materials 75,439 75,439 — — —
Other long-term liabilities:
Contribution to defined benefit pension plans 20,721 20,721 — — —
Total ¥228,354 ¥166,175 ¥34,916 ¥15,110 ¥12,153
Note: The table does not include provisions for uncertain tax positions and related accrued interest and penalties, as the specific timing of future payments related
to these obligations cannot be projected with reasonable certainty. See Note 12, Income Taxes in the Notes to Consolidated Financial Statements for further
details. Contribution to defined benefit pension plans reflects the expected amount only for the next fiscal year, since contributions beyond the next fiscal
year are not currently determinable due to uncertainties related to changes in actuarial assumptions, returns on plan assets and changes to plan membership.
CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS
The following summarizes Canon’s contractual obligations at December 31, 2015.