Fujitsu 2000 Annual Report Download - page 33

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Assets pledged as collateral for bank loans and long-term debt at March 31, 1999 and 2000 are presented below:
Yen U.S. Dollars
(millions) (thousands)
1999 2000 2000
Investments and long-term loans ¥ 7 ¥—$—
Property, plant and equipment, net 23,411 15,053 142,009
Receivables, trade and other current assets —547 5,161
¥23,418 ¥15,600 $147,170
As is customary in Japan, substantially all loans from banks (including short-term loans) are made under general
agreements which provide that, at the request of the banks, the borrower is required to provide collateral or guarantors
(or additional collateral or guarantors, as appropriate) with respect to such loans, and that all assets pledged as collateral
under such agreements will be applicable to all present and future indebtedness to the banks concerned. These
general agreements further provide that the banks have the right, as the indebtedness matures or becomes due
prematurely by default, to offset deposits at the banks against the indebtedness due to the banks.
The current conversion prices of the 1.4%, 1.9%, 1.95% and 2.0% convertible bonds issued by the Company are
¥1,751.50, ¥998.00, ¥998.00 and ¥998.00 per share, respectively, and the current exercise price of the warrants
issued with the 3 1/8% bonds is ¥1,220.00 per share. The conversion and exercise prices referred to above are subject
to adjustment in certain circumstances, including stock splits or free share distributions of common stock. At March 31,
2000, approximately 116 million shares of common stock were reserved for the conversion or exercise of all
outstanding convertible bonds and warrants.
Certain outstanding convertible bonds and notes can be repurchased at any time and may be redeemed at the
option of the Company, in whole or in part, at prices ranging from 105% to 100% of their principal amounts.
The aggregate annual maturities of long-term debt subsequent to March 31, 2000 are summarized as follows:
Yen U.S. Dollars
Years ending March 31 (millions) (thousands)
2001 ¥132,255 1,247,689
2002 233,803 2,205,689
2003 185,342 1,748,510
2004 185,024 1,745,509
2005 and thereafter 559,220 5,275,660
Bonds with detachable stock purchase warrants issued on or after April 1, 1994 have been accounted for separately
as amounts attributable to the bonds and the stock purchase warrants. As for bonds with warrants issued before that
date, the value of the stock purchase warrants has not been computed retroactively as the warrants are not detachable.
The aggregate amount attributable to stock purchase warrants is reported in other current liabilities in conformity
with accounting principles generally accepted in Japan. The warrants outstanding at March 31, 1999 and 2000
amounted to ¥8,477 million and ¥1,971 million ($18,594 thousand), respectively.
Convertible bonds are treated solely as bonds and no value inherent in their conversion feature is recognized in
accordance with accounting principles generally accepted in Japan. The total amount of the convertible bonds has been
included in long-term debt.
10. Pension and Severance Plans
Upon retirement, employees of the Group are entitled to a lump-sum payment or annuity payments for life as
described below. The Company and its consolidated subsidiaries in Japan adopt severance benefit plans, under which
the cost of benefits is not funded and the liabilities for the benefits are accrued. Under the plans, employees are
entitled to lump-sum payments based on their current basic rates of pay and length of service. Accrued severance
benefits in the consolidated balance sheets are stated at the present value of the vested benefit obligation which would
be required to be paid if all employees voluntarily terminated their services as of the balance sheet date. Provisions for
employees’ severance benefits charged to income for the years ended March 31, 1998, 1999 and 2000 amounted to
¥25,352 million, ¥31,975 million and ¥33,959 million ($320,368 thousand), respectively.
In addition to the plans described above, the Company and its consolidated subsidiaries in Japan have contributory
defined benefit plans with insurance companies, trust banks and investment management companies to supplement
the public welfare pension plan. The plans entitle the eligible employees upon retirement to receive either a lump-sum
payment or annuity payments for life, or a combination of both. These plans include a substitutional portion of the
benefits under the National Welfare Pension Plan of Japan (“the NWP Plan”). The plans require that the liability reserve
and the annual contributions be calculated actuarially by the open aggregate cost method for the substitutional portion
of the NWP Plan, and by the entry-age normal cost method for the remainder.
$
Notes to Consolidated Financial Statements