Hitachi 2009 Annual Report Download - page 57

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The following table shows the future minimum lease payments of capital and non-cancelable operating leases as of
March 31, 2009:
Millions of yen
Thousands of
U.S. dollars
Capital
leases
Operating
leases
Capital
leases
Operating
leases
Years ending March 31 2009 2009
2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥13,180 ¥15,030 $134,490 $153,367
2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,004 10,409 91,877 106,214
2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,763 8,663 48,602 88,398
2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,722 7,485 27,775 76,378
2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,263 6,604 12,888 67,388
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,869 24,255 49,684 247,500
Total minimum lease payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35,801 ¥72,446 365,316 $739,245
Amount representing executory costs . . . . . . . . . . . . . . . . . . . . . . . . (493) (5,031)
Amount representing interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,762) (17,979)
Present value of net minimum lease payments . . . . . . . . . . . . . . . . . . 33,546 342,306
Less current portion of capital lease obligations . . . . . . . . . . . . . . . . . 12,549 128,051
Long-term capital lease obligations . . . . . . . . . . . . . . . . . . . . . . . . . . ¥20,997 $214,255
7. SECURITIZATIONS
The Company and certain subsidiaries securitize certain financial assets, such as lease, trade and mortgage loans receivable,
and arrange other forms of asset-backed financing for the purpose of providing diversified and stable fund raising as part of
their ongoing securitization activities. Historically, they have used both Hitachi-supported and third-party Special Purpose
Entities (SPEs) to execute securitization transactions funded with commercial paper and other borrowings. The securitization
transactions they engage in are similar to those used by many financial institutions.
Investors in these entities only have recourse to the assets owned by the entity and not to their general credit, unless noted
below. They do not provide non-contractual support to SPEs and do not have implicit support arrangements with any SPEs.
The majority of their involvement with SPEs relate to the securitization activities: assisting in the formation and financing of an
entity, providing recourse, servicing the assets and receiving fees for services provided.
A portion of these lease, trade and mortgage loans receivable is transferred to SPEs sponsored by financial institutions, which
operate those SPEs as a part of their businesses. Accordingly, the amount of assets transferred by the Company and its
subsidiaries is considerably small compared to the total assets of the SPEs sponsored by these financial institutions that
purchase a large amount of assets from entities other than the Company and its subsidiaries. In certain transactions, the
Company’s subsidiaries retain subordinated interests in the transferred assets. In other transactions, investors have recourse
with a scope that is considerably limited.
Most of the transactions transferring lease and mortgage loans receivable utilize securitization trusts. In those transactions,
certain subsidiaries initially transfer the receivables to trusts that satisfy the conditions of Qualifying SPEs (QSPEs), and receive
the beneficial interests in trusts originated from the transferred assets. Subsequently, the subsidiaries transfer the interests to
and receive cash as consideration from SPEs that are not QSPEs, as a part of off-balance sheet arrangements.
The rest of these financial assets, consisting mainly of trade receivables, are transferred to QSPEs established by certain of
the Company’s subsidiaries in the Cayman Islands. In those transactions, the Company and certain subsidiaries receive cash
as consideration from QSPEs that are funded through the issuance of asset-backed securities or other borrowings from
investors that are secured by the transferred assets. The Company and certain subsidiaries retain subordinated interests in
the transferred assets relating to these transactions, or otherwise investors have recourse with considerably limited scope.
Furthermore, the Company and certain subsidiaries retain servicing responsibility, and certain of the Company’s subsidiaries
provide credit facilities to QSPEs in accordance with the service agency business contracts from which temporary payments
on behalf of such QSPEs are made.
55
Hitachi, Ltd.
Annual Report 2009