Mitsubishi 2006 Annual Report Download - page 73

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71
MITSUBISHI MOTORS CORPORATION ANNUAL REPORT 2006
The obligations secured by such collateral at March 31, 2006 and 2005 were as follows:
In thousands of
In millions of yen U.S. dollars
2006 2005 2006
Short-term borrowings ¥ 87,729 ¥210,011 $ 746,827
Current portion of long-term debt 71,270 27,889 606,712
Long-term debt 137,692 145,380 1,172,147
Total short-term borrowings and Long-term debt ¥296,692 ¥383,281 $2,525,687
12. Stockholders’ Equity
The Commercial Code of Japan (the “Code”) provides that an amount equal to at least 10% of the amount to be
disbursed as a distribution of earnings should be appropriated to the legal reserve until the sum of the legal reserve
and capital surplus equals at least 25% of the common stock account. The Code also stipulates that, to the extent
that the sum of the capital surplus account and the legal reserve exceed 25% of the common stock account, the
amount of any such excess is available for appropriation by resolution of the stockholders. MMC and its domestic
subsidiaries have provided these amounts in accordance with the Code.
Unrealized holding gain on securities and derivative financial instruments is not available for dividends.
MMC is authorized to issue 3,312,000 shares of convertible preferred stock that are classified as Series A, B
and G (3 to 4 times in each series), and has 442,593 shares outstanding at March 31, 2006.
The holders of each series of convertible preferred stock are not entitled to voting rights, but the holders of
Series A and G (except for Series B) are entitled to preferred stock dividends of ¥50,000 per share each year after
April 2009.
MMC also distributes residual claims to the holders of each series of convertible preferred stock by a single
payment of one million yen per share of preferred stock in order of payment.
13. Contingent Liabilities
Loan guarantees given in the ordinary course of business amounted to ¥5,274 million ($44,903 thousand) and
¥6,008 million at March 31, 2006 and 2005, respectively. Agreements similar to guarantees given in the ordinary
course of business amounted to ¥3,215 million ($27,374 thousand) and ¥3,449 million at March 31, 2006 and
2005, respectively.
14. Selling, General and Administrative Expenses
Selling, general and administrative expenses for the years ended March 31, 2006 and 2005 were as follows:
In thousands of
In millions of yen U.S. dollars
2006 2005 2006
Sales promotion and advertising ¥121,453 ¥132,727 $1,033,908
Freight 21,177 19,757 180,276
Bad debts expense 1,041 4,602 8,866
Salaries and wages 80,588 86,906 686,035
Pension expenses 5,382 4,348 45,820
Severance payments to directors and corporate auditors 649 796 5,528
Depreciation 19,003 14,150 161,777
Research and development 60,345 68,775 513,707
Others 103,118 111,011 877,830
Total ¥412,760 ¥443,076 $3,513,750
Notes to Consolidated Financial Statements