Omron 2002 Annual Report Download - page 38

The annual maturities of long-term debt outstanding at March 31, 2002 were as follows:
Thousands of
Years ending March 31 Millions of yen U.S. dollars
2003 ................................................................................................................................ ¥ 1,192 $ 8,962
2004 ................................................................................................................................ 12,625 94,925
2005 ................................................................................................................................ 29,998 225,549
2006 ................................................................................................................................ 141 1,060
2007 ................................................................................................................................ 32 240
Total ................................................................................................................................ ¥43,988 $330,736
The convertible bonds may be purchased at any time by the Company or its subsidiaries principally at any price
in the open market or otherwise, and may be redeemed at the Company’s option prior to maturity. The convertible
bonds are redeemable, in whole or in part, beginning October 1997 at 106% of face value, decreasing 1% per year.
At March 31, 2002 the convertible bonds were redeemable, in whole or in part, at 102%.
The number of contingently issuable shares of common stock related to the convertible bonds as of March 31,
2002 was 10,026,639 shares. The conversion price per share at March 31, 2002 was ¥2,965 ($22.29), subject to
anti-dilutive provisions.
As is customary in Japan, additional security must be given if requested by a lending bank, and banks have the
right to offset cash deposited with them against any debt or obligation that becomes due and, in case of default
and certain other specified events, against all debt payable to the banks. The Companies have never received any
such requests.
As is customary in Japan, the Company and domestic subsidiaries maintain deposit balances with banks with
which they have short- or long-term borrowings. Such deposit balances are not legally or contractually restricted as
to withdrawal.
Total interest cost incurred and charged to expense for the years ended March 31, 2002, 2001 and 2000 amount-
ed to ¥1,291 million ($9,707 thousand), ¥1,731 million and ¥1,897 million, respectively.
The Companies have operating lease agreements primarily involving offices and equipment for varying periods.
Leases that expire generally are expected to be renewed or replaced by other leases. At March 31, 2002, future
minimum rental payments applicable to non-cancelable leases having initial or remaining non-cancelable lease
terms in excess of one year were as follows:
Thousands of
Years ending March 31 Millions of yen U.S. dollars
2003 ................................................................................................................................ ¥ 2,635 $ 19,812
2004 ................................................................................................................................ 2,449 18,413
2005 ................................................................................................................................ 2,235 16,804
2006 ................................................................................................................................ 2,093 15,737
2007 ................................................................................................................................ 2,050 15,414
2008 and thereafter ........................................................................................................ 19,071 143,391
Total ................................................................................................................................ ¥30,533 $229,571
Rental expense amounted to ¥11,322 million ($85,128 thousand), ¥11,232 million and ¥11,120 million for the
years ended March 31, 2002, 2001 and 2000, respectively.
The Company has a contract with an outside service organization for outsourcing computer services. The con-
tract requires an annual service fee of ¥4,922 million ($37,008 thousand) for the year ending March 31, 2003. The
annual service fee will gradually decrease each year during the contract term to ¥4,518 million ($ 33,970 thousand)
for 2008. The contract is cancelable subject to a penalty of 15% of aggregate service fees payable for the remain-
ing term of the contract.
The Company and its domestic subsidiaries sponsor termination and retirement benefit plans which cover sub-
stantially all domestic employees. Benefits are based on the employee’s years of service, with some plans consid-
ering compensation and certain other factors. If the termination is involuntary, the employee is usually entitled to
greater payments than in the case of voluntary termination.
The Company and its domestic subsidiaries fund a portion of the obligations under these plans. The general
funding policy is to contribute amounts computed in accordance with actuarial methods acceptable under
Japanese tax law. The Company and substantially all domestic subsidiaries have a contributory termination and
retirement plan which is interrelated with the Japanese government social welfare program and consists of a basic
portion requiring employee and employer contributions plus an additional portion established by the employers.
Periodic pension benefits required under the basic portion are prescribed by the Japanese Ministry of Health,
Labour and Welfare, commence at age 65 and continue until the death of the surviving spouse. Benefits under the
additional portion are usually paid in a lump sum at the earlier of termination or retirement although periodic pay-
ments are available under certain conditions.
36 Omron Corporation
7. Termination and
Retirement
Benefits
6. Leases