Omron 2002 Annual Report Download - page 42

The Company and its domestic subsidiaries are subject to a number of taxes based on income, which in the
aggregate resulted in a normal tax rate of approximately 42.0% in 2002, 2001 and 2000.
The approximate effect of temporary differences and tax credit and loss carryforwards that gave rise to deferred
tax balances at March 31, 2002 and 2001 were as follows:
Millions of yen Thousands of U.S. dollars
2002 2001 2002
Deferred Deferred Deferred Deferred Deferred Deferred
tax tax tax tax tax tax
assets liabilities assets liabilities assets liabilities
Inventory valuation ............................................ ¥ 3,521 ¥ — ¥ 1,882 ¥ — $ 26,470 $ —
Accrued bonuses and vacations ....................... 3,492 — 4,067 — 26,254 —
Termination and retirement benefits.................. 12,912 — 10,809 — 97,082 —
Enterprise taxes................................................. 164 — 1,094 — 1,230 —
Intercompany profits ......................................... 2,540 — 2,270 — 19,097 —
Marketable securities ........................................ — 3,164 — 3,370 — 23,786
Property, plant and equipment.......................... 2,789 — ——20,971 —
Allowance for doubtful receivables ................... 2,711 180 611 116 20,383 1,357
Bad debt expenses ........................................... ——4,118 — ——
Gain on sale of land........................................... — 1,311 — 1,311 — 9,857
Minimum pension liability adjustment ............... 15,369 — 5,251 — 115,558 —
Other temporary differences ............................. 11,871 1,639 8,596 4,424 89,259 12,321
Tax credit carryforwards.................................... 3,689 — 3,473 — 27,738 —
Operating loss carryforwards ............................ 12,961 — 4,415 — 97,449 —
Subtotal ........................................................... 72,019 6,294 46,586 9,221 541,491 47,321
Valuation allowance........................................... (9,574) — (7,795) — (71,983) —
Total ........................................................... ¥62,445 ¥6,294 ¥38,791 ¥9,221 $469,508 $47,321
The total valuation allowance increased by ¥1,779 million ($13,376 thousand), ¥1,310 million and ¥1,681 million in
2002, 2001 and 2000, respectively.
As of March 31, 2002, the Company and certain subsidiaries had operating loss carryforwards approximating
¥30,566 million ($229,820 thousand) available for reduction of future taxable income, the majority of which expire in
2007.
The Company has not provided for Japanese income taxes on unremitted earnings of subsidiaries to the extent
that they are believed to be indefinitely reinvested. The unremitted earnings of the foreign subsidiaries which are
considered to be indefinitely reinvested and for which Japanese income taxes have not been provided were
¥53,928 million ($405,474 thousand) and ¥50,052 million at March 31, 2002 and 2001, respectively. It is not practi-
cable to estimate the amount of unrecognized deferred Japanese income taxes on these unremitted earnings.
Dividends received from domestic subsidiaries are expected to be substantially free of tax.
Net sales and total assets of foreign subsidiaries for the years ended March 31, 2002, 2001 and 2000 were as follows:
Thousands of
Millions of yen U.S. dollars
2002 2001 2000 2002
Net sales ............................................................................ ¥176,096 ¥170,434 ¥158,122 $1,324,030
Total assets........................................................................ ¥146,734 ¥141,966 ¥115,532 $1,103,263
The Company accounts for its earnings per share in accordance with SFAS No. 128, “Earnings per Share.” Basic
net income (loss) per share has been computed by dividing net income (loss) available to common shareholders by
the weighted-average number of common shares outstanding during each year. Diluted net income (loss) per share
reflects the potential dilution of convertible bonds and stock options, and has been computed by the if-converted
method for convertible bonds and by the treasury stock method for stock options.
A reconciliation of the numerators and denominators of the basic and diluted net income (loss) per share computa-
tions is as follows:
Thousands of
Millions of yen U.S. dollars
2002 2001 2000 2002
Income (loss) before cumulative
effect of accounting change........................................... ¥(16,157) ¥22,297 ¥11,561 $(121,481)
Effect of dilutive securities:
Convertible bonds, due 2004 ..................................... —325 325 —
Diluted net income (loss).................................................... ¥(16,157) ¥22,622 ¥11,886 $(121,481)
40 Omron Corporation
12. Per Share Data
11. Foreign
Operations