Ricoh 2006 Annual Report Download - page 51

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ANNUAL REPORT 2006
To Our Shareholders and
Customers
General Information
by Business Area Ricoh's Core Values Solutions Environmental Financial Section
As of March 31, 2006, Ricoh had outstanding contractual comm itments
for acquisition or construction of plant, equipment and other assets
aggregating ¥2,774 m illion ( $23,709 thousand) .
As of March 31, 2006, Ricoh was also contingently liable for certain
guarantees induding em ployees housing loans of ¥1,193 million
( $10,197 thousand) .
Ricoh m ade rental paym ents totaling ¥40,339 m illion, ¥39,000 m illion
and ¥42,046 m illion ( $359,368 thousand) for the years ended March
31, 2004, 2005 and 2006, respectively, under cancelable and non-
cancelable operating lease agreements for office space and m achinery
and equipment.
The minim um rental payments required under operating lease that
have lease term s in excess of one year as of March 31, 2006 are as
follows,
Thousands of
Years ending March 31 Millions of Yen U.S. Dollars
2007 ¥14,693 $125,581
2008 12,804 109,436
2009 10,100 86,325
2010 6,350 54,274
2011 4,114 35,162
2012 and thereafter 9,855 84,231
Total ¥57,916 $495,009
As of March 31, 2006, the Company and certain of its subsidiaries were
parties to litigation involving routine matters, such as patent rights. In
the opinion of management, the ultimate liability, if any, resulting from
such litigation will not materially affect the consolidated financial
position or the results of operations of Ricoh.
1 5 . COMMITMENTS AND CONTINGENT LIABILITIES
( a) Cash and cash equivalents, Time deposits, Tr ade
receivables, Shor t-term bor rowings, Cur r ent
matur ities of long-term indebtedness, Trade payables
and Accrued expenses
The carrying am ounts approximate fair values because of the short
maturities of these instruments.
( b) Mar ketable securities and Investment securities
The fair value of the m arketable securities and investm ent securities is
principally based on quoted market price.
( c) Installment loans
The fair value of installment loans is based on the present value of
future cash flows using the current rate for similar instrum ents of
comparable maturity.
( d) Long-term indebtedness
The fair value of each of the long-term indebtedness instrum ents is
based on the quoted price in the most active market or the present value
of future cash flows associated with each instrum ent discounted using
the current borrowing rate for sim ilar instruments of com parable
maturity.
( e) Interest r ate swap agr eements
The fair value of interest rate swap agreem ents is estimated by
obtaining quotes from brokers.
( f) Foreign cur rency contr acts and For eign cur r ency
options
The fair value of foreign currency contracts and foreign currency
options is estim ated by obtaining quotes from brokers.
The estim ated fair value of the financial instrum ents as of March 31,
2005 and 2006 is summ arized as follows:
1 6 . DISCLOSURES ABOUT THE FAIR VALUE OF FINANCIAL INSTRUMENTS
Millions of Yen Thousands of U.S. Dollars
2005 2006 2006
Carrying Estimated Carrying Estimated Carrying Estimated
Am ount Fair Value Am ount Fair Value Amount Fair Value
Marketable securities and
Investm ent securities ¥ 31,292 ¥ 31,292 ¥ 3 6 ,5 8 1 ¥ 3 6 ,5 8 1 $ 3 1 2 ,6 5 8 $ 3 1 2 ,6 5 8
Installment loans 50,131 50,292 52,295 52,404 446,966 447,897
Long-term indebtedness ( 226,567) ( 228,839) ( 1 9 5 ,6 2 6 ) ( 1 9 5 ,7 3 1 ) ( 1 ,6 7 2 ,0 1 7 ) ( 1 ,6 7 2 ,9 1 5 )
Interest rate swap agreements, net 1,683 1,683 1,175 1,175 10,043 10,043
Foreign currency contracts, net 181 181 ( 1 ,1 4 7 ) ( 1 ,1 4 7 ) ( 9 ,8 0 3 ) ( 9 ,8 0 3 )
Foreign currency options, net ( 813) ( 813) ( 2 7 0 ) ( 2 7 0 ) ( 2 ,3 0 8 ) ( 2 ,3 0 8 )