Ricoh 2007 Annual Report Download - page 64

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63 ANNUAL REPORT 2007
Intersegment sales between geographic areas are made at cost plus profit. Operating income by geographic area is sales less expense related to the
area’s operating revenue.
No single customer accounted for 10% or more of the total revenues for the periods ended as of March 31, 2005, 2006 and 2007.
20. SUPPLEMENTARY INFORMATION TO THE STATEMENT OF INCOME
The following amounts were charged to selling, general and administrative expenses for the years ended March 31, 2005, 2006 and 2007:
Thousands of
Millions of Yen U.S. Dollars
2005 2006
2007 2007
Research and development costs ¥110,471 ¥110,381
¥114,985 $974,449
Advertising costs 16,441 15,725
14,456 122,508
Shipping and handling costs 14,043 16,058
19,280 163,390
21. SUBSEQUENT EVENT
On June 1, 2007, Ricoh and IBM Corporation (“IBM”) completed formation of a joint venture company based on IBM’s Printing Systems Division to
provide output solutions for production printing area. Initially, Ricoh acquired 51% of the joint venture. Ricoh will progressively acquire the
remaining 49% over the next three years as the joint venture becomes a fully owned subsidiary. Ricoh paid $725 million (including management
fee $35 million) in cash at the closing. The cash payment was consideration for the initial 51% acquisition of the joint venture by Ricoh as well as a
prepayment for the remaining 49% to be acquired and certain royalties and services to be provided by IBM to InfoPrint Solutions Company. Final
consideration for this transaction will be determined at the end of the three-year period based upon the participation in the profits and losses
recorded by the equity partners.