Canon 2003 Annual Report Download - page 71

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(13) Common Stock
During the years ended December 31, 2003, 2002 and 2001, the
Company issued 2,202,401 shares, 2,853,912 shares and
655,309 shares of common stock, respectively. The issuance of
243,360 shares during the year ended December 31, 2002 was
in connection with the acquisition of the outstanding minority
ownership interest of 37% of Canon Components, Inc. The
acquisition of the minority interest was consummated on May 1,
2002, whereby Canon Components Inc. became a wholly-owned
(14) Legal Reserve and Cash Dividends
The Japanese Commercial Code, amended effective on October 1,
2001, provides that an amount equal to at least 10% of
appropriations paid in cash be appropriated as a legal reserve until
an aggregated amount of additional paid-in capital and the legal
reserve equals 25% of common stock. Certain foreign subsidiaries
are also required to appropriate their earnings to legal reserves
under the laws of the respective countries. Canon’s equity in
retained earnings or deficit of affiliated companies of which it owns
20% to 50% accounted for on the equity basis aggregating positive
¥5,887 million ($55,019 thousand) at December 31, 2003 is
included in retained earnings.
Cash dividends and appropriations to the legal reserve charged
to retained earnings during the years ended December 31, 2003,
2002 and 2001 represent dividends paid out during those years
and the related appropriations to the legal reserve. Provision has
not been made in the accompanying consolidated financial
statements for the dividend for the second half year of ¥35 ($0.33)
per share, aggregating ¥30,791 million ($287,766 thousand),
proposed subsequent to December 31, 2003 by the Board of
Directors in respect of the year ended December 31, 2003.
The amount available for dividends under the Japanese
Commercial Code is based on the amount recorded in the
Company’s nonconsolidated books of account in accordance with
financial accounting standards of Japan. The adjustments,
included in the accompanying consolidated financial statements in
order to conform them to accounting principles generally accepted
in the United States of America, but not recorded in the books of
account, have no effect on the determination of retained earnings
available for dividends under the Japanese Commercial Code. The
amount available for dividends in the Company’s nonconsolidated
books of account under the Japanese Commercial Code amounted
to ¥944,769 million ($8,829,617 thousand) at December 31,
2003.
(15) Noncash Financing Activities
In the years ended December 31, 2003, 2002 and 2001, common
stock and additional paid-in capital arising from conversion of
convertible debt amounted to ¥3,297 million ($30,813 thousand),
¥3,908 million and ¥981 million, respectively.
As a result of the acquisition of the outstanding minority
ownership interest of Canon Components Inc. and the issuance of
common stock in connection with the acquisition during the year
ended December 31, 2002, goodwill classified as other assets and
additional paid-in capital increased by ¥795 million and ¥1,052
million, respectively, and minority interests decreased by ¥257
million.
subsidiary of the Company. The remaining issuance of the shares
of the Company was in connection with conversion of convertible
debt. Conversion into common stock of convertible debt issued
subsequent to October 1, 1982 has been accounted for by
crediting one-half of the conversion price and exercise price to
each of the common stock account and the additional paid-in
capital account.