Canon 2007 Annual Report Download - page 81

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The aggregate annual maturities of long-term debt out-
standing at December 31, 2007 were as follows:
Year ending December 31:
Thousands of
Millions of yen U.S. dollars
2008 ¥15,429 $135,342
2009 4,052 35,544
2010 2,446 21,456
2011 1,504 13,193
2012 455 3,991
Thereafter 223 1,956
¥24,109 $211,482
Certain property, plant and equipment with a net book
carrying value of ¥2,872 million ($25,193 thousand) at December
31, 2007 were mortgaged to secure loans from banks.
Canon entered into an agreement whereby certain assets
were deposited into an irrevocable trust to meet the debt service
requirements of the 2.27% Japanese yen notes of ¥10,000
million ($87,719 thousand). The assets contributed by Canon
were debt securities with carrying amounts of ¥10,115 million
($88,728 thousand) at December 31, 2007. Cash flows from
such investments will be used solely to satisfy the principal and
interest obligations for the debts. Accordingly, the debt securities
are included in the consolidated balance sheets under the
captions of marketable securities.
Both short-term and long-term bank loans are made under
general agreements which provide that security and guarantees
for present and future indebtedness will be given upon request
of the bank, and that the bank shall have the right to offset
cash deposits against obligations that have become due or, in
the event of default, against all obligations due to the bank.
The 1.30% Japanese yen convertible debentures due 2008
are convertible into approximately 128,000 shares of common
stock at a conversion price of ¥998.00 ($8.75) per share at
December 31, 2007.
13. Employee Retirement and Severance Benefits
The Company and certain of its subsidiaries have contributory
and noncontributory defined benefit pension plans covering
substantially all of their employees. Benefits payable under
the plans are based on employee earnings and years of service.
Certain foreign subsidiaries also have defined contribution
pension plans covering substantially all of their employees.
Effective January 1, 2007, the Company and certain of its
domestic subsidiaries have amended their funded defined
benefit pension plans, and the projected benefit obligation has
decreased by ¥101,620 million ($891,404 thousand) primarily
due to the modification of the pattern of future benefit pay-
ments. In conjunction therewith, the Company and certain of
its domestic subsidiaries also have implemented an unfunded
retirement and severance plan and a defined contribution
pension plan for certain future pension benefits attributable
to employees’ future services.
The amounts of cost recognized for the defined contribution
pension plans of the Company and certain of its subsidiaries for
the years ended December 31, 2007, 2006 and 2005 were
¥10,262 million ($90,018 thousand), ¥6,233 million and
¥4,878 million respectively.
Canon uses a measurement date of December 31 for the
majority of its plans.
On December 31, 2006, Canon adopted the recognition and
disclosure provisions of SFAS No. 158, “Employers’ Accounting
for Defined Benefit Pension and Other Postretirement Plans, an
amendment of FASB Statements No. 87, 88, 106 and 132 (R)”
(“SFAS158”). SFAS 158 required Canon to recognize the
funded status (i.e., the difference between the fair value of
plan assets and the projected benefit obligations) of its pension
plans in the December 31, 2006 consolidated balance sheet,
with a corresponding adjustment to accumulated other
Trade payables are summarized as follows:
12. Trade Payables
December 31 Thousands of
Millions of yen U.S. dollars
2007 2006 2007
Notes ¥ 17,088 ¥ 15,902 $ 149,894
Accounts 497,138 477,156 4,360,860
¥514,226 ¥493,058 $4,510,754