Canon 2010 Annual Report Download - page 100
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Please find page 100 of the 2010 Canon annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.CANON ANNUAL REPORT 201098
Guarantees
Canon provides guarantees for bank loans of its employees,
affi liates and other companies. The guarantees for the employ-
ees are principally made for their housing loans. The guaran-
tees of loans of its affi liates and other companies are made to
ensure that those companies operate with less fi nancial risk.
For each guarantee provided, Canon would have to perform
under a guarantee if the borrower defaults on a payment within
the contract periods of 1 year to 30 years, in the case of
employees with housing loans, and of 1 year to 10 years, in the
case of affi liates and other companies. The maximum amount
of undiscounted payments Canon would have had to make in
the event of default is ¥16,746 million ($206,741 thousand) at
December 31, 2010. The carrying amounts of the liabilities rec-
ognized for Canon’s obligations as a guarantor under those
guarantees at December 31, 2010 were not signifi cant.
Canon also issues contractual product warranties under
which it generally guarantees the performance of products
delivered and services rendered for a certain period or term.
Changes in accrued product warranty cost for the years ended
December 31, 2010 and 2009 are summarized as follows:
Years ended December 31
Millions of yen
Thousands of
U.S. dollars
2010 2009 2010
Balance at beginning of year ¥13,944 ¥17,372 $172,148
Addition 17,605 21,670 217,346
Utilization (14,713) (22,050) (181,642)
Other (3,493) (3,048) (43,124)
Balance at end of year ¥13,343 ¥13,944 $164,728
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
CANON INC. AND SUBSIDIARIES
Future minimum lease payments required under noncancelable operating leases that have initial or remaining lease terms in
excess of one year at December 31, 2010 are as follows:
Year ending December 31:
Millions of yen
Thousands of
U.S. dollars
2011 ¥23,413 $ 289,049
2012 22,054 272,272
2013 10,290 127,037
2014 8,359 103,198
2015 5,582 68,914
Thereafter 14,102 174,098
Total future minimum lease payments ¥83,800 $1,034,568
Legal proceedings
In October 2003, a lawsuit was fi led by a former employee
against the Company at the Tokyo District Court in Japan. The
lawsuit alleges that the former employee is entitled to ¥45,872
million ($566,321 thousand) as reasonable remuneration for an
invention related to certain technology used by the Company,
and the former employee has sued for a partial payment of
¥1,000 million ($12,346 thousand) and interest thereon. On
January 30, 2007, the Tokyo District Court of Japan ordered the
Company to pay the former employee approximately ¥33.5 mil-
lion ($414 thousand) and interest thereon. On the same day, the
Company appealed the decision. On February 26, 2009, the
Intellectual Property High Court of Japan issued a judgment in
the appellate court review and ordered the Company to pay the
former employee approximately ¥69.6 million ($859 thousand),
consisting of reasonable remuneration of approximately ¥56.3
million ($695 thousand) and interest thereon. On March 12, 2009,
the Company appealed the decision to the Supreme Court. On
October 19, 2010, the Supreme Court, by an order, dismissed the
Company’s appeal without prejudice, and the judgment made by
the Intellectual Property High Court became fi nal and binding.
In Germany, Verwertungsgesellschaft Wort (“VG Wort”), a col-
lecting society representing certain copyright holders, has fi led
a series of lawsuits seeking to impose copyright levies upon
digital products such as PCs and printers, that allegedly enable
the reproduction of copyrighted materials, against the compa-
nies importing and distributing these digital products. VG Wort
fi led a lawsuit in January 2006 against Canon seeking payment
of copyright levies on single-function printers, and the court of
fi rst instance in Düsseldorf ruled in favor of the claim by VG
Wort in November 2006. Canon lodged an appeal against such
decision in December 2006 before the court of appeals in
Düsseldorf. Following a decision by the same court of appeals
in Düsseldorf on January 23, 2007 in relation to a similar court
case seeking copyright levies on single-function printers of
Epson Deutschland GmbH, Xerox GmbH and Kyocera Mita
Deutschland GmbH, whereby the court rejected such alleged
levies, in its judgment of November 13, 2007, the court of
appeals rejected VG Wort’s claim against Canon. VG Wort
appealed further against said decision of the court of appeals
before the Federal Supreme Court. In December 2007, for a
similar Hewlett-Packard GmbH case relating to single-function