Canon 2010 Annual Report Download - page 79
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Please find page 79 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 2010 77
Canon has policies in place to ensure that its products are sold
to customers with an appropriate credit history, and continu-
ously monitors its customers’ credit quality based on informa-
tion including length of period in arrears, macroeconomic
conditions, initiation of legal proceedings against customers
and bankruptcy fi lings. The allowance for credit losses of
fi nance receivables are evaluated collectively based on historical
experience of credit losses. An additional reserve for individual
accounts is recorded when Canon becomes aware of a cus-
tomer’s inability to meet its fi nancial obligations, such as in the
case of bankruptcy fi lings. Finance receivables which are past
due or individually evaluated for impairment at December 31,
2010 are not signifi cant.
The cost of equipment leased to customers under operating
leases included in property, plant and equipment, net at
December 31, 2010 and 2009 was ¥63,239 million ($780,728
thousand) and ¥53,807 million, respectively. Accumulated
depreciation on equipment under operating leases at
December 31, 2010 and 2009 was ¥43,829 million ($541,099
thousand) and ¥39,992 million, respectively.
The following is a schedule by year of the future minimum
lease payments to be received under fi nancing leases and non-
cancelable operating leases at December 31, 2010.
Year ending December 31: Millions of yen Thousands of U.S. dollars
Financing leases Operating leases Financing leases Operating leases
2011 ¥ 84,049 ¥11,581 $1,037,642 $142,975
2012 60,245 6,449 743,765 79,617
2013 39,883 3,365 492,383 41,543
2014 21,143 1,456 261,025 17,975
2015 9,945 532 122,778 6,568
Thereafter 660 163 8,148 2,013
¥215,925 ¥23,546 $2,665,741 $290,691
In March 2010, Canon acquired 45.2% of the total outstanding
shares of Océ N.V. (“Océ”), which is listed on NYSE Euronext
Amsterdam, principally through a fully self-funded public cash
tender offer for consideration of ¥50,374 million ($621,901
thousand), in addition to the 22.9% interest Canon held before
the public cash tender offer. In addition, Canon acquired Océ’s
convertible cumulative fi nancing preference shares represent-
ing 19.1% of the total outstanding shares of Océ for consider-
ation of ¥8,027 million ($99,099 thousand). As a result, Canon’s
aggregate interest represents 87.2% of the total outstanding
shares of Océ. The fair value of the 12.8% noncontrolling inter-
est in Océ of ¥18,245 million ($225,247 thousand) was mea-
sured based on the quoted price of Océ’s common stock on
the acquisition date.
The acquisition was accounted for using the acquisition
method. Prior to the March 2010 acquisition date, Canon
accounted for its 22.9% interest in Océ using the equity meth-
od. The acquisition-date fair value of the previous equity inter-
est of ¥25,508 million ($314,914 thousand) was remeasured
8. Acquisitions
using the quoted price of Océ’s common stock on the acquisi-
tion date and included in the measurement of the total acquisi-
tion consideration. In connection with the acquisition, Canon
repaid ¥55,378 million ($683,679 thousand) of Océ’s existing
bank debt and ¥22,936 million ($283,160 thousand) of Océ’s
existing United States Private Placement notes, which are
included in decrease in short-term loans in the consolidated
statement of cash fl ows.
Océ is engaged in research and development, manufacture
and sale of document management systems, printing systems
for professionals and high-speed, wide format digital printing
systems. Canon and Océ have complementary technologies
and products and would benefi t from this strong business rela-
tionship. Amid the increasingly competitive printing industry,
Canon is further strengthening its business foundation in order
to solidify its position as one of the global leaders. Canon aims
to provide diversifi ed solutions to its customers in the printing
industry by making Océ a consolidated subsidiary.