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65
Annual Report 2007
The Company acquired 99,000,000 shares of common stock and 20,000,000 shares of subordinate common
stock with voting rights issued by Toyo as a result of the business split and business merger transactions. As a
result, Epson Toyocom was owned 67.9% by the Company (without considering dilutive shares), after the transac-
tions. Epson Toyocom has been a consolidated subsidiary of the Company.
The composition of the assets acquired and liabilities assumed from the Toyo Group in the year ended March
31, 2006 was as follows:
Millions of yen
Year ended
March 31,
2006
Current assets ¥32,128
Fixed assets 31,224
Short-term borrowings (100)
Current portion of long-term debt (7,144)
Current liabilities (8,773)
Long-term debt (5,673)
Long-term liabilities (8,402)
Consolidation adjustment (6,840)
Minority interest in subsidiaries (13,996)
Change in interest due to business combination (12,424)
Cash and cash equivalents held by the Toyo Group 12,204
Proceeds from business combination, net of payment ¥ 12,204
(3) Acquisition of Yasu Semiconductor Corporation
The Company held 50% of the total outstanding shares of Yasu Semiconductor Corporation (“YSC”), a 50:50 joint
venture established with International Business Machines Corporation and its affiliates (collectively, “IBM”), with the
aim of, among other things, operating a facility that produces semiconductors.
IBM had an option to sell its 50% of YSC shares to the Company for ¥9,450 million ($80,051 thousand) effec-
tive from the end of June 2006, while the Company had an option to buy those shares for the same amount effec-
tive from the same date. Their respective options were exercised on July 1, 2006. As a result, YSC became a wholly
owned subsidiary of the Company.
The goodwill arising from the acquisition of the shares totaled ¥1,937 million ($16,408 thousand). Due to the
dissolution of YSC, the goodwill was impaired in full and recognized as part of reorganization costs for the year
ended March 31, 2007.
The consolidated financial statements include YSC’s financial results from July 1, 2006 to March 31, 2007.
The assets acquired and liabilities assumed on the date of the business combination in accordance with pur-
chase method were ¥10,075 million ($85,345 thousand) and ¥3,324 million ($28,158 thousand), respectively.
Upon acquisition, net cash payments of ¥3,306 million ($28,005 thousand) represented cash and cash equiva-
lents of ¥6,144 million ($52,046 thousand) held by YSC at the date of the acquisition, which were offset by the cash
consideration of ¥9,450 million ($80,051 thousand) for the acquisition. It was disclosed as “Payments for acquisition
of additional stock of an affiliate” in the consolidated statements of cash flows for the year ended March 31, 2007.