Hitachi 2004 Annual Report Download - page 52

48 Hitachi, Ltd. Annual Report 2005
8. SECURITIZATIONS
For the years ended March 31, 2005, 2004 and 2003, Hitachi Capital Corporation (HCC), a financing subsidiary, sold
primarily lease receivables, to Special Purpose Entities (SPE), and the SPEs issued asset-backed commercial papers to
investors. The investors and the SPEs have no recourse to HCC’s other assets for failure of debtors to pay when due.
HCC retained servicing responsibilities and subordinated interests, but has not recorded a servicing asset or liability
since the cost to service the receivables approximates the servicing income. The retained interests are not material and
are subordinate to investor’s interests. For the years ended March 31, 2005, 2004 and 2003, gains recognized on the
sale of lease receivables amounted to ¥12,985 million ($121,355 thousand), ¥12,394 million and ¥8,278 million, respectively.
The table below summarizes certain cash flows received from and paid to the SPEs during the years ended March 31,
2005, 2004 and 2003:
Thousands of
Millions of yen U.S. dollars
2005 2004 2003 2005
Proceeds from transfer of lease receivables . . . . . . . . ¥310,668 ¥271,281 ¥249,430 $2,903,439
Servicing fees received . . . . . . . . . . . . . . . . . . . . . . . . . 22 23 27 206
Purchases of delinquent or ineligible assets . . . . . . . . (25,717) (14,775) (8,174) (240,346)
Quantitative information about delinquencies, net credit losses, and components of lease receivables subject to transfer
and other assets managed together as of and for the year ended March 31, 2005 are as follows:
Thousands of
Millions of yen U.S. dollars
Principal Principal
Total amount of Total amount of
principal receivables principal receivables
amount of 90 days or Net credit amount of 90 days or Net credit
receivables more past due losses receivables more past due losses
2005 2005
Total assets managed or transferred:
Lease receivables . . . . . . . . . . . . . . . . . ¥1,096,553 ¥737 ¥951 $10,248,159 $6,888 $8,888
Assets transferred . . . . . . . . . . . . . . . . . (569,794) (5,325,178)
Assets held in portfolio . . . . . . . . . . . . . . . ¥ 526,759 $ 4,922,981
For the years ended March 31, 2005, 2004 and 2003, the Company and certain subsidiaries sold trade receivables
mainly to SPEs which securitized these receivables. In these securitizations, the Company and certain subsidiaries retained
servicing responsibility. No servicing asset or liability has been recorded because the fees for servicing the receivables
approximate the related costs. In addition, the Company and certain subsidiaries retained subordinated interests which
were not material.
During the years ended March 31, 2005, 2004 and 2003, proceeds from the transfer of trade receivables were ¥1,252,656
million ($11,707,065 thousand), ¥1,006,164 million and ¥1,080,805 million, respectively, and losses recognized on those
transfers were ¥3,388 million ($31,664 thousand), ¥2,973 million and ¥2,965 million, respectively.
9. GOODWILL AND OTHER INTANGIBLE ASSETS
Intangible assets other than goodwill acquired during the years ended March 31, 2005, 2004 and 2003 amounted to
¥228,085 million ($2,131,636 thousand), ¥190,059 million and ¥262,460 million, respectively, and related amortization
expense during the years ended March 31, 2005, 2004 and 2003 amounted to ¥132,370 million ($1,237,103 thousand),
¥117,561 million and ¥86,095 million, respectively.
The main component of intangible assets subject to amortization was capitalized software. Amortization of capitalized
computer software costs for software to be sold, leased or otherwise marketed is charged to cost of sales.