Pioneer 2008 Annual Report Download - page 30

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PIONEER CORPORATION
28
We have the following accounts receivable securiti-
zation programs.
In the United States of America, we have established
PUSA Receivables Funding Corporation, a wholly owned,
bankruptcy-remote, special-purpose entity and established an
accounts receivable securitization program of eligible trade
accounts receivable. A bankruptcy-remote subsidiary is a
company that has been structured so as to make it highly
unlikely that it would be drawn into a bankruptcy of any
Pioneer Group companies. Through this program, we can
securitize and sell, without recourse, on a revolving basis, an
undivided interest up to US$100 million in that pool of receiv-
ables to third-party conduits owned by a bank. These securitiza-
tion transactions are accounted for as sales in accordance with
SFAS No. 140, “Accounting for Transfers and Servicing of
Financial Assets and Extinguishments of Liabilities,” because we
have surrendered control over the receivables. We sold a total of
¥14.7 billion of receivables under this program in fiscal 2008.
In Japan and foreign countries, we set up several
accounts receivable sale programs of eligible trade accounts
receivable. Through these programs, we can sell receivables,
without recourse, to financial institutions. These transactions
are accounted for as sales in accordance with SFAS No. 140,
because we have surrendered control over the receivables. We
sold a total of ¥18.3 billion of receivables under these pro-
grams in fiscal 2008.
We utilize these programs to diversify our options to
increase the flexibility of our cash flow management. Therefore,
our cash flow management would not be critically effected
without these programs.