Ricoh 2001 Annual Report Download - page 49

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1 6 . COMMITMENTS AND CONTINGENT LIABILITIES
At March 31, 2001, Ricoh had outstanding contractual com m itments for acquisi-
tion or construction of plant, equipment and other assets aggregating ¥1,355 m il-
lion ( $10,754 thousand) .
Ricoh is contingently liable for discounted trade notes receivable on a full re-
course basis with banks of ¥157 million ( $1,246 thousand) as of March 31, 2001.
As of March 31, 2001, Ricoh is also contingently liable as guarantor for employ-
ees’ housing loans of ¥901 m illion ( $7,151 thousand) .
Ricoh m ade rental payments totaling ¥46,307 million in fiscal 1999, ¥43,797
million in fiscal 2000, and ¥39,956 million ( $317,111 thousand) in fiscal 2001,
under operating lease agreements for office space and machinery and equipment,
which are primarily cancelable and renewable.
At March 31, 2001, the Company and certain of its subsidiaries were parties to
litigation involving routine matters, such as patent rights. In the opinion of
managem ent, the ultimate liability, if any, resulting from such litigation will not
materially affect the consolidated financial position or the results of operations of
Ricoh.
1 7 . DISCLOSURES ABOUT THE FAIR VALUE OF FINANCIAL INSTRUMENTS
( a) Cash and cash equivalents, Time deposits, Tr ade receivables,
Short-term borrowings, Current matur ities of long-term indebted-
ness, Trade payables and Accrued expenses
The carrying amounts approximate fair values because of the short m aturities of
these instruments.
( b) Marketable securities and Investment securities
The fair value of the m arketable securities and investm ent securities is principally
based on quoted market price.
( c) Long-term indebtedness
The fair value of each of the long-term indebtedness instruments is based on the
quoted price in the most active m arket or the present value of future cash flows
associated with each instrum ent discounted using the current borrowing rate for
sim ilar instruments of comparable maturity.
( d) Interest rate swap agreements
The fair value of interest rate swap agreem ents is estimated by obtaining quotes
from brokers.
( e) Foreign currency contracts and foreign currency options
The fair value of foreign currency contracts and foreign currency options ( used
for hedging purposes) is estim ated by obtaining quotes from brokers.
The estim ated fair value of the financial instrum ents as of March 31, 2000
and 2001 is sum m arized as follows:
Millions of yen
Marketable securities and Investment securities
Long-term indebtedness
Interest rate swap agreem ents, net
Foreign currency contracts, net credit
Foreign currency options, net
2001
Estim ated
fair value
$8 8 3 ,2 4 6
( 2 ,0 0 7 ,6 5 1 )
3 5 ,5 5 6
( 2 4 ,3 4 9 )
( 2 ,3 1 7 )
Carrying
am ount
$8 8 3 ,2 4 6
( 1 ,7 2 8 ,1 1 9 )
1,500
( 3 ,0 6 3 )
—
Estim ated
fair value
¥1 1 1 ,2 8 9
( 2 5 2 ,9 6 4 )
4 ,4 8 0
( 3 ,0 6 8 )
( 2 9 2 )
Carrying
am ount
¥111,289
(217,743)
189
( 3 8 6 )
—
Estim ated
fair value
¥157,553
( 379,727)
2,685
2,102
—
Carrying
am ount
¥157,553
( 307,962)
( 47)
2,314
—
2000
2001
Thousands of
U.S. dollars
Limitations
Fair value estimates are m ade at a specific point in time, based on relevant m ar-
ket information and inform ation about the financial instrum ent. These estim ates
are subj ective in nature and involve uncertainties and m atters of significant judg-
ment and therefore cannot be determ ined with precision. Changes in assum p-
tions could significantly affect the estimates.