Ricoh 2002 Annual Report Download - page 39

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5 . FINANCE RECEIVABLES
Finance receivables as of March 31, 2001 and 2002 are com prised of lease receiv-
ables and installm ent loans.
Ricoh’s products are leased to dom estic custom ers prim arily through Ricoh
Leasing Com pany, Ltd., a maj ority-owned subsidiary, and to overseas custom ers
primarily through certain overseas subsidiaries. These leases are accounted for as
sales-type leases in conform ity with SFAS No.13. Revenues from sales-type leases
are recognized at the inception of the leases.
Information pertaining to Ricoh’s lease receivables as of March 31, 2001 and
2002 is as follows:
Minimum lease
payments receivable
Unearned income
Allowance for doubtful
receivables
Net lease receivables
Thousands of
U.S. dollars
2 0 0 2
$3,476,361
(380,271)
( 9 7 ,1 8 8 )
$2,998,902
Millions of yen
2002
2001
¥442,886
(49,995)
(11,992)
¥380,899
¥462,356
( 5 0 ,5 7 6 )
( 1 2 ,9 2 6 )
¥398,854
Carrying value of retained interests
( included in lease deposits and other
in the consolidated balance sheets)
Expected credit losses:
+ 10%
+ 20%
Discount rate:
+ 10%
+ 20%
Thousands of
U.S. dollars
2 0 0 2
$151,534
1,083
2,158
662
1,316
Millions of yen
2002
¥ 2 0 ,1 5 4
144
287
8 8
175
As of March 31, 2002, the minim um lease payments receivable due in each of
the next five years and thereafter are as follows:
Thousands of
U.S. dollars
2003
2004
2005
2006
2007
2008 and thereafter
Total
$1,099,925
947,593
728,880
451,632
195,444
52,887
$3,476,361
Millions of yen
¥146,290
126,030
96,941
60,067
25,994
7,034
¥462,356
Years ending March 31
Installm ent loans, net of allowance for doubtful receivables, as of March 31, 2001
and 2002 are primarily comprised of housing loans and term loans aggregating
¥47,891 and ¥48,975 million ( $368,233 thousand) , respectively.
Ricoh sold finance lease receivables with a pretax gain of ¥175 m illion and
¥225 m illion ( $1,692 thousand) for the years ended March 31, 2001 and 2002, re-
spectively, through securitization transactions. Servicing assets or liabilities relat-
ed to securitization transactions initiated were not recorded, because the servicing
fees adequately compensate Ricoh. Ricoh’s retained interests are subordinate to
the investor’s interests. Their value is subject to credit and interest rate risk on the
sold financial assets. The investors and Special Purpose Entities have no recourse
to our other assets for failure of debtors to pay.
Key econom ic assum ptions used in m easuring the fair value of retained in-
terests related to securitization transactions completed during the year ended
March 31, 2001 and 2002 were as follows:
The hypothetical scenario does not reflect expected m arket conditions and should
not be used as a prediction of future perform ance. As the figures indicate, changes
in fair value may not be linear. Also, in the above table, the effect of a variation in
a particular assum ption on the fair value of the retained interest is calculated
without changing any other assum ption; in reality, changes in one factor may re-
sult in changes in another, which m ight m agnify or counteract the sensitivities.
The following table summ arizes certain cash flows received from and paid to
the Special Purpose Entities for all securitization activity for the years ended
March 31, 2001 and 2002:
The im pacts of 10% and 20% adverse changes to the key economic assum ptions
on the fair value of retained interests as of March 31, 2002 are presented below.
Expected credit losses
Discount rate
2 0 0 2
0 .7 5 %-1 .3 5 %
0 .8 9 %-3 .0 0 %
2001
0.75%-1.35%
0.89%-3.00%
Proceeds from new securitization
Servicing fees received
Repurchases of delinquent or
ineligible assets
Thousands of
U.S. dollars
2 0 0 2
$188,970
293
3 8 ,6 3 2
Millions of yen
2002
2001
¥29,869
32
3,277
¥ 2 5 ,0 0 0
3 9
5 ,1 3 8
The pro form a results of operations are not necessarily indicative of the actu-
al results of operations that would have occurred had the acquisition been m ade
at the beginning of the respective years or of results which may occur in the fu-
ture.
Net sales
Net incom e
20012000
¥1,624,036
49,474
¥ 1,574,465
43,861
Millions of yen
Net incom e per share of com mon stock—
Basic
Diluted
20012000
¥71.43
66.03
¥63.41
58.63
Yen