Ricoh 2003 Annual Report Download

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ANNUAL REPORT 2003
W I N N I N G I N C O L O R
Annual Repor t 2 0 0 3
RICOH COMPANY, LTD.

Table of contents

  • Page 1
    W I N N I N G I N C O LO R ANNUAL REPORT 2003

  • Page 2
    ...tional and other printers, fax mac hines, personal c omputers, CD-Rec ordable, CD-ReWritable, and DVD+ ReWritable drives and media, and related supplies and servic es, as well as digital c ameras and advanc ed elec tronic devic es. We are rapidly building a solid presenc e worldwide as a provider of...

  • Page 3
    ...successful rollouts of laser printers in Japan and overseas that deliver color at speeds and prices com parable to those of m onochrom e m achines. Another key factor was printing solutions, in which we drew on our global sales and support structure to optim ize total printing costs and increase the...

  • Page 4
    ... e and increase sales and profits. The first is to replace m onochrom e products with color m odels. We are building a full lineup of com pact color m achines at prices com parable to m onochrom e m odels so we can secure new m arkets by m eeting new dem and for color. We won top m arks in Japan and...

  • Page 5
    Hiroshi Hamada (right ), Chairman and M asamit su Sakurai, President , Chief Execut ive Officer and Chief Operat ing Officer 3

  • Page 6
    ... global service and support structure that optim izes total printing costs for copiers and printers. We thus steadily increased the num ber of m ajor accounts worldwide. ORGANIZATIONAL I M PROVEM ENTS One of the highlights of the year was the establishm ent of Ricoh China Co., Ltd. This holding com...

  • Page 7
    ... 2004, and invite you to m onitor progress through our investor relations website ( www.ricoh.com /ir/) . As always, we deeply appreciate your support and encouragem ent, and look forward to a great fiscal 2004. June 26, 2003 Sincerely, Hiroshi Ham ada Chairm an Masam itsu Sakurai President...

  • Page 8
    ... Aficio 1224C/1232C (Imagio Neo C240/C320) series of workgroup MFPs integrates copying, printing, scanning, and optional faxing. These systems separate themselves from the competition by offering the convenience of color at highly affordable prices. At the click of a mouse or push of a button, users...

  • Page 9
    ...time and cost otherwise needed to develop color systems. The Ri10 is a central feature in our latest offerings, including the Aficio 1224C/1232C (Imagio Neo C240/C320) series. when two units are used in tandem for ultrahigh-volum e runs. As m entioned earlier, our direct sales, support, and service...

  • Page 10
    ... ent at the 6th Environm ental Report A wards. The awards were sponsored by the Global Environm ental Forum and were supported by Japan's Ministry of the Environm ent. For 2003, the Ja pa n In du stria l Jou rn a l bestowed the Global Environm ental A ward Grand Prix on Ricoh. We are determ ined to...

  • Page 11
    ... Dr. Klaus Toeofer, execut ive direct or of t he Unit ed Nat ions Environment al Programme. Support for Bushland Restoration in Australia Ricoh Aust ralia Pt y, Lt d., is funding an init iat ive at t he W arrimoo Public School, locat ed around 50 kilomet ers west of Sydney, Aust ralia, for st udent...

  • Page 12
    ... and services. Other im aging system s encom pass analog copiers, diazo copiers, supplies and services for ( Billions of Yen) W arwickPrint , t he print cent er at W arwick Universit y in t he Unit ed Kingdom, relies heavily on it s six Aficio 1105 copiers t o rip t hrough copy and print jobs at...

  • Page 13
    ... e landowner, chose t he Ricoh FAX4410NF, whose advanced net work connect ivit y capabilit ies include Color Scan t o Email, IP faxing, and LAN faxing right out of t he box. The Dr. Pet ers Group in Dort mund, Germany, a prominent issuing house for closed propert y funds and part icipat ions in...

  • Page 14
    ...the strength of new m odels that satisfied dem and for color, speed, and networking. Printing system s sales gained 36.6%, to ¥408.8 billion ( $3,465 m illion) , reflecting higher unit sales of MFPs and color laser printers. HIGHLIGHTS Printing syste m s: Two new digital color MFP series triggered...

  • Page 15
    DiscoverTec, Inc., in Jacksonville, Florida, chose it s Aficio CL5000 color laser print er t o provide imaging support for it s t echnology solut ions operat ions, which range from graphic and web design t o web host ing and server cust omizat ion. The Invest igat ion Depart ment of t he Nassau ...

  • Page 16
    ... headquart ers, including t he high-speed Aficio AP 3800C color laser print er, and also uses 160 Aficio copiers at offices t hroughout France. Othe r input/o utput syste m s: Dem and is rising for high-capacity rem ovable m edia that can seam lessly handle videos and other large data volum es...

  • Page 17
    ...int egrat es wit h exist ing mail infrast ruct ures t o significant ly boost workgroup product ivit y. Acxiom Corporation, a leading provider of customer and information management solutions based in Little Rock, Arkansas, uses Ricoh GlobalScan, which turns its Aficio M FPs into scanners that route...

  • Page 18
    .... We enjoyed steady gains in leasing and other operations, although sales decreased for m easurem ent entered the digital cam era arena in 1995, and now center on business m odels. A good exam ple is the Caplio G3 series, which elim inates the slow shutter response tim es of digital cam eras for...

  • Page 19
    ...s o lid a t e d S t a t e m e n t s o f C a s h F lo w s 30 N o t e s t o C o n s o lid a t e d F in a n c ia l S t a t e m e n t s 31 I n d e p e n d e n t A u d it o r 's R e p o r t 53 R ic o h 's G lo b a l N e t w o r k 54 S e n io r M a n a g e m e n t 55 C or por at e D at a 56 17

  • Page 20
    ... These sales represented 48.5% of net sales, up 2.5 percentage points. Operating Income Gross profit increased 6.5%, to ¥745.3 billion ( $6,317 m illion) . In both Japan and abroad, sales were up for high-m argin, high-value-added products, notably MFPs and laser printers. The gross profit gain...

  • Page 21
    ... Ricoh Group proposes solutions that optim ize total printing costs. Ricoh is thus shifting away from standalone analog equipm ent toward digital, networking, and color and high-speed technologies. These efforts allowed Ricoh to greatly expand sales of MFPs, laser printers, and other printing system...

  • Page 22
    .... This segm ent represented 26.7% of net sales, up 6.1 percentage points. Ricoh stepped up sales of new printing system s that m atched a dem and shift away from analog offerings toward networked digital PPCs and color m odels, and strove to expand sales to m ajor accounts. Sales were solid for DVD...

  • Page 23
    ...125,286 ¥45,000 - 10,809 ¥55,809 ¥10,000 - 17,110 ¥27,110 ¥35,000 - 10,434 ¥45,434 ¥160,124 24,028 212,757 ¥396,909 Thousands of U.S. dollars Expected maturity date Average pay rate...INTEREST RATE SWAPS Notional amounts ( Millions) Type of swap Average receive rate Average pay rate Total...

  • Page 24
    ... to digital and networking equipm ent, such as digital PPCs, MFPs, and laser printers, and m anufacturing facilities to m aintain and enhance com petitiveness. counterparty exposure and hedging practices. Ricoh does not hold or issue derivative financial instrum ents for trading purposes or to...

  • Page 25
    ..., and are not represented in the tables. m aturity date, weighted average interest rates and estimated fair value. Notional am ounts are generally used to calculate the contractual paym ents to be exchanged under the contract. CREDIT RISK Ricoh is also exposed to credit-related losses in the event...

  • Page 26
    S e le c t e d F in a n c ia l D a t a Ricoh Company, Ltd. and Consolidated Subsidiaries For the Years Ended March 31 1994 1995 For the Year: Net sales Cost of sales Selling, general and administrative expenses Income before income taxes, minority interests and equity in earnings of affiliates ...

  • Page 27
    Thousands of Millions of yen 1996 1997 1998 1999 2000 2001 2002 U.S. dollars 2003 2003 ¥1,113,030 683,406 374,246 51,020 28,251 21,869 ¥1,316,072 772,238 460,471 66,905 39,864 28,922 ¥1,403,...

  • Page 28
    ...Ricoh Company, Ltd. and Consolidated Subsidiaries March 31, 2002 and 2003 Millions of yen Thousands of U.S. dollars ASSETS Current Assets: Cash and cash equivalents Time deposits Marketable securities Trade...668 Property, Plant and Equipment, at Cost: Land Buildings Machinery and equipment ...

  • Page 29
    ...-Term Liabilities: Long-term indebtedness Accrued pension and severance costs Deferred income taxes 332,995 119,572 30,592 483...2003 Additional paid-in capital Retained earnings Accumulated other comprehensive income ( loss) Treasury stock at cost; 191,518 shares in 2002 and 2,303,443 shares in 2003...

  • Page 30
    ...Ricoh Company, Ltd. and Consolidated Subsidiaries For the Years Ended March 31, 2001, 2002 and 2003 2001 Millions of yen 2002 Thousands of U.S. dollars 2003 2003 Net Sales Cost of Sales Gross profit... 5 Income before Income Taxes, Minority Interests and Equity...Representing 5 Shares of Common Stock...

  • Page 31
    ... n s o lid a t e d S t a t e m e n t s o f S h a r e h o ld e r s ' I n v e s t m e n t Ricoh Company, Ltd. and Consolidated Subsidiaries For the Years Ended March 31, 2001, 2002 and 2003 2001 Millions of yen 2002 Thousands of U.S. dollars 2003 2003 Common Stock: Beginning balance Conversion of...

  • Page 32
    ... of Exchange Rate Changes on Cash and Cash Equivalents Net Increase ( Decrease) in Cash and Cash Equivalents Cash and Cash Equivalents at Beginning of Year Cash and Cash Equivalents at End of Year Supplemental Disclosures of Cash Flow Information: Cash Paid during the Year for- Interest Income taxes...

  • Page 33
    ... Japan. The Company and its consolidated subsidiaries ( "Ricoh" as a consolidated group) is a worldwide supplier of office automation equipment, including copiers, facsimile machines, data processing systems, printers and related supplies. Ricoh is also well known for its state-of-the-art electronic...

  • Page 34
    ... puted based on the average cost of each security held at the tim e of sale. Non-m arketable equity securities owned by Ricoh prim arily relate to less than 20% owned com panies and are stated at cost. ( i) Inventor ies Inventories are m ainly stated at the lower of average cost or net realizable...

  • Page 35
    ... am ortization recognized is the resulting excess divided by the average rem aining service period of active em ployees expected to receive benefits under the plan. The expected long-term rate of return on plan assets used for pension accounting is determ ined based on the historical ( q) Ear nings...

  • Page 36
    ... did not have a m aterial effect on Ricoh's consolidated 134,586 104,623 - - - - 2003 2003 Conversion of convertible bonds Capital lease obligations incurred Assets and liabilities of Lanier Worldwide, Inc., in 2001: Fair value of assets acquired Liabilities assumed Retirement of treasury stock...

  • Page 37
    ... of yen 2002 U.S. dollars 2001 2002 Thousands of U.S. dollars Ricoh Leasing Company, Ltd., has also extended certain other types of loans as part of its business activities, which are primarily residential housing loans to individuals in Japan secured by the underlying real estate properties. Loan...

  • Page 38
    ... balance sheets) Expected credit losses: + 10% + 20% Discount rate: + 10% + 20% 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 m ay not be linear. Also, in the...

  • Page 39
    ... value as of March 31, 2002 and 2003 are as follows: Millions of yen 2002 Gross unrealized holding gains Gross unrealized holding losses 2003 Fair value Gross unrealized holding gains Gross unrealized holding losses Fair value Cost Cost Current: Corporate debt securities Other Noncurrent: Equity...

  • Page 40
    ...WEST JAPAN COMPANY, LIMITED, a 21.1% owned affiliate. The com m on stock of this com pany is publicly traded. The carrying value of the investm ent in this com pany was equal to its underlying book value and am ounted to ¥37,529 m illion ( $318,042 thousand) as of March 31, 2003. The quoted m arket...

  • Page 41
    ... is as follows: Millions of yen 2002 Gross carrying amount Accumulated amortization Net carrying amount Gross carrying amount 2003 Accumulated amortization Net carrying amount Other intangible assets subject to amortization Software Trade name and customer base Other Total Other intangible...

  • Page 42
    ...and 2003 are as follows: Normal tax rate Nondeductible expenses Tax benefits not recognized on operating losses of certain consolidated subsidiaries Utilization of net operating loss carryforward not previously recognized Tax credit for increased research and development expense Effect of change in...

  • Page 43
    .... 9 . SHORT-TERM BORROWINGS AND TRADE NOTES RECEIV ABLE DISCOUNTED WITH BANKS Short-term borrowings as of March 31, 2002 and 2003 consist of the following: Weighted average interest rate 2002 Millions of yen 2002 Thousands of U.S. dollars 2003 2003 2003 Borrowings, principally from banks Com...

  • Page 44
    ...land, buildings and lease receivables with a book value of ¥8,432 m illion ( $71,458 thousand) as of March 31, 2003. All bonds outstanding as of March 31, 2003 are redeem able at the option of Ricoh at 100% of the principal am ounts under certain conditions as provided in the applicable agreem ents...

  • Page 45
    ... 2003 2003 Change in benefit obligation: Benefit obligation at beginning of year Service cost Interest cost Plan participants' contributions Am endm ents Actuarial loss Settlement Benefits paid Foreign exchange impact Benefit obligation at end of year Change in plan assets: Fair value of plan...

  • Page 46
    ... dollars 2003 2003 Service costs Interest costs Expected return on plan assets Net amortization Settlement loss Net periodic benefit cost In accordance with the provisions of SFAS 87, Ricoh recorded an adjustment for minimum pension liability at March 31, 2002 and 2003. This liability represents...

  • Page 47
    ... books and amounted to ¥268,687 million ( $2,277,008 thousand) as of March 31, 2003. The Japanese Commercial Code allows the Company to purchase treasury stock for any reason at any time by the resolution of the Board of Directors up to the limi- tation approved by the shareholders. On June 27...

  • Page 48
    Thousands of U.S. dollars Before-tax amount Tax expense Net-of-tax amount 2003: Foreign currency translation adjustments Unrealized gains ( losses) on securities: Unrealized holding gains ( losses) arising during the year Less- Reclassification adjustment for ( gains) losses realized in net income ...

  • Page 49
    ... for the years ended March 31, 2002 and 2003 as the critical term s of the interest rate swap m atch the term s of the hedged debt obligations. For eign Exchange Risk Management Ricoh conducts business on a global basis and holds assets and liabilities denom inated in foreign currencies...

  • Page 50
    ... loss as of March 31, 2003. Undesignated Der ivative Instr uments Derivative instrum ents not designated as hedging instrum ents are held to reduce the risk relating to the variability in exchange rates on assets and liabilities denom inated in foreign currencies. Changes in the fair value of these...

  • Page 51
    ... com prised of office equipm ent, including copiers and related supplies, com m unications and inform ation system s, and others, including optical equipm ent and electronic devices. The following tables present certain inform ation regarding Ricoh's operating segm ents and operations by geographic...

  • Page 52
    ...based on location of custom ers and long-lived assets for the years ended March 31, 2001, 2002 and 2003 are as follows: Thousands of Millions of yen 2001 2002 U.S. dollars 2003 2003 Sales- Japan The Americas Europe Other Consolidated Long-lived assets- Japan The Americas Europe Other Consolidated...

  • Page 53
    ... Related Inform ation," Ricoh discloses this Thousands of Millions of yen 2001 2002 U.S. dollars inform ation as supplem ental inform ation in light of the disclosure requirem ents of the Japanese Securities and Exchange Law, which a Japanese public com pany is subject to. 2003 2003 Sales- Japan...

  • Page 54
    ...share of the Com pany's com m on stock was granted in exchange for each share of Tohoku Ricoh's com m on stock. The Com pany com pleted the share exchange on April 1, 2003, using 2,239,533 shares of treasury stock it held as of March 31, 2003, with a cost value of ¥4,264 m illion ( $36,136 thousand...

  • Page 55
    ... To the Shareholders and the Board of Directors of Ricoh Com pany, Ltd.: We have audited the accom panying consolidated balance sheets of Ricoh Com pany, Ltd. ( a Japanese corporation) and subsidiaries as of March 31, 2002 and 2003, and the related consolidated statem ents of incom e, shareholders...

  • Page 56
    ... Leasing Company, Ltd. Ricoh Logistics System Co., Ltd. Mexico Ricoh Mexicana, S.A. de C.V . German y Ricoh Deutschland GmbH NRG Deutschland GmbH Lanier Deutschland GmbH & Co. KG Asia and Oceania Production Pan ama Lanier de Panama, S.A. Pu erto Rico NRG Distribution Corporation Lanier Puerto...

  • Page 57
    ...Deput y President Board of Directors Chairman Hiroshi Hamada Corporate Auditors Hisaaki Koga Hideyuki Takamatsu Kenji Matsuishi Group Executive Officers ...Itoh ( Chairman of Nippon Life Insurance Company) Nobuo Mii ( Managing Partner of IGNITE Group) Kohji Sawa * Concurrently serving as Executive...

  • Page 58
    ...Transfer Agent for Common Stock The Chuo Mitsui Trust and Banking Co., Ltd. 33-1, Shiba 3-chome, Minato-ku, Tokyo 105-8574, Japan For further information and additional copies of our annual report and other publications, please write to the Public Relations Department at our corporate headquarters...

  • Page 59
    ...://www.ricoh.com .cn/ RICOH COMPANY, LTD. 15-5, Minam i-Aoyam a 1-chom e, Minato-ku, Tokyo 107-8544, Japan Tel: ( 81) 3-3479-3111 Fax: ( 81) 3-3403-1578 Website: http://www.ricoh.com / The covers and pages 1 to 16 and 53 to 56 of this publication were printed on 100%-recycled paper; the paper on...