Ricoh 2003 Annual Report Download - page 37

In January 2001, Ricoh completed a take-over bid for Lanier Worldwide, Inc.
( “Lanier”) , for cash of ¥29,963 m illion. As a result of this acquisition, Lanier
became a wholly owned subsidiary that distributes Lanier brand nam e office
equipment products in the global m arketplace. The acquisition was accounted for
using the purchase m ethod of accounting. The cash purchase price has been
allocated on Ricoh’s balance sheets to the tangible and intangible net assets and
resulted in goodwill of ¥25,496 million. The results of operations for Lanier for
the post-acquisition period for the two m onths ended March 31, 2001, and years
thereafter are included in the accom panying consolidated statem ents of incom e.
The following unaudited pro form a inform ation presents the consolidated results
of operations for the year ended March 31, 2001, as if the acquisition had
occurred as of the beginning of that year:
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3 . ACQUISITION
The pro forma results of operations are not necessarily indicative of the actual
results of operations that would have occurred had the acquisition been made at
the beginning of the year or the results that m ay occur in the future.
In December 2002, Ricoh acquired the rem aining outstanding shares of
Shanghai Ricoh Facsimile Co., Ltd. ( “Shanghai Ricoh”) for ¥1,745 m illion
( $14,788 thousand) . The acquisition of the remaining 45% interest in Shanghai
Ricoh was accounted for using the purchase m ethod of accounting and resulted
in goodwill of ¥778 m illion ( $6,593 thousand) .
Net incom e per share of common stock—
Basic
Diluted
2001
¥71.43
66.03
Yen
Net sales
Net incom e
2001
¥1,624,036
49,474
Millions of yen
Finance receivables as of March 31, 2002 and 2003 are com prised prim arily of
lease receivables and installment loans.
Ricoh’s products are leased to dom estic custom ers primarily through Ricoh
Leasing Com pany, Ltd., a m ajority-owned domestic subsidiary and to overseas
customers primarily through certain overseas subsidiaries. These leases qualify
and are accounted for as sales-type leases in conform ity with SFAS No. 13. Sales
revenue from sales-type leases is recognized at the inception of the leases.
Information pertaining to Ricoh’s lease receivables as of March 31, 2002 and
2003 is as follows:
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 indi-
viduals in Japan secured by the underlying real estate properties. Loan term s range
from 15 years to 30 years with monthly repayments. The total balances of these
loans, net of allowance for doubtful receivables, as of March 31, 2002 and 2003
were ¥48,975 m illion and ¥50,531 m illion ( $428,229 thousand) , respectively. Loan
activities for the years ended March 31, 2001, 2002 and 2003 were as follows:
4 . FINANCE RECEIVABLES
Minim um lease
payments receivable
Estim ated non-guaranteed
residual value
Unearned incom e
Allowance for doubtful
receivables
Net lease receivables
Thousands of
U.S. dollars
2 0 0 3
$4,120,042
1 8 ,7 2 0
(415,584)
(115,025)
$3,608,153
Millions of yen
2003
2002
¥460,380
1,976
( 50,576)
( 12,926)
¥398,854
¥486,165
2,209
(49,039)
(13,573)
¥425,762
As of March 31, 2003, the minim um lease paym ents receivable due in each of
the next five years and thereafter are as follows:
Ricoh sold finance lease receivables with pretax gains of ¥175 m illion and ¥225
million for the years ended March 31, 2001 and 2002, respectively, through
securitization transactions. Servicing assets or liabilities related to securitization
transactions initiated were not recorded because the servicing fees adequately
com pensated Ricoh. Ricoh’s retained interests are subordinate to investors’
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 Ricoh’s
other assets for failure of debtors to pay.
Key econom ic assum ptions used in m easuring the fair value of retained
interests related to securitization transactions com pleted during the years ended
March 31, 2002 and 2003 were as follows:
Thousands of
U.S. dollars
2004
2005
2006
2007
2008
2009 and thereafter
Total
$1,336,203
1,123,644
834,381
549,551
228,026
48,237
$4,120,042
Millions of yen
¥157,672
132,590
98,457
64,847
26,907
5,692
¥486,165
Years ending March 31
Millions of yen
Extension of new loans
Repayment of outstanding loans
Thousands of
U.S. dollars
2 0 0 3
$ 9 7 ,9 5 8
8 4 ,6 8 6
2 0 0 3
¥ 1 1 ,5 5 9
9 ,9 9 3
¥8,638
7,554
¥10,916
6,393
20022001
Expected credit losses
Discount rate
2 0 0 3
0 .7 5 %– 1 .3 5 %
0 .8 9 %– 3 .0 0 %
2002
0.75%– 1.35%
0.89%– 3.00%