Ricoh 2004 Annual Report Download - page 38

Proceeds from the sales of available-for-sale securities were ¥24,568
million, ¥24,513 million and ¥45,464 million ($437,154 thousand) for the
years ended March 31, 2002, 2003 and 2004, respectively.
There were no significant realized gains or losses of available-for-sale
securities for the three years ended March 31, 2004 except for the following
contributed marketable equity securities to the Company’s employee benefit
trust. The loss on securities of ¥2,260 million for the year ended March 31,
2003 was charged to other expense for declines in market value of available-
for-sale securities where the decline was determined to be other than
temporary.
In March 2000, the Company contributed certain marketable equity
securities, not including those of its subsidiaries and affiliated companies, to
its employee retirement benefit trust (the “Trust”) fully administered and
controlled by an independent bank trustee, with no cash proceeds thereon
(the “2000 Transfer”). The 2000 Transfer of the available-for-sale securities
was accounted for as a sale in accordance with SFAS No.125, “Accounting
for Transfer and Servicing of Financial Assets and Extinguishments of
Liabilities” and accordingly the recorded pension liability was reduced by
the fair market value amount of the transferred securities. The fair value of
these securities at the time of transfer was ¥20,760 million. The net
unrealized gains on these available-for-sale securities amounting to ¥13,095
million were initially included in “Accumulated other comprehensive
income (loss)” on the consolidated balance sheets with the expectation of
being reflected in realized gains in the statements of income upon the future
sale of the transferred securities by the trustee.
In March 2004, the Company contributed certain additional
marketable equity securities, not including those of its subsidiaries and
affiliated companies to the Trust, with no cash proceeds thereon (the “2004
Transfer”). The fair value and net unrealized gains on these available-for-
sale securities at the time of transfer was ¥3,648 million ($35,077 thousand)
and ¥2,658 million ($25,558 thousand), respectively.
In connection with the 2004 Transfer, Ricoh has changed its
accounting policy with respect to the recognition of unrealized gains and
losses as realized in the statements of income on transfers of such
marketable equity securities. Ricoh has concluded that it is preferable to
recognize in the statements of income unrealized gains or losses associated
with marketable equity securities transferred to the Trust when Ricoh has
effectively given up the economic rewards of ownership, that is, when the
assets are no longer considered corporate assets and when the Trust has the
irrevocable and unrestricted right to realize those benefits as and when it
chooses. This generally occurs at the time the assets are transferred to the
Trust and not upon future sale of the assets by the trustee.
Accordingly, Ricoh has recognized realized gains in the consolidated
statement of income on the transfer of marketable equity securities to the
Trust for fiscal 2004 of ¥2,658 million ($25,558 thousand). In addition,
Ricoh has recognized in its fiscal 2004 consolidated statement of income a
cumulative effect of accounting change, net of tax, of ¥7,373 million
($70,894 thousand) associated with the 2000 Transfer.
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6. INVESTMENTS IN AND ADVANCES TO AFFILIATES
The investments in and advances to affiliates primarily relate to 20% to 50%
owned companies. Included in these companies is COCA-COLA WEST
JAPAN COMPANY, LIMITED, a 21.8% owned affiliate. The common stock of
this company is publicly traded. The carrying value of the investment in
this company was equal to its underlying book value and amounted to
¥36,728 million ($353,154 thousand) as of March 31, 2004. The quoted
market value of Ricoh’s investment in this company was ¥45,900 million
($441,346 thousand) as of March 31, 2004.
Ricoh’s equity in the underlying net book values of the other 20% to
50% owned companies is approximately equal to their individual carrying
values.
Summarized financial information for all affiliates as of March 31,
2003 and 2004 and for the years ended March 31, 2002, 2003 and 2004 is as
follows:
Financial Position
Operations
$ 364,942
117,019
2,018,010
$2,499,971
¥ 37,954
12,170
209,873
¥259,997
¥ 40,954
13,176
209,383
¥263,513
Liabilities and shareholders’
investment—
Current liabilities
Other liabilities
Shareholders’ investment
Assets—
Current assets
Other assets
Thousands of
U.S. dollars
2004
Millions of yen
2004
$1,008,808
1,491,163
$2,499,971
¥104,916
155,081
¥259,997
¥124,156
139,357
¥263,513
2003
Sales
Costs and
expenses
Net income
Thousands of
U.S. dollars
2004
Millions of yen
2004
2003
$3,053,000
2,958,317
$ 94,683
¥317,512
307,665
¥ 9,847
¥338,035
327,139
¥ 10,896
2002
¥288,992
277,950
¥ 11,042