Toshiba 2005 Annual Report Download - page 79

Download and view the complete annual report

Please find page 79 of the 2005 Toshiba annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 82

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82

130th Anniversary Toshiba Corporation 37
> LESSOR The Company is also a lessor to office buildings and other assets under operating leases. Future minimum
lease payments to be received under the Company’s non-cancelable operating leases as of March 31, 2005 are as follows:
Thousands of
Year ending March 31 Millions of yen U.S. dollars
2006 ¥ 1,006 $ 9,402
2007 1,006 9,402
2008 1,000 9,346
2009 877 8,196
2010 839 7,841
Thereafter 7,856 73,420
¥12,584 $117,607
22. CONSOLIDATION OF VIEs
The Company leases certain manufacturing equipment from a VIE. The Company consolidates the VIE in accordance
with FIN 46R. As a result, at March 31, 2005, the Company recorded machinery and equipment of ¥27,288 million
($255,028 thousand), and other liabilities of ¥29,021 million ($271,224 thousand). At March 31, 2004, the Company
recorded machinery and equipment, and other liabilities of ¥37,988 million, respectively. The creditors of the VIE do
not have recourse to the general credit of the Company.
23. COMMITMENTS AND CONTINGENT LIABILITIES
Commitments outstanding at March 31, 2005 for the purchase of property, plant and equipment approximated
¥37,044 million ($346,206 thousand).
At March 31, 2005, contingent liabilities, other than guarantees disclosed in Note 24, approximated ¥9,011 million
($84,215 thousand) principally for recourse obligations related to notes receivable transferred.
24. GUARANTEES
> GUARANTEES OF UNCONSOLIDATED AFFILIATES AND THIRD PARTY DEBT The Company guarantees debt as
well as certain financial obligations of unconsolidated affiliates and third parties to support the sale of the Company’s
products and services. Expiration dates vary from 2005 to 2017 or terminate on payment and/or cancellation of the
obligation. A payment by the Company would be triggered by the failure of the guaranteed party to fulfill its obligation
under the guarantee. The maximum potential payments under these guarantees were ¥81,710 million ($763,645
thousand) as of March 31, 2005.
> GUARANTEES OF EMPLOYEES’ HOUSING LOANS The Company guarantees housing loans of its employees. The
term of the guarantees is equal to the term of the related loans which range from 5 to 30 years. A payment would be
triggered by failure of the guaranteed party to fulfill its obligation covered by the guarantee. The maximum potential
payments under these guarantees were ¥25,350 million ($236,916 thousand) as of March 31, 2005. However, the
Company expects that the majority of such payments would be reimbursed through the Company’s insurance policy.
> GUARANTEES OF TRANSFERRED CORPORATE BONDS The Company entered into a sale and assumption agreement
with an SPE during 2001. As a result, the Company was released from being a primary obligor for ¥20,178 million of
the Company’s corporate bonds, which mature on various dates through 2008, and became secondarily liable for these
obligations. The maximum potential payment by the Company as a secondary obligor was ¥9,170 million ($85,701
thousand) at March 31, 2005.
> RESIDUAL VALUE GUARANTEES UNDER SALE AND LEASEBACK TRANSACTIONS The Company entered into
several sale and leaseback transactions in which certain manufacturing equipment was sold and leased back. The
Company may be required to make payments for residual value guarantees in connection with these transactions. The
operating leases will expire on various dates through July 2009. The maximum potential payments by the Company for
such residual value guarantees were ¥17,265 million ($161,355 thousand) at March 31, 2005.
> GUARANTEES OF DEFAULTED NOTES AND ACCOUNTS RECEIVABLE The Company has transferred trade notes
receivable, trade accounts receivable and finance receivables under several securitization programs. Upon certain sales
of trade notes and accounts receivable, the Company holds a repurchase obligation, which the Company is required to
perform upon default of the trade notes and accounts receivable. The trade notes and accounts receivable generally
mature within 3 months. The maximum potential payment for such repurchase obligation was ¥13,243 million
($123,766 thousand) as of March 31, 2005.