Toshiba 2012 Annual Report Download - page 128

58 TOSHIBA Annual Report 2012
Toshiba Corporation and Subsidiaries
March 31, 2012
Notes to Consolidated Financial Statements
23. COMMITMENTS AND CONTINGENT LIABILITIES
Commitments for the purchase of property, plant and equipment, and unconditional purchase obligation for license fees
outstanding at March 31, 2012 totaled approximately ¥31,151 million ($379,890 thousand).
As of March 31, 2012, contingent liabilities, other than guarantees disclosed in Note 24, approximated ¥434 million
($5,293 thousand) mainly for recourse obligations related to notes receivable transferred.
24. GUARANTEES
GUARANTEES OF UNCONSOLIDATED AFFILIATES AND THIRD PARTY DEBT
The Group guarantees debt as well as certain financial obligations of unconsolidated affiliates and third parties to support
the sale of the Group's products and services. Expiration dates vary from 2012 to 2020 as of March 31, 2012 or terminate
on payment and/or cancellation of the obligation. A payment by the Group 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 ¥308,445 million ($3,761,524 thousand) as of March 31, 2012.
GUARANTEES OF EMPLOYEES' HOUSING LOANS
The Group guarantees housing loans of its employees. Expiration dates vary from 2012 to 2032. 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 ¥6,059 million ($73,890 thousand) as of March 31, 2012. However, the Group
expects that the majority of such payments would be reimbursed through the Group's insurance policy.
RESIDUAL VALUE GUARANTEES UNDER SALE AND LEASEBACK TRANSACTIONS
The Group has entered into several sale and leaseback transactions in which certain manufacturing equipment was sold
and leased back. The Group 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 2016. The maximum potential payments by
the Group for such residual value guarantees were ¥22,837 million ($278,500 thousand) as of March 31, 2012.
GUARANTEES OF DEFAULTED NOTES AND ACCOUNTS RECEIVABLE
The Group has transferred trade notes and accounts receivable under several securitization programs. Upon certain sales
of trade notes and accounts receivable, the Group holds a repurchase obligation, which the Group 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 ¥7,862 million ($95,878 thousand)
as of March 31, 2012.
The carrying amounts of the liabilities for the Group's obligations under the guarantees described above as of March 31,
2012 were not significant.
WARRANTY
Estimated warranty costs are accrued for at the time a product is sold to a customer. Estimates for warranty costs are
made based primarily on historical warranty claim experience.
The following is a reconciliation table of the product warranty accrual for the years ended March 31, 2012 and 2011:
Millions of yen
Thousands of
U.S. dollars
Year ended March 31 2012 2011 2012
Balance at beginning of year ¥ 36,961 ¥ 44,181 $ 450,744
Warranties issued 45,605 29,969 556,159
Settlements made (48,070) (34,875) (586,219)
Foreign currency translation adjustments (428) (2,314) (5,220)
Other 4,813 − 58,695
Balance at end of year ¥ 38,881 ¥ 36,961 $ 474,159
Other includes the warranties assumed in the acquisition of Landis+Gyr AG (“L+G”).