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59
TOSHIBA Annual Report 2014
23. 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 2014 to 2023 as of March 31, 2014 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 ¥65,317 million ($634,146 thousand) as of March 31, 2014.
GUARANTEES OF EMPLOYEES' HOUSING LOANS
The Group guarantees housing loans of its employees. Expiration dates vary from 2014 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 ¥3,891 million ($37,777 thousand) as of March 31, 2014. 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 September 2017. The maximum potential
payments by the Group for such residual value guarantees were ¥7,114 million ($69,068 thousand) as of March 31, 2014.
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 ¥7,737 million ($75,117 thousand)
as of March 31, 2014.
The carrying amounts of the liabilities for the Group's obligations under the guarantees described above as of March 31,
2014 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, 2014 and 2013:
Millions of yen
Thousands of
U.S. dollars
Year ended March 31 2014 2013 2014
Balance at beginning of year ¥ 36,081 ¥ 40,902 $ 350,301
Warranties฀issued 44,088 45,483 428,039
Settlements made (49,484) (53,174) (480,427)
Foreign฀currency฀translation฀adjustments 2,589 2,870 25,136
Balance at end of year ¥ 33,274 ¥ 36,081 $ 323,049