FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
REPORT OF FOREIGN PRIVATE ISSUER
Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934
For the month of December 2007
Commission File Number 2 - 68279
RICOH COMPANY, LTD.
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(Translation of Registrant's name into English)
13-1, Ginza 8-Chome, Chuo-ku, Tokyo 104-8222, Japan
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(Address of Principal Executive Offices)
(Indicate by check mark whether the registrant files or will file annual reports
under cover Form 20-F or Form 40-F.)
Form 20-F X Form 40-F __
(Indicate by check mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(1): __ )
(Indicate by check mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(7): __ )
(Indicate by check mark whether by furnishing the information contained in this
Form, the registrant is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act
of 1934.)
Yes __ No X
(If "Yes" is marked, indicate below the file number assigned to the registrant
in connection with Rule 12g3-2(b): 82-__ )
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Ricoh Company, Ltd.
------------------------------
(Registrant)
By: /S/ Zenji Miura
------------------------------
Zenji Miura
Director, Chief Financial Officer
Corporate Executive Vice President
Dedember 7, 2007
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RICOH COMPANY, LTD.
Interim Consolidated Financial Statements
For the six months ended September 30, 2007
This is an English translation of the Interim Securities Report (Hanki
Hokokusho) for the six months ended September 30, 2007 pursuant to the
Securities and Exchange Law of Japan.
Ricoh Company, Ltd. and Consolidated Subsidiaries
CONSOLIDATED BALANCE SHEETS
September 30, 2006, 2007 and March 31, 2007
ASSETS Millions of Yen
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September 30, 2006 September 30, 2007 March 31, 2007
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Current Assets:
Cash and cash equivalents 203,876 190,136 255,737
Time deposits 1,512 1,195 1,417
Marketable securities 171 228 177
Trade receivables-
Notes 76,029 60,828 66,474
Accounts 390,985 462,849 450,231
Less- Allowance for doubtful
receivables (17,036) (16,943) (16,555)
Current maturities of long-term
finance receivables, net 192,741 197,286 193,087
Inventories-
Finished goods 112,440 125,015 113,379
Work in process and raw
materials 72,301 78,288 70,975
Deferred income taxes and other 59,706 65,582 65,170
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Total current assets 1,092,725 1,164,464 1,200,092
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Property, Plant and Equipment, at
cost:
Land 46,744 46,924 47,007
Buildings 221,988 232,662 227,900
Machinery and equipment 612,801 614,086 636,577
Construction in progress 10,889 9,972 12,512
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Total 892,422 903,644 923,996
Less- Accumulated depreciation (633,631) (641,941) (659,328)
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Net property, plant and
equipment 258,791 261,703 264,668
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Investments and Other Assets:
Long-term finance receivables,
net 424,184 442,128 435,874
Investment securities 32,107 74,169 74,836
Investments in and advances to
affiliates 54,623 15,999 15,608
Goodwill 51,888 108,818 72,048
Other intangible assets 75,536 132,505 81,925
Lease deposits and other 101,120 100,059 98,355
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Total investments and other
assets 739,458 873,678 778,646
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Total 2,090,974 2,299,845 2,243,406
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1
LIABILITIES AND SHAREHOLDERS' INVESTMENT Millions of Yen
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September 30, 2006 September 30, 2007 March 31, 2007
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Current Liabilities:
Short-term borrowings 89,404 107,678 91,673
Current maturities of long-term
indebtedness 121,607 67,438 87,174
Trade payables-
Notes 25,311 25,026 25,000
Accounts 294,705 352,028 342,211
Accrued income taxes 36,692 31,044 46,194
Accrued expenses and other 134,111 149,916 143,360
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Total current liabilities 701,830 733,130 735,612
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Long-term Liabilities:
Long-term indebtedness 182,713 245,379 236,801
Accrued pension and severance costs 96,637 99,221 99,028
Deferred income taxes 52,890 48,398 44,183
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Total long-term liabilities 332,240 392,998 380,012
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Minority Interests 54,956 59,146 56,869
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Commitments and Contingent Liabilities
(Note 6)
Shareholders' Investment:
Common stock;
Authorized - 1,500,000,000 shares
as of September 30, 2006,
September 30, 2007 and
March 31, 2007
Issued - 744,912,078 shares as of
September 30, 2006,
September 30, 2007 and
March 31, 2007 135,364 135,364 135,364
Additional paid-in capital 186,451 186,457 186,454
Retained earnings 702,211 793,613 752,398
Accumulated other comprehensive
income (loss) 9,331 29,895 26,998
Treasury stock at cost; 15,309,383
shares, 15,091,026 shares and
14,924,405 shares as of
September 30, 2006, September 30,
2007 and March 31, 2007,
respectively (31,409) (30,758) (30,301)
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Total shareholders' investment 1,001,948 1,114,571 1,070,913
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Total 2,090,974 2,299,845 2,243,406
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The accompanying notes to consolidated financial statements are an integral
part of these balance sheets.
2
Ricoh Company, Ltd. and Consolidated Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME
For the Half Years Ended September 30, 2006, 2007 and Year Ended March 31, 2007
Millions of Yen
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Half year ended Half year ended Year ended
September 30, 2006 September 30, 2007 March 31, 2007
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Net Sales:
Products 553,208 632,870 1,189,548
Post sales and rentals 378,629 400,060 768,965
Other revenue 55,085 55,443 110,412
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Total 986,922 1,088,373 2,068,925
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Cost of Sales:
Products 369,122 429,845 783,681
Post sales and rentals 166,355 161,767 335,444
Other revenue 43,529 45,508 87,394
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Total 579,006 637,120 1,206,519
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Gross profit 407,916 451,253 862,406
Selling, General and Administrative
Expenses 334,753 366,685 688,026
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Operating income 73,163 84,568 174,380
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Other (Income) Expenses:
Interest and dividend income 1,981 3,160 5,501
Interest expense (3,238) (2,721) (7,350)
Foreign currency exchange gain
(loss), net (782) (493) (1,199)
Other, net 3,144 528 3,187
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Total 1,105 474 139
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Income from Continuing Operations
before Income Taxes, Minority
Interests and Equity in
Earnings of Affiliates 74,268 85,042 174,519
Provision for Income Taxes:
Current 28,635 27,913 66,523
Deferred (2,755) 1,965 (2,197)
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Total 25,880 29,878 64,326
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Minority Interests 2,881 2,959 5,508
Equity in Earnings of Affiliates 1,038 955 1,539
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Income from continuing operations 46,545 53,160 106,224
Income from discontinued
operations, net of tax 5,500 -- 5,500
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Net Income 52,045 53,160 111,724
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Per Share of Common Stock: Yen
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Basic:
Income from continuing operations 63.81 72.83 145.56
Income from discontinued
operations, net of tax 7.54 -- 7.54
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Net income 71.35 72.83 153.10
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Diluted:
Income from continuing operations 63.81 70.90 144.41
Income from discontinued
operations, net of tax 7.54 -- 7.48
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Net income 71.35 70.90 151.89
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Cash dividends paid per share 12.00 15.00 25.00
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Per American Depositary Share, each representing 5 shares of common
stock:
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Basic:
Income from continuing operations 319.05 364.15 727.80
Income from discontinued
operations, net of tax 37.70 -- 37.70
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Net income 356.75 364.15 765.50
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Diluted:
Income from continuing operations 319.05 354.50 722.05
Income from discontinued
operations, net of tax 37.70 -- 37.40
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Net income 356.75 354.50 759.45
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Cash dividends paid per share 60.00 75.00 125.00
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The accompanying notes to consolidated financial statements are an integral
part of these statements.
3
Ricoh Company, Ltd. and Consolidated Subsidiaries
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' INVESTMENT
For the Half Years Ended September 30, 2006, 2007 and Year Ended March 31, 2007
Millions of Yen
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Accumulated
Additional other Total
Common paid-in Retained comprehensive Treasury shareholders'
stock capital earnings income (loss) stock investment
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Balance at March 31, 2006 135,364 186,450 665,394 4,099 (31,062) 960,245
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Cumulative effect of adjustment from applying SAB 108 (6,464) (6,464)
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Balance at April 1, 2006, as adjusted 135,364 186,450 658,930 4,099 (31,062) 953,781
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Gain (loss) on disposal of treasury stock 1 1
Dividends declared and approved (8,764) (8,764)
Comprehensive income (loss)
Net income 52,045 52,045
Net unrealized holding gains (losses) on
available-for-sale securities (2,485) (2,485)
Minimum pension liability adjustments 830 830
Net unrealized gains (losses) on derivative instruments (123) (123)
Cumulative translation adjustments 7,010 7,010
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Total comprehensive income (loss) 57,277
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Net changes in treasury stock (347) (347)
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Balance at September 30, 2006 135,364 186,451 702,211 9,331 (31,409) 1,001,948
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Balance at March 31, 2007 135,364 186,454 752,398 26,998 (30,301) 1,070,913
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Cumulative effect of adjustment from applying EITF 06-2 (995) (995)
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Balance at April 1, 2007, as adjusted 135,364 186,454 751,403 26,998 (30,301) 1,069,918
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Gain (loss) on disposal of treasury stock 3 3
Dividends declared and approved (10,950) (10,950)
Comprehensive income (loss)
Net income 53,160 53,160
Net unrealized holding gains (losses) on
available-for-sale securities 58 58
Pension liability adjustments (3,511) (3,511)
Net unrealized gains (losses) on derivative instruments 17 17
Cumulative translation adjustments 6,333 6,333
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Total comprehensive income (loss) 56,057
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Net changes in treasury stock (457) (457)
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Balance at September 30, 2007 135,364 186,457 793,613 29,895 (30,758) 1,114,571
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4
Millions of Yen
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Accumulated
Additional other Total
Common paid-in Retained comprehensive Treasury shareholders'
stock capital earnings income (loss) stock investment
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Balance at March 31, 2006 135,364 186,450 665,394 4,099 (31,062) 960,245
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Cumulative effect of adjustment from applying SAB 108 (6,464) (6,464)
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Balance at April 1, 2006, as adjusted 135,364 186,450 658,930 4,099 (31,062) 953,781
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Gain (loss) on disposal of treasury stock 4 4
Dividends declared and approved (18,256) (18,256)
Comprehensive income (loss)
Net income 111,724 111,724
Net unrealized holding gains (losses) on available-for-sale
securities 73 73
Minimum pension liability adjustments 970 970
Net unrealized gains (losses) on derivative instruments (185) (185)
Cumulative translation adjustments 24,774 24,774
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Total comprehensive income (loss) 137,356
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Adjustment to initially apply SFAS 158 (2,733) (2,733)
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Net changes in treasury stock 761 761
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Balance at March 31, 2007 135,364 186,454 752,398 26,998 (30,301) 1,070,913
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The accompanying notes to consolidated financial statements are an integral
part of these statements.
5
Ricoh Company, Ltd. and Consolidated Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Half Years Ended September 30, 2006, 2007 and Year Ended March 31, 2007
Millions of Yen
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Half year ended Half year ended Year ended
September 30, 2006 September 30, 2007 March 31, 2007
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net income 52,045 53,160 111,724
Income from discontinued operations, net of tax (5,500) -- (5,500)
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Income from continuing operations 46,545 53,160 106,224
Adjustments to reconcile net income to net cash provided
by operating activities--
Depreciation and amortization 42,851 46,662 89,632
Equity in earnings of affiliates, net of dividends
received (209) (380) (711)
Deferred income taxes (2,755) 1,965 (2,197)
Losses on disposals and sales of property, plant and
equipment 988 936 3,722
Pension and severance costs, less payment (701) (3,352) (773)
Changes in assets and liabilities, net of effects
from acquisition--
(Increase) decrease in trade receivables 7,057 (2,705) (15,919)
Increase in inventories (12,693) (1,895) (1,494)
Increase in finance receivables (14,045) (7,357) (28,047)
(Decrease) increase in trade payables (20,354) (2,363) 2,199
(Decrease) increase in accrued income taxes and
accrued expenses and other 4,608 (11,396) 11,175
Other, net 332 5,561 3,486
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Net cash provided by operating activities 51,624 78,836 167,297
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CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sales of property, plant and equipment 265 36 463
Expenditures for property, plant and equipment (39,089) (39,677) (85,747)
Payments for purchases of available-for-sale securities (49,036) (48,486) (97,158)
Proceeds from sales of available-for-sale securities 48,006 49,930 96,087
(Increase) decrease in time deposits, net (43) 242 64
Proceeds from sales of discontinued operations 12,000 -- 12,000
Purchase of business, net of cash acquired -- (89,863) (23,200)
Other, net (11,362) (9,306) (17,941)
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Net cash used in investing activities (39,259) (137,124) (115,432)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long-term indebtedness 42,885 44,521 60,157
Repayment of long-term indebtedness (20,861) (46,972) (49,115)
Increase in short-term borrowings, net 6,633 17,194 8,362
Proceeds from issuance of long-term debt securities -- -- 65,274
Repayment of long-term debt securities (18,000) (10,000) (55,000)
Dividends paid (8,764) (10,950) (18,240)
Payment for purchase of treasury stock (355) (469) (799)
Other, net (437) (580) (1,357)
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Net cash provided by (used in) financing
activities 1,101 (7,256) 9,282
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CASH FLOWS OF DISCONTINUED OPERATIONS (Revised - Note 1 (t))
Net, operating cash flows: 838 -- 838
Net, investing cash flows: (13) -- (13)
Net, financing cash flows: -- -- --
Effect of exchange rate on cash and cash equivalents
from discontinued operations -- -- --
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Net increase in cash and cash equivalents
from discontinued operations 825 -- 825
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EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS 2,530 (57) 6,710
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NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 16,821 (65,601) 68,682
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 187,055 255,737 187,055
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CASH AND CASH EQUIVALENTS AT END OF PERIOD 203,876 190,136 255,737
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6
Millions of Yen
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Half year ended Half year ended Year ended
September 30, 2006 September 30, 2007 March 31, 2007
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SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
CASH PAID DURING THE YEAR FOR-
Interest 3,620 4,113 8,222
Income taxes 38,105 46,178 66,603
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The accompanying notes to consolidated financial statements are an integral
part of these statements.
7
Ricoh Company, Ltd. and Consolidated Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING AND REPORTING POLICIES
According to the article 87 of the "Regulations Regarding Terms, Forms and
Preparation of Interim Consolidated Financial Statements"(Ministry of Finance
Ordinance No.24, 1999), the accompanying consolidated financial statements of
Ricoh (Ricoh Company, Ltd. and its consolidated subsidiaries) have been
prepared in conformity with U.S. generally accepted accounting principles.
Significant accounting and reporting policies are summarized below:
The accompanying consolidated financial statements for the half years ended
September 30, 2006, 2007 and for the year ended March 31, 2007 are presented in
Japanese yen, the functional currency of the Company and its domestic
subsidiaries.
The books of the Company and its domestic subsidiaries are maintained in
conformity with Japanese accounting principles and practices, while foreign
subsidiaries maintain their books in conformity with the standards of their
country of domicile.
The accompanying consolidated financial statements reflect necessary
adjustments, not recorded in the books, to present them in conformity with U.S.
generally accepted accounting principles.
(A) PRINCIPLES OF CONSOLIDATION
The accompanying consolidated financial statements include the accounts of
Ricoh. Investments in entities in which Ricoh has the ability to exercise
significant influence over the entities' operating and financial policies
(generally 20 to 50 percent ownership) are accounted for on an equity basis.
All significant intercompany balances and transactions have been eliminated in
consolidation.
The accounts of certain consolidated subsidiaries have been included on the
basis of fiscal periods ended within three months prior to September 30.
(B) REVENUE RECOGNITION
Ricoh generates revenue principally through the sale of equipment, supplies and
related services under separate contractual arrangements for each. Ricoh
recognizes revenue when (1) it has a firm contract, (2) the product has been
shipped to and accepted by the customer or the service has been provided,
(3) the sales price is fixed or determinable and (4) amounts are reasonably
assured of collection.
Products sales is recognized at the time of delivery and installation at the
customer location. Equipment revenues are based on established prices by
product type and model and are net of discounts. A sales return is accepted
only when the equipment is defective and does not meet Ricoh's product
performance specifications. Other than installation, there are no customer
acceptance clauses in the sales contract.
Post sales and rentals result primarily from maintenance contracts that are
normally entered into at the time the equipment is sold. Standard service fee
prices are established depending on equipment classification and include a cost
value for the estimated services to be performed based on historical experience
plus a profit margin thereon. As a matter of policy, Ricoh does not discount
such prices. On a monthly basis, maintenance service revenues are earned and
recognized by Ricoh and billed to the customer in accordance with the contract
and include a fixed monthly fee plus a variable amount based on usage. The
length of the
8
contract ranges up to five-years, however, most contracts are cancelable at any
time by the customer upon a short notice period. Leases not qualifying as
sales-type leases or direct financing leases are accounted for as operating
leases and related revenue is recognized over the lease term.
Ricoh enters into arrangements with multiple elements, which may include any
combination of products, equipment, installation and maintenance. Ricoh
allocates revenue to each element based on its relative fair value if such
element meets the criteria for treatment as a separate unit of accounting as
prescribed in the Emerging Issues Task Force Issue No.00-21 ("EITF 00-21"),
"Revenue Arrangements with Multiple Deliverables". Pursuant to EITF 00-21, the
delivered item in a multiple element arrangement should be considered a
separate unit of accounting if all of the following criteria are met: (1) a
delivered item has value to customers on a stand-alone basis, (2) there is
objective and reliable evidence of fair value of an undelivered item, and
(3) the delivery of the undelivered item must be probable and controlled by
Ricoh if the arrangement includes the right of return. The price charged when
the element is sold separately generally determines fair value. Otherwise,
revenue is deferred until the undelivered elements are fulfilled as a single
unit of accounting.
Revenue from the sale of equipment under sales-type leases is recognized as
product sales at the inception of the lease. Other revenue consists primarily
of interest income on sales-type leases and direct-financing leases, which are
recognized as Other revenue over the life of each respective lease using the
interest method.
(C) FOREIGN CURRENCY TRANSLATION
For foreign operations with functional currencies other than the Japanese yen,
assets and liabilities are translated at the exchange rates in effect at each
end of the period, and income and expenses are translated at the average rates
of exchange prevailing during each period. The resulting translation
adjustments are included as a part of accumulated other comprehensive income
(loss) in shareholders' investment.
All foreign currency transaction gains and losses are included in other income
and expense in the period incurred.
(D) CASH AND CASH EQUIVALENTS
Cash and cash equivalents include highly liquid investments with maturities of
three months or less at the date of purchase such as time deposits and
short-term investment securities which are available-for sale at any time,
present insignificant risk of changes in value due to being readily convertible
into cash and have an original maturity of three months or less, such as money
management funds and free financial funds.
(E) DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES
As discussed further in Note 6, Ricoh manages its exposure to certain market
risks, primarily foreign currency and interest rate risks, through the use of
derivative instruments. As a matter of policy, Ricoh does not enter into
derivative contracts for trading or speculative purposes.
In accordance with Statement of Financial Accounting Standards ("SFAS") No.133
"Accounting for Derivative Instruments and Hedging Activities", SFAS No.138
"Accounting for Certain Derivative Instruments and Certain Hedging Activities,
an amendment of FASB Statement No.133" and SFAS No.149 "Amendment of Statement
133 on Derivative Instruments and Hedging Activities", Ricoh recognizes all
derivative instruments as either assets or liabilities in the consolidated
balance sheets and measures those instruments at fair value. When Ricoh enters
into a derivative contract, it makes a determination as to whether or not for
accounting purposes the derivative is part of a hedging relationship.
9
In general, a derivative may be designated as either (1) a hedge of the fair
value of a recognized asset or liability or an unrecognized firm commitment
("fair value hedge"), (2) a hedge of the variability of the expected cash flows
associated with an existing asset or liability or a forecasted transaction
("cash flow hedge"), or (3) a foreign currency fair value or cash flow hedge
("foreign currency hedge"). Ricoh formally documents all relationships between
hedging instruments and hedged items, as well as its risk-management objective
and strategy for undertaking various hedge transactions. This process includes
linking all derivatives that are designated as fair value, cash flow, or
foreign currency hedges to specific assets and liabilities on the consolidated
balance sheets or to specific firm commitments or forecasted transactions.
For derivative contracts that are designated and qualify as fair value hedges
including foreign currency fair value hedges, the derivative instrument is
marked-to-market with gains and losses recognized in current period earnings to
offset the respective losses and gains recognized on the underlying exposure.
For derivative contracts that are designated and qualify as cash flow hedges
including foreign currency cash flow hedges, the effective portion of gains and
losses on these contracts is reported as a component of accumulated other
comprehensive income (loss) and reclassified into earnings in the same period
the hedged item or transaction affects earnings. Any hedge ineffectiveness on
cash flow hedges is immediately recognized in earnings. For all derivative
instruments that are not designated as part of a hedging relationship and for
designated derivative instruments that do not qualify for hedge accounting, the
contracts are recorded at fair value with the gain or loss recognized in
current period earnings.
(F) ALLOWANCE FOR DOUBTFUL TRADE RECEIVABLES AND FINANCE RECEIVABLES
Ricoh records allowances for doubtful receivables that are based upon
historical experience and specific customer collection issues. The estimated
amount of probable credit losses in its existing receivables is determined from
write-off history adjusted to reflect current economic conditions and specific
allowances for receivables including nonperforming leases, impaired loans or
other accounts of which Ricoh has concluded it will be unable to collect all
amounts due according to original terms of the lease or loan agreement. Account
balances net of expected recovery from available collateral are charged-off
against the allowances when collection is considered remote.
(G) SECURITIES
Ricoh conforms with SFAS No.115, "Accounting for Certain Investments in Debt
and Equity Securities" which requires all investments in debt and marketable
equity securities to be classified as either held-to-maturity, trading, or
available-for-sale securities. As of September 30, 2006, 2007 and March 31,
2007, all of Ricoh's investments in debt and marketable equity securities are
classified as available-for-sale securities. Those available-for-sale
securities are reported at fair value with unrealized gains and losses, net of
related taxes, excluded from earnings and reported in accumulated other
comprehensive income (loss). Available-for-sale securities, which mature or are
expected to be sold in one year, are classified as current assets.
Individual securities classified as available-for-sale securities are reduced
to fair market value by a charge to income for other than temporary declines in
value. Factors considered in assessing whether an indication of other than
temporary impairment exists with respect to available-for-sale securities
include: length of time and extent of decline, financial condition and near
term prospects of issuer and intent and ability of the Company to retain its
investments for a period of time sufficient to allow for any anticipated
recovery in market value.
The cost of the securities sold is computed based on the average cost of each
security held at the time of sale.
10
Non-marketable equity securities owned by Ricoh primarily relate to less than
20% owned companies and are stated at cost.
(H) INVENTORIES
Inventories are mainly stated at the lower of average cost or net realizable
values. Inventory costs include raw materials, labor and manufacturing
overheads.
(I) PROPERTY, PLANT AND EQUIPMENT
For the Company and its domestic subsidiaries, depreciation of property, plant
and equipment is computed principally by using the declining-balance method
over the estimated useful lives. Most of the foreign subsidiaries have adopted
the straight-line method for computing depreciation, which currently accounts
for approximately 33% of the consolidated depreciation expense. The
depreciation period generally ranges from 5 years to 50 years for buildings and
2 years to 12 years for machinery and equipment.
Effective rates of depreciation for the half years ended September 30, 2006,
2007 and for the year ended March 31, 2007 are summarized below:
----------------------------------------------------
Half year ended Half year ended Year ended
September 30, 2006 September 30, 2007 March 31, 2007
- -------------------------------------------------------------------------------
Buildings 4.4% 5.0% 9.8%
Machinery and equipment 20.0 23.1 40.8
- -------------------------------------------------------------------------------
Ordinary maintenance and repairs are charged to expense as incurred. Major
replacements and improvements are capitalized. When properties are retired or
otherwise disposed of, the property and related accumulated depreciation
accounts are relieved of the applicable amounts, and any differences are
included in earnings.
(J) CAPITALIZED SOFTWARE COSTS
In accordance with Statement of Position ("SOP") 98-1, "Accounting for the
Costs of Computer Software Developed or Obtained for Internal Use," Ricoh
capitalizes qualifying cost of computer software. Costs incurred during the
application development stage as well as upgrades and enhancements that results
in additional functionality are capitalized. The capitalized software is
amortized on a straight line basis over their estimated useful lives.
(K) GOODWILL AND OTHER INTANGIBLE ASSETS
SFAS No.141, "Business Combinations" requires the use of only the purchase
method of accounting for business combinations and refines the definition of
intangible assets acquired in a purchase business combination. SFAS No.142,
"Goodwill and Other Intangible Assets" eliminates the amortization of goodwill
and instead requires annual impairment testing thereof. SFAS 142 also requires
acquired intangible assets with a definite useful life to be amortized over
their respective estimated useful lives and reviewed for impairment when an
indication of impairment is identified in accordance with SFAS No.144,
"Accounting for the Impairment or Disposal of Long-Lived Assets." Other
intangible assets with definite useful lives, consisting primarily of software,
patents, customer relationships and tradenames are amortized on a straight line
basis over 1 year to 20 years. Any acquired intangible asset determined to have
11
an indefinite useful life is not amortized, but instead is tested annually for
impairment based on its fair value until its life would be determined to no
longer be indefinite.
(L) PENSION AND RETIREMENT ALLOWANCES PLANS
The measurement of pension costs and liabilities is determined in accordance
with SFAS No.87, "Employers' Accounting for Pensions" and SFAS No.158,
"Employers' Accounting for Defined Benefit Pension and Other Postretirement
Plans." Under SFAS 158, Ricoh recognized the funded status (i.e., the
difference between the fair value of plan assets and the projected benefit
obligations) of its pension fund plans as of the end of fiscal year's
consolidated balance sheets, with a corresponding adjustment in initially
applying SFAS 158 to accumulated other comprehensive income (loss), net of tax.
The expected long-term rate of return on plan assets used for pension
accounting is determined based on the historical long-term rate of return on
plan assets. The discount rate is determined based on the rates of return of
high-quality fixed-income investments currently available and expected to be
available during the period to maturity of the pension benefits.
(M) INCOME TAXES
Income taxes are accounted for under the asset and liability method. Deferred
tax assets and liabilities are recognized for the future tax consequences
attributable to differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax bases and operating
loss and tax credit carryforwards. Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable income in the
years in which those temporary differences and carryforwards are expected to be
realized or settled. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in income in the period that includes the
enactment date.
FASB Interpretation ("FIN") No.48, "Accounting for Uncertainty in Income Taxes,
an interpretation of FASB Statement No.109" clarifies the accounting and
reporting for uncertainties in income tax law. FIN 48 prescribes a
comprehensive model for the financial statement recognition, measurement,
presentation and disclosure of uncertain tax positions taken or expected to be
taken in income tax returns.
(N) RESEARCH AND DEVELOPMENT EXPENSES AND ADVERTISING COSTS
Research and development expenses and advertising costs are expensed as
incurred.
(O) SHIPPING AND HANDLING COSTS
Shipping and handling costs, which mainly include transportation to customers,
are included in selling, general and administrative expenses in the
consolidated statements of income.
(P) IMPAIRMENT OR DISPOSAL OF LONG-LIVED ASSETS
Long-lived assets and acquired intangible assets with a definite life are
reviewed for impairment whenever events or changes in circumstances indicate
that the carrying amount of an asset or group of assets may not be recoverable.
Recoverability of assets to be held and used is assessed by comparing the
carrying amount of an asset or group of assets to the expected future
undiscounted net cash flows of the asset or group of assets. If an asset or
group of assets is considered to be impaired, the impairment charge to be
recognized is measured as the amount by which the carrying amount of the asset
or group of assets exceeds fair value. Long-lived assets meeting the criteria
to be considered as held for sale are reported at the lower of their carrying
amount or fair value less costs to sell.
12
(Q) EARNINGS PER SHARE
Basic net income per common share is calculated by dividing net income by the
weighted-average number of shares outstanding during the period. The
calculation of diluted net income per common share is similar to the
calculation of basic net income per share, except that the weighted-average
number of shares outstanding includes the additional dilution from potential
common stock equivalents such as convertible bonds.
(R) NON-CASH TRANSACTIONS
Non-cash transactions excluded from the consolidated statements of cash flows
were not significant for the half years ended September 30, 2006, 2007 and for
the year ended March 31, 2007.
(S) USE OF ESTIMATES
Management of the Company has made a number of estimates and assumptions that
affect the reported amounts of assets, liabilities, revenues and expenses,
including impairment losses of long-lived assets and the disclosures of fair
value of financial instruments and contingent assets and liabilities, to
prepare these financial statements in conformity with generally accepted
accounting principles. Actual results could differ from those estimates.
The Company has identified four areas where it believes assumptions and
estimates are particularly critical to the consolidated financial statements.
These are determination of the allowance for doubtful receivables, impairment
on long-lived assets and goodwill, realizability of deferred tax assets and
pension accounting.
(T) DISCONTINUED OPERATIONS
As a result of a sale of a business, the operating results and cash flows
classified as discontinued operations were separately reported for all period
presented in accordance with SFAS 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets."
(U) ADOPTION OF SAB 108
The Securities and Exchange Commission of the U.S. issued Staff Accounting
Bulletin ("SAB") No.108, "Considering the Effects of Prior Year Misstatements
when Quantifying Misstatements in Current Year Financial Statements" in
September 2006. SAB 108 requires companies to quantify misstatements using both
the balance sheet approach and the income statement approach ("dual" method),
and to evaluate the importance of misstatements taking into account relevant
quantitative and qualitative factors. Historically, Ricoh used the income
statement ("rollover") approach to quantify misstatements. Upon adoption, SAB
108 permits Ricoh to adjust the cumulative effect of misstatements that were
previously considered immaterial under the rollover method that are now
considered material under the dual method. SAB108 is effective for fiscal years
ending after November 15, 2006. Ricoh adopted SAB108 in the fourth quarter of
fiscal year 2007.
The Company and some of its domestic consolidated subsidiaries previously set
the residual value of tangible fixed assets at 5% of acquisition cost in
principle using the standards provided in the Corporate Tax Law. However, based
on an evaluation of residual values realized from disposition of property,
plant and equipment, Ricoh concluded that the residual value of substantially
all long lived assets is negligible at the end of useful life. This
misstatement was considered immaterial to Ricoh's historical consolidated
financial statements using the income statement approach.
13
Accordingly, Ricoh recorded an increase in the beginning balance of accumulated
depreciation of Yen 11,464 million and an increase in the beginning balance of
deferred tax assets (included in "Lease deposits and other") of Yen
4,675 million as of April 1, 2006 with a decrease in the beginning balance of
retained earnings of Yen 6,464 million. The accompanying consolidated balance
sheet as of September 30, 2006 and consolidated Statements of Shareholders'
Investment for the half year ended September 30, 2006 reflect the adjustments
of increases in the beginning balance of accumulated depreciation and deferred
tax assets and a decrease in the beginning balance of retained earnings to
conform with the presentation used for the year ended March 31, 2007. This
adjustment had no effect on the consolidated statements of income and cash
flows for the half year ended September 30, 2006.
(V) NEW ACCOUNTING STANDARD
In June 2006, the FASB ratified the EITF consensus on EITF Issue No.06-2,
"Accounting for sabbatical Leave and Other Similar Benefits Pursuant to FASB
Statement No.43." Accordingly, Ricoh recorded an increase in the beginning
balance of accrued expenses of Yen 1,680 million and an increase in the
beginning balance of deferred tax assets (included in "Lease deposits and
other") of Yen 672 million as of April 1, 2007, with a decrease in the
beginning balance of retained earnings of Yen 995 million.
2. ACQUISITION
On June 1, 2007, Ricoh and International Business Machines Corporation ("IBM")
completed formation of a joint venture company (now known as INFOPRINT
SOLUTIONS COMPANY) based on IBM's Printing Systems Division to provide output
solutions for production printing area. Initially, Ricoh acquired 51% of the
joint venture. Ricoh will progressively acquire the remaining 49% over the next
three years as the joint venture becomes a fully owned subsidiary. Ricoh used
the purchase method of accounting to account for the acquisition. Ricoh
reflected certain preliminary estimates with respect to the value of the
underlying net assets of INFOPRINT SOLUTIONS COMPANY in determining amounts of
the goodwill. Therefore, the amount of intangible assets and goodwill could
possibly be adjusted upon the completion of the purchase price allocation.
Final consideration for this transaction will be determined at the end of the
three-year period based upon the participation in the profits and losses
recorded by the equity partners. Therefore, the amount of goodwill could
possibly be adjusted at the determination of final consideration. Assets,
liabilities and operations of INFOPRINT SOLUTIONS COMPANY have been included in
the accompanying consolidated financial statements since the acquisition date.
The following table reflects the June 1, 2007 condensed balance sheet of
INFOPRINT SOLUTIONS COMPANY, as adjusted to give effect to the purchase method
accounting adjustments:
Millions of Yen
- ----------------------------------------------
Receivables and other assets 18,360
Property and equipment 2,304
Identifiable intangible assets 50,085
Goodwill 36,293
Liabilities (17,179)
- ----------------------------------------------
89,863
- ----------------------------------------------
Identifiable intangible assets of INFOPRINT SOLUTIONS COMPANY primarily
comprised trademark of Yen 16,852 million, which were estimated to have a
remaining useful life of 5 years to 7 years. Goodwill
14
arising from the acquisition of INFOPRINT SOLUTIONS COMPANY has all been
allocated to the Office Solutions segment.
3. SECURITIES
Marketable securities and investment securities as of September 30, 2006, 2007
and March 31, 2007 consist of the following:
Millions of Yen
- ------------------------------------------------------------------------------------------------------
September 30, 2006 September 30, 2007 March 31, 2007
- ------------------------------------------------------------------------------------------------------
Marketable securities:
Available-for-sale securities 171 228 177
- ------------------------------------------------------------------------------------------------------
Investment securities:
Available-for-sale securities 25,701 71,135 70,362
Non-marketable equity securities 6,406 3,034 4,474
- ------------------------------------------------------------------------------------------------------
32,107 74,169 74,836
- ------------------------------------------------------------------------------------------------------
The current and non-current security types of available-for-sale securities,
and the respective cost, gross unrealized holding gains, gross unrealized
holding losses and fair value as of September 30, 2006, 2007 and March 31, 2007
are as follows:
Millions of Yen
- ----------------------------------------------------------------------------------------------------------------------------
September 30, 2006 September 30, 2007 March 31, 2007
- ----------------------------------------------------------------------------------------------------------------------------
Gross Gross Gross Gross Gross Gross
unrealized unrealized unrealized unrealized unrealized unrealized
holding holding Fair holding holding Fair holding holding Fair
Cost gains losses value Cost gains losses value Cost gains losses value
- ----------------------------------------------------------------------------------------------------------------------------
Current:
Corporate
debt
securities 170 -- -- 170 227 -- -- 227 176 -- -- 176
Other 1 -- -- 1 1 -- -- 1 1 -- -- 1
- ----------------------------------------------------------------------------------------------------------------------------
171 -- -- 171 228 -- -- 228 177 -- -- 177
- ----------------------------------------------------------------------------------------------------------------------------
Non-current:
Equity
securities 8,563 10,891 53 19,401 50,810 14,685 238 65,257 49,261 14,991 142 64,110
Corporate
debt
securities 6,000 1 -- 6,001 6,000 -- 122 5,878 6,000 10 -- 6,010
Other 299 -- -- 299 -- -- -- -- 242 -- -- 242
- ----------------------------------------------------------------------------------------------------------------------------
14,862 10,892 53 25,701 56,810 14,685 360 71,135 55,503 15,001 142 70,362
- ----------------------------------------------------------------------------------------------------------------------------
Other non-current securities mainly include investment trusts consisting of
investment in marketable debt and equity securities.
The contractual maturities of debt securities classified as available-for-sale
as of September 30, 2007, regardless of their balance sheet classification, are
as follows:
Millions of Yen
- ------------------------------------------------------
Cost Fair value
- ------------------------------------------------------
Due after one year through five years 6,000 5,878
Proceeds from the sales of available-for-sale securities were Yen
48,006 million, Yen 49,930 million and Yen 96,087 million for the half years
ended September 30, 2006, 2007 and for the year ended March 31, 2007,
respectively.
15
There were no significant realized gains on sales of available-for-sale
securities for the half years ended September 30, 2006, 2007 and for the year
ended March 31, 2007. There were no significant realized losses on sales of
available-for-sale securities for the half years ended September 30, 2006, 2007
and for the year ended March 31, 2007.
4. PENSION BENEFIT COSTS
The Company and certain of its subsidiaries have various contributory and
noncontributory employees' pension fund plans in trust covering substantially
all of their employees. Under the plans, employees are entitled to lump-sum
payments at the time of termination or retirement, or to pension payments.
Contributions to above pension plans have been made to provide future pension
payments in conformity with an actuarial calculation determined by the current
basic rate of pay.
The net periodic benefit costs of the pension plans for the half years ended
September 30, 2006, 2007 and for the year ended March 31, 2007 consisted of the
following components:
Millions of Yen
- ------------------------------------------------------------------------------------------------------
Half year ended Half year ended Year ended
September 30, 2006 September 30, 2007 March 31, 2007
- ------------------------------------------------------------------------------------------------------
Service cost 7,558 7,558 15,687
Interest cost 5,459 5,846 11,121
Expected return on plan assets (4,321) (4,763) (9,186)
Net amortization (528) (354) (1,420)
Settlement benefit -- -- (18)
- ------------------------------------------------------------------------------------------------------
Total net periodic pension cost 8,168 8,287 16,184
- ------------------------------------------------------------------------------------------------------
5. PER SHARE DATA
Shareholders' equity per share was Yen 1,373.28, Yen 1,527.18 and Yen 1,467.03
as of September 30, 2006, 2007, and March 31, 2007, respectively. Dividends per
share shown in the consolidated statements of income are computed based on
dividends paid for the half years ended September 30, 2006, 2007 and the year
ended March 31, 2007.
A reconciliation of the numerator and the denominators of the basic and diluted
per share computations for income before cumulative effect of accounting
change, cumulative effect of accounting change, net of tax and net income is as
follows:
Thousands of shares
- ---------------------------------------------------------------------------------------------------------------
Half year ended Half year ended Year ended
September 30, 2006 September 30, 2007 March 31, 2007
- ---------------------------------------------------------------------------------------------------------------
Weighted average number of shares of common stock
outstanding 729,483 729,901 729,745
Effect of dilutive securities:
Euro Yen Zero Coupon Convertible Bonds - Due December 2011 -- 19,741 5,758
- ---------------------------------------------------------------------------------------------------------------
Diluted shares of common stock outstanding 729,483 749,642 735,503
- ---------------------------------------------------------------------------------------------------------------
16
Millions of Yen
- ---------------------------------------------------------------------------------------------------------------
Half year ended Half year ended Year ended
September 30, 2006 September 30, 2007 March 31, 2007
- ---------------------------------------------------------------------------------------------------------------
Income from continuing operations 46,545 53,160 106,224
Income from discontinued operations, net of tax 5,500 -- 5,500
- ---------------------------------------------------------------------------------------------------------------
Net income 52,045 53,160 111,724
- ---------------------------------------------------------------------------------------------------------------
Effect of dilutive securities:
Euro Yen Zero Coupon Convertible Bonds - Due December 2011 -- (13) (8)
- ---------------------------------------------------------------------------------------------------------------
Diluted net income 52,045 53,147 111,716
- ---------------------------------------------------------------------------------------------------------------
Yen
- ---------------------------------------------------------------------------------------------------------------
Half year ended Half year ended Year ended
September 30, 2006 September 30, 2007 March 31, 2007
- ---------------------------------------------------------------------------------------------------------------
Earnings per share:
Basic
Income from continuing operations 63.81 72.83 145.56
Income from discontinued operations, net of tax 7.54 -- 7.54
- ---------------------------------------------------------------------------------------------------------------
Net income 71.35 72.83 153.10
- ---------------------------------------------------------------------------------------------------------------
Diluted
Income from continuing operations 63.81 70.90 144.41
Income from discontinued operations, net of tax 7.54 -- 7.48
- ---------------------------------------------------------------------------------------------------------------
Net income 71.35 70.90 151.89
- ---------------------------------------------------------------------------------------------------------------
6. DERIVATIVE FINANCIAL INSTRUMENTS
Risk Management Policy
Ricoh enters into various derivative financial instrument contracts in the
normal course of business in connection with the management of its assets and
liabilities.
Ricoh uses derivative instruments to reduce risk and protect market value of
assets and liabilities in conformity with the Ricoh's policy. Ricoh does not
use derivative financial instruments for trading or speculative purposes, nor
is it a party to leveraged derivatives.
All derivative instruments are exposed to credit risk arising from the
inability of counterparties to meet the terms of the derivative contracts.
However, Ricoh does not expect any counterparties to fail to meet their
obligations because these counterparties are financial institutions with
satisfactory credit ratings. Ricoh utilizes a number of counterparties to
minimize the concentration of credit risk.
Foreign Exchange Risk Management
Ricoh conducts business on a global basis and holds assets and liabilities
denominated in foreign currencies. Ricoh enters into foreign exchange contracts
and foreign currency options to hedge against the potentially adverse impacts
of foreign currency fluctuations on these assets and liabilities denominated in
foreign currencies.
17
Interest Rate Risk Management
Ricoh enters into interest rate swap agreements to hedge against the potential
adverse impacts of changes in fair value or cash flow fluctuations on interest
of its outstanding debt.
Fair Value Hedges
Changes in the fair value of derivative instruments and the related hedged
items designated and qualifying as fair value hedges are included in other
(income) expenses in the consolidated statements of income. There is no hedging
ineffectiveness nor are net gains or losses excluded from the assessment of
hedge effectiveness for the half years ended September 30, 2006, 2007 and for
the year ended March 31, 2007 as the critical terms of the interest rate swap
match the terms of the hedged debt obligations.
Cash Flow Hedges
Changes in the fair value of derivative instruments designated and qualifying
as cash flow hedges are included in accumulated other comprehensive income
(loss) on the consolidated balance sheets. These amounts are reclassified into
earnings as interest on the hedged loans is paid. There is no hedging
ineffectiveness nor are net gains or losses excluded from the assessment of
hedge effectiveness for the half years ended September 30, 2006, 2007 and for
the year ended March 31, 2007 as the critical terms of the interest rate swap
match the terms of the hedged debt obligations. Ricoh expects that it will
reclassify into earnings through other (income) expenses during the next 12
months approximately Yen 26 million of the balance of accumulated other
comprehensive income as of September 30, 2007.
Undesignated Derivative Instruments
Derivative instruments not designated as hedging instruments are held to reduce
the risk relating to the variability in exchange rates on assets and
liabilities denominated in foreign currencies. Changes in the fair value of
these instruments are included in other (income) expenses in the consolidated
statement of income.
7. CREDIT LINES
The Company and certain of its subsidiaries enter into the contracts with
financial institutions regarding lines of credit and overdrawing, and hold the
issuing programs of commercial paper and medium-term notes. The unused lines of
credit amounted to Yen 732,443 million, Yen 693,791 million and Yen
676,047 million as of September 30, 2006, March 31, 2007 and September 30,
2007, respectively, of which Yen 408,461 million, Yen 367,709 million and Yen
326,893 million related to commercial paper and medium-term notes programs at
prevailing interest rates.
8. COMMITMENTS AND CONTINGENT LIABILITIES
Ricoh was contingently liable for certain guarantees including employees
housing loans of Yen 1,058 million as of September 30, 2007.
As of September 30, 2007 the Company and certain of its subsidiaries were
parties to litigation involving routine matters, such as patent rights. In the
opinion of management, the ultimate liability, if any, resulting from such
litigation will not materially affect the consolidated financial position or
the results of operations of Ricoh.
18
9. SECURED LOAN AND COLLATERAL
Certain subsidiaries of the company provide their land, buildings and lease
receivables to banks, insurance companies and other financial institutions as
collateral. Secured loan are amounted to Yen 712 million, Yen 597 million and
Yen 490 million as of September 30, 2006, March 31, 2007 and September 30,
2007, respectively, which are collateralized by land, buildings and lease
receivables with a book value of Yen 3,195 million, Yen 3,186 million and Yen
3,190 million as of September 30, 2006, March 31, 2007 and September 30, 2007,
respectively.
10. DISCLOSURES ABOUT THE FAIR VALUE OF FINANCIAL INSTRUMENTS
(A) CASH AND CASH EQUIVALENTS, TIME DEPOSITS, TRADE RECEIVABLES, SHORT-TERM
BORROWINGS, CURRENT MATURITIES OF LONG-TERM INDEBTEDNESS, TRADE PAYABLES
AND ACCRUED EXPENSES
The carrying amounts approximate fair values because of the short maturities of
these instruments.
(B) MARKETABLE SECURITIES AND INVESTMENT SECURITIES
The fair value of the marketable securities and investment securities are
principally based on quoted market price.
(C) INSTALLMENT LOANS
The fair value of installment loans is based on the present value of future
cash flows using the current rate for similar instruments of comparable
maturity.
(D) LONG-TERM INDEBTEDNESS
The fair value of each of the long-term indebtedness instruments is based on
the quoted price in the most active market or the present value of future cash
flows associated with each instrument discounted using the current borrowing
rate for similar instruments of comparable maturity.
(E) INTEREST RATE SWAP AGREEMENTS
The fair value of interest rate swap agreements is estimated by obtaining
quotes from brokers.
(F) FOREIGN CURRENCY CONTRACTS AND FOREIGN CURRENCY OPTIONS
The fair value of foreign currency contracts and foreign currency options are
estimated by obtaining quotes from brokers.
The estimated fair value of the financial instruments as of September 30, 2006,
2007 and March 31, 2007 is summarized as follows:
19
Millions of Yen
- --------------------------------------------------------------------------------------------------------------
September 30, 2006 September 30, 2007 March 31, 2007
- --------------------------------------------------------------------------------------------------------------
Carrying Estimated Carrying Estimated Carrying Estimated
Amount Fair Value Amount Fair Value Amount Fair Value
- --------------------------------------------------------------------------------------------------------------
Marketable securities and Investment securities 32,278 32,278 74,397 74,397 75,013 75,013
Installment loans 51,451 51,539 53,874 53,915 52,648 52,697
Long-term indebtedness (182,713) (182,602) (245,379) (238,416) (236,801) (229,981)
Interest rate swap agreements, net 1,023 1,023 602 602 751 751
Foreign currency contracts, net (616) (616) 2,537 2,537 633 633
Foreign currency options, net (777) (777) (1,625) (1,625) (2) (2)
- --------------------------------------------------------------------------------------------------------------
Limitations
Fair value estimates are made at a specific point in time, based on relevant
market information and information about the financial instrument. These
estimates are subjective in nature and involve uncertainties and matters of
significant judgment and therefore cannot be determined with precision. Changes
in assumptions could significantly affect the estimates.
20
11. SEGMENT INFORMATION
The operating segments presented below are the segments of Ricoh for which
separate financial information is available and for which a measure of profit
or loss is evaluated regularly by Ricoh's management in deciding how to
allocate resources and in assessing performance. The accounting policies of the
segments are substantially the same as those described in the summary of
significant accounting policies, as discussed in Note 1.
Ricoh's operating segments are comprised of Office Solutions, including copiers
and related supplies, communications and information systems, Industrial
Products, including thermal media and semiconductors, and Other, including
optical discs and digital cameras.
(A) OPERATING SEGMENT INFORMATION
Millions of Yen
- --------------------------------------------------------------------------------------------------
Half year ended Half year ended Year ended
September 30, 2006 September 30, 2007 March 31, 2007
- --------------------------------------------------------------------------------------------------
Sales-
Office Solutions 838,090 924,627 1,774,467
Industrial Products 70,581 79,631 138,112
Other 80,576 86,270 161,071
Intersegment transaction (2,325) (2,155) (4,725)
- --------------------------------------------------------------------------------------------------
Consolidated 986,922 1,088,373 2,068,925
- --------------------------------------------------------------------------------------------------
Operating Expenses-
Office Solutions 739,320 813,772 1,549,156
Industrial Products 69,687 76,937 135,164
Other 78,678 85,105 158,868
Intersegment transaction (2,370) (2,156) (4,727)
Unallocated expense 28,444 30,147 56,084
- --------------------------------------------------------------------------------------------------
Consolidated 913,759 1,003,805 1,894,545
- --------------------------------------------------------------------------------------------------
Operating Income-
Office Solutions 98,770 110,855 225,311
Industrial Products 894 2,694 2,948
Other 1,898 1,165 2,203
Elimination 45 1 2
Unallocated expense (28,444) (30,147) (56,084)
- --------------------------------------------------------------------------------------------------
Consolidated 73,163 84,568 174,380
- --------------------------------------------------------------------------------------------------
Other, net 1,105 474 139
- --------------------------------------------------------------------------------------------------
Income from Continuing Operations before
Income Taxes, Minority Interests and
Equity in Earnings of Affiliates 74,268 85,042 174,519
- --------------------------------------------------------------------------------------------------
21
Millions of Yen
- --------------------------------------------------------------------------------------------------
Half year ended Half year ended Year ended
September 30, 2006 September 30, 2007 March 31, 2007
- --------------------------------------------------------------------------------------------------
Total Assets-
Office Solutions 1,474,258 1,681,781 1,570,757
Industrial Products 86,565 97,262 93,346
Other 114,145 113,320 112,255
Elimination (1,924) (1,185) (1,327)
Corporate assets 417,930 408,667 468,375
- --------------------------------------------------------------------------------------------------
Consolidated 2,090,974 2,299,845 2,243,406
- --------------------------------------------------------------------------------------------------
Expenditures for segment
assets-
Office Solutions 34,429 34,925 72,465
Industrial Products 2,855 3,383 8,580
Other 1,411 868 2,630
Corporate assets 483 502 2,125
- --------------------------------------------------------------------------------------------------
Consolidated 39,178 39,678 85,800
- --------------------------------------------------------------------------------------------------
Depreciation-
Office Solutions 29,439 30,417 62,862
Industrial Products 2,715 3,264 6,099
Other 980 1,193 2,072
Corporate assets 604 819 1,399
- --------------------------------------------------------------------------------------------------
Consolidated 33,738 35,693 72,432
- --------------------------------------------------------------------------------------------------
Unallocated expense represents expenses for corporate headquarters.
Intersegment sales are not separated by operating segment because they are
immaterial.
Corporate assets consist primarily of cash and cash equivalents and marketable
securities maintained for general corporate purposes.
22
(B) GEOGRAPHIC INFORMATION
Sales which are attributed to countries based on location of customers and
long-lived assets for the half years ended September 30, 2006, 2007 and for the
year ended March 31, 2007 are as follows:
Millions of Yen
- --------------------------------------------------------------------------------------------------
Half year ended Half year ended Year ended
September 30, 2006 September 30, 2007 March 31, 2007
- --------------------------------------------------------------------------------------------------
Sales-
Japan 492,491 504,439 1,002,251
The Americas 203,584 215,701 426,453
Europe 226,504 289,116 507,158
Other 64,343 79,117 133,063
- --------------------------------------------------------------------------------------------------
Consolidated 986,922 1,088,373 2,068,925
- --------------------------------------------------------------------------------------------------
Property, Plant and
Equipment -
Japan 200,715 199,045 199,308
The Americas 17,640 19,176 18,102
Europe 26,749 23,365 28,345
Other 13,687 20,117 18,913
- --------------------------------------------------------------------------------------------------
Consolidated 258,791 261,703 264,668
- --------------------------------------------------------------------------------------------------
(C) ADDITIONAL INFORMATION
The following information shows net sales and operating income recognized by
geographic origin for the half years ended September 30, 2006, 2007 and for the
year ended March 31, 2007. In addition to the disclosure requirements under
SFAS No.131, "Disclosure about Segments of an Enterprise and Related
Information," Ricoh discloses this information as supplemental information in
light of the disclosure requirements of the Japanese Securities and Exchange
Law, which a Japanese public company is subject to.
23
Millions of Yen
- --------------------------------------------------------------------------------------------------
Half year ended Half year ended Year ended
September 30, 2006 September 30, 2007 March 31, 2007
- --------------------------------------------------------------------------------------------------
Sales-
Japan
External customers 504,429 521,352 1,026,663
Intersegment 246,032 248,573 495,304
- --------------------------------------------------------------------------------------------------
Total 750,461 769,925 1,521,967
- --------------------------------------------------------------------------------------------------
The Americas
External customers 203,560 213,825 426,009
Intersegment 1,731 2,100 3,253
- --------------------------------------------------------------------------------------------------
Total 205,291 215,925 429,262
- --------------------------------------------------------------------------------------------------
Europe
External customers 226,823 289,308 508,200
Intersegment 1,740 1,731 3,595
- --------------------------------------------------------------------------------------------------
Total 228,563 291,039 511,795
- --------------------------------------------------------------------------------------------------
Other
External customers 52,110 63,888 108,053
Intersegment 72,402 90,905 160,990
- --------------------------------------------------------------------------------------------------
Total 124,512 154,793 269,043
- --------------------------------------------------------------------------------------------------
Elimination of intersegment
sales (321,905) (343,309) (663,142)
- --------------------------------------------------------------------------------------------------
Consolidated 986,922 1,088,373 2,068,925
- --------------------------------------------------------------------------------------------------
Operating Expenses-
Japan 698,853 719,417 1,411,653
The Americas 196,341 210,474 408,150
Europe 218,977 275,209 478,380
Other 115,687 142,549 251,486
- --------------------------------------------------------------------------------------------------
Elimination of intersegment
sales (316,099) (343,844) (655,124)
- --------------------------------------------------------------------------------------------------
Consolidated 913,759 1,003,805 1,894,545
- --------------------------------------------------------------------------------------------------
Operating Income-
Japan 51,608 50,508 110,314
The Americas 8,950 5,451 21,112
Europe 9,586 15,830 33,415
Other 8,825 12,244 17,557
- --------------------------------------------------------------------------------------------------
Elimination of intersegment
profit (5,806) 535 (8,018)
- --------------------------------------------------------------------------------------------------
Consolidated 73,163 84,568 174,380
- --------------------------------------------------------------------------------------------------
Other, net 1,105 474 139
- --------------------------------------------------------------------------------------------------
Income from Continuing Operations
before Income Taxes, Minority
Interests and Equity in
Earnings of Affiliates 74,268 85,042 174,519
- --------------------------------------------------------------------------------------------------
Total Assets-
Japan 1,246,639 1,294,958 1,282,085
The Americas 249,432 355,155 256,049
Europe 262,571 307,204 314,815
Other 93,550 112,876 101,550
Elimination (179,148) (179,015) (179,468)
Corporate assets 417,930 408,667 468,375
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Consolidated 2,090,974 2,299,845 2,243,406
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Intersegment sales between geographic areas are made at cost plus profit.
Operating income by geographic area is sales less expense related to the area's
operating revenue.
No single customer accounted for 10% or more of the total revenues for the half
years ended September 30, 2006, 2007 and for the year ended March 31, 2007.
12. SUPPLEMENTARY INFORMATION TO THE STATEMENT OF INCOME
The following amounts were charged to selling, general and administrative
expenses for the half years ended September 30, 2006, 2007 and for the year
ended March 31, 2007:
Millions of Yen
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Half year ended Half year ended Year ended
September 30, 2006 September 30, 2007 March 31, 2007
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Research and development costs 56,529 61,575 114,985
Advertising costs 8,240 7,964 14,456
Shipping and handling costs 9,088 11,370 19,280
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