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, 2004
Commission File Number 2 - 68279
RICOH COMPANY, LTD.
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(Translation of Registrant's name into English)
15-5, Minami-Aoyama 1-Chome, Minato-ku, Tokyo 107-8544, 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.
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(Registrant)
By: /S/ Zenji Miura
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Zenji Miura
Managing Director
Executive Vice President
General Manager of the
Finance & Accounting Division
December 15, 2004
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RICOH COMPANY, LTD.
Interim Consolidated Financial Statements
For the six months ended September 30, 2004
This is an English translation of the Interim Securities Report (Hanki
Hokokusho) for the six months ended September 30, 2004 pursuant to the
Securities and Exchange Law of Japan.
Ricoh Company, Ltd. and Consolidated Subsidiaries
CONSOLIDATED BALANCE SHEETS
September 30, 2003, 2004 and March 31, 2004
Millions of Yen
--------------------------------------------
September 30, September 30, March 31,
ASSETS 2003 2004 2004
=====================================================================================================
Current Assets:
Cash and cash equivalents 225,013 214,706 203,039
Time deposits 1,881 853 962
Marketable securities 136 51,119 45,124
Trade receivables-
Notes 75,100 76,457 76,499
Accounts 349,618 338,870 362,784
Less- Allowance for doubtful receivables (17,084) (18,017) (17,039)
Inventories-
Finished goods 105,716 99,438 100,154
Work in process and raw materials 46,438 52,355 45,215
Deferred income taxes and other 58,567 55,161 55,079
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Total current assets 845,385 870,942 871,817
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Property, Plant and Equipment, at cost:
Land 42,921 43,326 43,423
Buildings 203,869 202,506 200,844
Machinery and equipment 655,825 658,782 653,467
Construction in progress 7,868 11,916 10,629
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910,483 916,530 908,363
Less- Accumulated depreciation (668,225) (678,773) (669,651)
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242,258 237,757 238,712
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Investments and Other Assets:
Finance receivables 497,109 536,636 514,047
Investment securities 67,726 20,846 21,871
Investments in and advances to affiliates 45,909 49,281 46,967
Goodwill 26,325 26,549 25,298
Other intangible assets 41,992 45,185 43,233
Lease deposits and other 145,458 90,259 90,848
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824,519 768,756 742,264
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1,912,162 1,877,455 1,852,793
=====================================================================================================
1
Millions of Yen
=====================================================================================================
September 30, September 30, March 31,
LIABILITIES AND SHAREHOLDERS' INVESTMENT 2003 2004 2004
=====================================================================================================
Current Liabilities:
Short-term borrowings 111,872 79,626 68,952
Current maturities of long-term indebtedness 88,696 128,242 82,210
Trade payables-
Notes 28,876 26,519 29,937
Accounts 244,400 250,032 267,735
Accrued income taxes 37,735 26,994 25,050
Accrued expenses and other 123,688 131,711 133,544
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Total current liabilities 635,267 643,124 607,428
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Long-term Liabilities:
Long-term indebtedness 284,392 227,452 281,570
Accrued pension and severance costs 212,756 87,017 83,492
Deferred income taxes 28,219 39,167 36,295
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525,367 353,636 401,357
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Minority Interests 48,453 50,415 48,877
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Commitments and Contingent Liabilities (Note 7)
Shareholders' Investment:
Common stock;
Authorized - 993,000,000 as of September 30, 2003,
September 30, 2004 and March 31, 2004
Issued - 744,912,078 shares as of September 30, 2003,
September 30, 2004 and March 31, 2004 135,364 135,364 135,364
Additional paid-in capital 186,600 186,600 186,599
Retained earnings 471,815 544,581 515,372
Accumulated other comprehensive income (loss) (86,531) (24,095) (30,272)
Treasury stock at cost; 2,005,815 shares, 6,126,488 shares
and 6,017,187 shares as of September 30, 2003, 2004 and
March 31, 2004 (4,173) (12,170) (11,932)
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Total shareholders' investment 703,075 830,280 795,131
-----------------------------------------------------------------------------------------------------
1,912,162 1,877,455 1,852,793
=====================================================================================================
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, 2003, 2004 and Year Ended March 31, 2004
Millions of Yen
-------------------------------------------
Half year ended Half year ended Year ended
September 30, September 30, March 31,
2003 2004 2004
=====================================================================================================
Net Sales 888,090 876,003 1,780,245
Cost of Sales 499,983 512,123 1,014,619
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Gross profit 388,107 363,880 765,626
Selling, General and Administrative Expenses 310,852 306,122 623,935
Transfer to the government of the substitutional
portion of Employees' Pension Fund:
Settlement loss - - 48,657
Subsidy from government - - (56,972)
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Operating income 77,255 57,758 150,006
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Other (Income) Expenses:
Interest and dividend income 1,313 1,073 1,925
Interest expense (2,863) (2,316) (5,290)
Foreign currency exchange (gain) loss, net (3,991) 2,757 (6,136)
Other, net (298) 792 2,558
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Total (5,839) 2,306 (6,943)
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Income before Income Taxes, Minority Interests,
Equity in Earnings of Affiliates and Cumulative
Effect of Accounting Change 71,416 60,064 143,063
Provision for Income Taxes:
Current 29,681 21,417 53,303
Deferred (1,257) 2,362 3,338
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Total 28,424 23,779 56,641
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Income before Minority Interests, Equity in Earnings of
Affiliates and Cumulative Effect of Accounting Change 42,992 36,285 86,422
Minority Interests 1,699 1,898 4,094
Equity in Earnings of Affiliates 972 1,434 2,065
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Income before Cumulative Effect of Accounting Change 42,265 35,821 84,393
Cumulative Effect of Accounting Change, net of tax - - 7,373
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Net Income 42,265 35,821 91,766
=====================================================================================================
Yen
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Per Share of Common Stock:
Income before cumulative effect of accounting change 56.79 48.48 113.69
Cumulative effect of accounting change - - 9.94
Net income 56.79 48.48 123.63
=====================================================================================================
Cash dividends per share 7.00 10.00 15.00
=====================================================================================================
Per American Depositary Share, each representing
5 shares of common stock:
Income before cumulative effect of accounting change 283.95 242.40 568.45
Cumulative effect of accounting change - - 49.70
Net income 283.95 242.40 618.15
=====================================================================================================
Cash dividends per share 35.00 50.00 75.00
=====================================================================================================
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, 2003, 2004 and Year Ended March 31, 2004
Millions of Yen
-------------------------------------------
Half year ended Half year ended Year ended
September 30, September 30, March 31,
2003 2004 2004
=====================================================================================================
Common Stock:
Beginning balance 135,364 135,364 135,364
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Ending balance 135,364 135,364 135,364
=====================================================================================================
Additional Paid-in Capital:
Beginning balance 186,521 186,599 186,521
Issuance of treasury stock in exchange for subsidiary's
stock and other 79 1 78
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Ending balance 186,600 186,600 186,599
=====================================================================================================
Retained Earnings:
Beginning balance 434,748 515,372 434,748
Adjustment for change of fiscal period on consolidated
subsidiaries - 777 -
Net income for the period 42,265 35,821 91,766
Dividends declared and approved (5,198) (7,389) (11,142)
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Ending balance 471,815 544,581 515,372
=====================================================================================================
Accumulated other comprehensive income (loss):
Beginning balance (94,733) (30,272) (94,733)
Adjustment for change of fiscal period on consolidated
subsidiaries - (1,665) -
Other comprehensive income (loss) for the period,
net of tax 8,202 7,842 71,834
Income before Cumulative Effect of Accounting Change,
net of tax - - (7,373)
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Ending balance (86,531) (24,095) (30,272)
=====================================================================================================
Treasury stock:
Beginning balance (4,386) (11,932) (4,386)
Purchase of treasury stock (4,056) (251) (11,411)
Sales of treasury stock - 13 13
Issuance of treasury stock in exchange for
subsidiary's stock 4,269 - 3,852
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Ending balance (4,173) (12,170) (11,932)
=====================================================================================================
Comprehensive income:
Net income for the period 42,265 35,821 91,766
Other comprehensive income (loss) for the period,
net of tax 8,202 6,177 64,461
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Total comprehensive income for the period 50,467 41,998 156,227
=====================================================================================================
The accompanying notes to consolidated financial statements are an integral part
of these statements.
4
Ricoh Company, Ltd. and Consolidated Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Half Years Ended September 30, 2003, 2004 and Year Ended March 31, 2004
Millions of Yen
-------------------------------------------
Half year ended Half year ended Year ended
September 30, September 30, March 31,
2003 2004 2004
=====================================================================================================
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income 42,265 35,821 91,766
Adjustments to reconcile net income to net cash
provided by operating activities--
Depreciation and amortization 37,827 36,963 76,968
Equity in earnings of affiliates, net of dividends
received (230) (631) (1,001)
Deferred income taxes (1,257) 2,362 3,338
Losses on disposals and sales of property, plant and 837 1,569 2,035
equipment
Cumulative effect of accounting change, net of tax - - (7,373)
Changes in assets and liabilities, net of effects from
acquisition--
(Increase) decrease in trade receivables 7,935 27,001 (11,367)
Increase in inventories (7,979) (6,122) (4,317)
Increase in finance receivables (21,723) (20,876) (32,650)
(Decrease) increase in trade payables (6,773) (20,386) 21,316
Decrease in accrued income taxes and
accrued expenses and other (5,069) (3,765) (5,913)
(Decrease) increase in accrued pension and severance
costs 9,806 1,332 (609)
Other, net 6,017 4,712 22,718
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Net cash provided by operating activities 61,656 57,980 154,911
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CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sales of property, plant and equipment 134 578 190
Expenditures for property, plant and equipment (36,282) (37,758) (75,432)
Payments for purchases of available-for-sale securities (25,103) (6,149) (35,518)
Proceeds from sales of available-for-sale securities 33,514 5 45,464
Decrease in time deposits, net 9,159 118 9,915
Other, net (1,419) 9,267 (8,002)
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Net cash used in investing activities (19,997) (33,939) (63,383)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long-term indebtedness 1,125 24,917 13,349
Repayment of long-term indebtedness (15,970) (33,832) (31,509)
(Decrease) increase in short-term borrowings, net 30,244 9,099 (10,728)
Proceeds from issuance of long-term debt securities 1,000 9,000 1,000
Repayment of long-term debt securities (14,000) (18,000) (23,910)
Dividends paid (5,181) (7,405) (11,136)
Payment for purchase of treasury stock (3,643) (251) (11,411)
Other, net (218) (434) (490)
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Net cash used in financing activities (6,643) (16,906) (74,835)
-----------------------------------------------------------------------------------------------------
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND
CASH EQUIVALENTS 754 2,057 (2,897)
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NET INCREASE IN CASH AND CASH EQUIVALENTS 35,770 9,192 13,796
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 189,243 203,039 189,243
ADJUSTMENT FOR CHANGE OF FISCAL PERIOD ON CONSOLIDATED
SUBSIDIARIES - 2,475 -
-----------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD 225,013 214,706 203,039
=====================================================================================================
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
CASH PAID DURING THE YEAR FOR-
Interest 3,689 2,793 6,479
Income taxes 33,569 20,891 66,914
=====================================================================================================
The accompanying notes to consolidated financial statements are an integral part
of these statements.
5
Ricoh Company, Ltd. and Consolidated Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING AND REPORTING POLICIES
According to the article 81 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 accounting principles generally accepted in the United States
of America. Significant accounting and reporting policies are summarized below:
The accompanying consolidated financial statements for the half years ended
September 30, 2003, 2004 and for the year ended March 31, 2004 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
accounting principles generally accepted in the United States of America.
(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.
Certain overseas subsidiaries of the company changed their fiscal year end from
December 31 to March 31, at the beginning of fiscal 2005. As a result, retained
earnings increased by Yen 777 million and other comprehensive income (loss)
decreased by Yen 1,665 million.
(b) REVENUE RECOGNITION
Ricoh generates revenue principally through the sale of equipment, supplies and
related services under separate contractual arrangements for each. Generally,
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.
Most equipment sales require that Ricoh installs the product. As such, revenue
is recognized at the time of delivery and installation at the customer location.
Service revenues result primarily from maintenance contracts that are normally
entered into at the time the equipment is sold. 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 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.
6
(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 5, 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. On April 1, 2001,
Ricoh adopted Statement of Financial Accounting Standards ("SFAS") No.133,
"Accounting for Derivative Instruments and Hedging Activities," and SFAS No.138,
"Accounting for Certain Derivative Instruments and Certain Hedging Activities"
which require that all derivative instruments be recorded on the balance sheet
at their respective fair values.
In accordance with SFAS No.133, Ricoh, when it enters into a derivative
contract, makes a determination as to whether or not for accounting purposes the
derivative is part of a hedging relationship. 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 sheet 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.
7
(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, 2003, 2004 and March 31,
2004, 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
their then fair value for any declines in market value determined to be other
than temporary. These impairment losses are charged against earnings at the time
that a decline has been determined to be other than temporary based primarily on
the financial condition of the issuer and the extent and length of time of the
decline. Investments whose market values have declined below cost that extends
for nine months are automatically written-down to their then fair value in all
cases.
The cost of the securities sold is computed based on the average cost of each
security held at the time of sale.
Non-marketable equity securities owned by Ricoh primarily relate to less than
20% owned companies and are stated at cost.
As discussed further in Note 2, Ricoh changed its accounting policy with respect
to the recognition of unrealized gains and losses as realized in the statements
of income on transfers of marketable equity securities. In relation to this
change, Ricoh has recognized in its fiscal 2004 consolidated statement of income
a cumulative effect of accounting change, net of tax, of Yen 7,373 million.
(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.
8
(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 42% 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, 2003,
2004 and for the year ended March 31, 2004 are summarized below:
Half year ended Half year ended Year ended
September 30, 2003 September 30, 2004 March 31, 2004
================================================================================
Buildings 4.0% 4.1% 8.1%
Machinery and equipment 23.4 23.1 42.9
================================================================================
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) GOODWILL AND OTHER INTANGIBLE ASSETS
Ricoh fully adopted the provision of SFAS No.141, "Business Combinations," and
SFAS No.142, "Goodwill and Other Intangible Assets." SFAS No.141 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 eliminates the amortization of goodwill and instead
requires annual impairment testing thereof. SFAS No.142 also requires acquired
intangible assets with a definite useful life to be amortized over their
respective estimated useful lives and reviewed for impairment in accordance with
SFAS No.144. Any acquired intangible asset determined to have an indefinite
useful life is not amortized, but instead is tested for impairment based on its
fair value until its life would be determined to no longer be indefinite.
(k) PENSION AND RETIREMENT ALLOWANCES PLANS
The measurement of pension costs and liabilities is determined in accordance
with SFAS No.87, "Employers' Accounting for Pensions." Under SFAS No.87, changes
in the amount of either the projected benefit obligation or plan assets
resulting from actual results different from that assumed and from changes in
assumptions can result in gains and losses not yet recognized in the
consolidated financial statements. Amortization of an unrecognized net gain or
loss is included as a component of the net periodic benefit plan cost for a year
if, as of the beginning of the year, that unrecognized net gain or loss exceeds
10 percent of the greater of (1) the projected benefit obligation or (2) the
fair value of that plan's assets. In such case, the amount of amortization
recognized is the resulting excess divided by the average remaining service
period of active employees expected to receive benefits under the plan. 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.
9
In December 2003, the Financial Accounting Standards Board ("FASB") issued SFAS
No.132 (revised), "Employers' Disclosures about Pensions and Other
Postretirement Benefits." SFAS No.132 (revised) prescribes employers'
disclosures about pension plans and other postretirement benefit plans; it does
not change the measurement or recognition of those plans. The Statement retains
and revises the disclosure requirements contained in the original SFAS No.132.
It also requires additional disclosures about defined benefit pension plans and
other postretirement benefit plans. The interim-period disclosures required by
this Statement are effective for interim periods beginning after December 15,
2003. Ricoh's disclosures in Note 3 incorporate the requirements of SFAS No.132
(revised).
(l) 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.
(m) RESEARCH AND DEVELOPMENT EXPENSES AND ADVERTISING COSTS
Research and development expenses and advertising costs are expensed as
incurred.
(n) 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.
(o) IMPAIRMENT OR DISPOSAL OF LONG-LIVED ASSETS
Ricoh adopted SFAS No.144, "Accounting for the Impairment or Disposal of
Long-Lived Assets." SFAS No.144 develops a single accounting model, based on the
framework established in SFAS No.121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of" for long-lived
assets to be disposed of by sale, and broadens the scope of what constitutes a
business to be disposed of that should be reported as a discontinued operation.
SFAS No.144 requires that 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.
(p) 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.
10
Ricoh has no dilutive securities outstanding as of September 30, 2003, 2004 and
March 31, 2004 and therefore there is no difference between basic and diluted
net income per share.
(q) NON-CASH TRANSACTIONS
The following non-cash transactions have been excluded from the consolidated
statements of cash flows for the half years ended September 30, 2003, 2004 and
for the year ended March 31, 2004:
Millions of Yen
-----------------------------------------------------
Half year ended Half year ended Year ended
September 30, 2003 September 30, 2004 March 31, 2004
===================================================================================================
Capital lease obligations incurred 50 479 75
Issuance of treasury stock in exchange for
subsidiary's stock 3,930 - 3,930
Transfer of marketable equity securities to
employee retirement benefit trust - - 3,648
===================================================================================================
(r) 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.
2. SECURITIES
Marketable securities and investment securities as of September 30, 2003, 2004
and March 31, 2004 consist of the following:
11
Millions of Yen
------------------------------------------
September 30, September 30, March 31,
2003 2004 2004
====================================================================================================
Marketable securities:
Available-for-sale securities 136 51,119 45,124
====================================================================================================
Investment securities:
Available-for-sale securities 60,555 13,799 14,766
Non-marketable equity securities 7,171 7,047 7,105
----------------------------------------------------------------------------------------------------
67,726 20,846 21,871
====================================================================================================
The current and noncurrent 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, 2003, 2004 and March 31,
2004 are as follows:
Millions of Yen
-------------------------------------------------------------------------------------------------------------
September 30, 2003 September 30, 2004 March 31, 2004
-------------------------------------------------------------------------------------------------------------
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 121 4 - 125 51,137 2 21 51,118 45,139 6 22 45,123
Other 11 - - 11 1 - - 1 1 - - 1
------------------------------------------------------------------------------------------------------------------------------
132 4 - 136 51,138 2 21 51,119 45,140 6 22 45,124
==============================================================================================================================
Non-current:
Equity
securities 6,088 8,146 126 14,108 5,088 7,047 52 12,083 5,053 8,080 33 13,100
Corporate debt
securities 45,013 2 83 44,932 - - - - - - - -
Other 1,261 266 12 1,515 1,309 407 - 1,716 1,174 492 - 1,666
------------------------------------------------------------------------------------------------------------------------------
52,362 8,414 221 60,555 6,397 7,454 52 13,799 6,227 8,572 33 14,766
==============================================================================================================================
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, 2004, regardless of their balance sheet classification,
are as follows:
Millions of Yen
-------------------------------
Cost Fair value
===============================================================
Due within one year 51,137 51,118
---------------------------------------------------------------
51,137 51,118
===============================================================
Proceeds from the sales of available-for-sale securities were Yen 33,514
million, Yen 45,464 million for the half year ended September 30, 2003 and for
the year ended March 31 2004, respectively. There were no significant proceeds
from the sales of available-for-sale securities for the half year ended
September 30, 2004.
There were no significant realized gains on sales of available-for-sale
securities for the half years ended September 30, 2003, 2004 and for the year
ended March 31, 2004 except for the following contributed marketable equity
securities to the Company's employee benefit trust.
There were no significant realized losses on sales of available-for-sale
securities for the half years ended September 30, 2003, 2004 and for the year
ended March 31, 2004. There were no significant losses on securities for the
half years ended September 30, 2003, 2004 and for the year ended March 31, 2004
charged to other expense for declines in market value of available-for-sale
securities where the decline was determined to be other than temporary.
12
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 Yen 20,760 million. The net unrealized gains on these
available-for-sale securities amounting to Yen 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 were Yen 3,648 million and Yen 2,658 million, 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 Yen 2,658 million. In addition, Ricoh has recognized in its
fiscal 2004 consolidated statement of income a cumulative effect of accounting
change, net of tax, of Yen 7,373 million associated with the 2000 Transfer.
13
3.PENSION BENEFIT COSTS
The net periodic benefit costs of the pension plans for the half years ended
September 30, 2003, 2004 and for the year ended March 31, 2004 consisted of the
following components:
Millions of Yen
------------------------------------------------
Half year ended Half year ended Year ended
September 30, September 30, March 31,
2003 2004 2004
==============================================================================================
Service cost 8,406 6,412 15,694
Interest cost 6,610 4,341 12,719
Expected return on plan assets (2,986) (2,804) (5,872)
Net amortization 5,683 360 10,805
Settlement loss (benefit) 293 - (2,537)
----------------------------------------------------------------------------------------------
Total net periodic pension cost 18,006 8,309 30,809
==============================================================================================
Ricoh accounted for the transfer of which was the entire substitutional portion
benefit obligation from the domestic employee's pension fund ("EPF") plan to the
Japanese government in accordance with EITF Issue No. 03-2 "Accounting for the
Transfer to the Japanese Government of the Substitutional Portion of Employee
Pension Fund Liabilities" ("EITF 03-2"). As specified in EITF 03-2, the entire
separation process is to be accounted for at the time of completion of the
transfer to the government of the substitutional portion of the benefit
obligation and related plan assets as a settlement in accordance with SFAS No.88
"Employers' Accounting for Settlements and Curtailments of Defined Benefit
Pension Plans and for Termination Benefits." As a result of the transfer, Ricoh
recognized as a subsidy from the Japanese government equal to the difference
between the fair value of the obligation deemed "settled" with the Japanese
government and the assets required to be transferred to the government. The
subsidy that Ricoh recognized amounted to Yen 56,972 million. In addition, Ricoh
recognized as a settlement loss equal to the amount calculated as the ratio of
the obligation settled to the total EPF obligation immediately prior to
settlement, both of which exclude the effect of future salary progression
relating to the substitutional portion, times the net unrecognized gain/loss
immediately prior to settlement, which amounted to Yen 48,657 million. These
gain and loss were included in operating income.
In addition to EPF plan, the Company had maintained a defined benefit plan for
certain qualified employees. Effective January 1, 2004, the Company liquidated
this plan and recorded a settlement loss of Yen 5,958 million which was included
in selling, general and administrative expenses in the consolidated statement of
income.
14
4. PER SHARE DATA
Shareholders' equity per share was Yen 946.38, Yen 1,076.11 and Yen 1,123.84 as
of September 30, 2003, 2004, and March 31, 2004, respectively.
Dividends per share shown in the consolidated statements of income are computed
based on dividends paid for the half years ended September 30, 2003, 2004 and
the year ended March 31, 2004.
The following table sets forth earnings per share:
Half year ended Half year ended Year ended
September 30, 2003 September 30, 2004 March 31, 2004
====================================================================================================
Thousands of shares
--------------------------------------------------------
Weighted average common shares outstanding 744,261 738,844 742,293
----------------------------------------------------------------------------------------------------
Yen
--------------------------------------------------------
Earnings per share 56.79 48.48 123.63
====================================================================================================
Ricoh has no dilutive securities outstanding as of September 30, 2003, 2004 and
March 31, 2004 and therefore there is no difference between basic and diluted
net income per share.
5. 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.
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, 2003, 2004 and for
the year ended March 31, 2004 as the critical terms of the interest rate swap
match the terms of the hedged debt obligations.
15
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, 2003, 2004 and for the year ended March 31
2004 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 17
million of the balance of accumulated other comprehensive loss as of September
30, 2004.
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.
6. 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 590,271 million, Yen 634,273 million and Yen 665,833
million as of September 30, 2003, March 31, 2004 and September 30, 2004,
respectively, of which Yen 329,013 million, Yen 314,730 million and Yen 332,672
million related to commercial paper and medium-term notes programs at prevailing
interest rates.
7. COMMITMENTS AND CONTINGENT LIABILITIES
Ricoh was contingently liable as guarantor for employees' housing loans
amounted to Yen 242 million as of September 30, 2004.
As of September 30, 2004, 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.
8. 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 1,483 million, Yen 1,410 million
and Yen 1,265 million as of September 30, 2003, March 31, 2004 and September 30,
2004, respectively, which are collateralized by land, buildings and lease
receivables with a book value of Yen 3,633 million, Yen 3,468 million and Yen
3,352 million as of September 30, 2003, March 31, 2004 and September 30, 2004,
respectively.
16
9. 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, 2003,
2004 and March 31, 2004 is summarized as follows:
Millions of Yen
--------------------------------------------------------------------------------
September 30, 2003 September 30, 2004 March 31, 2004
-------------------------- -------------------------- --------------------------
Carrying Estimated Carrying Estimated Carrying Estimated
Amount Fair Value Amount Fair Value Amount Fair Value
==================================================================================================================
Marketable securities and
Investment securities 67,862 67,862 71,965 71,965 66,995 66,995
Installment loans 50,818 51,016 51,031 51,176 51,455 51,626
Long-term indebtedness (284,392) (287,780) (227,452) (228,396) (281,570) (284,528)
Interest rate swap agreements, net 2,543 2,543 1,864 1,864 2,266 2,266
Foreign currency contracts, net 1,136 1,136 253 253 1,876 1,876
Foreign currency options, net 1,147 1,147 (332) (332) (145) (145)
==================================================================================================================
17
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.
10. 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, 2003, 2004 and for the year
ended March 31, 2004:
Millions of Yen
---------------------------------------------------------
Half year ended Half year ended Year ended
September 30, 2003 September 30, 2004 March 31, 2004
=================================================================================================
Research and development costs 44,255 53,413 92,515
Advertising costs 8,272 8,007 17,950
Shipping and handling costs 6,217 6,783 12,352
=================================================================================================
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 equipment, including copiers
and related supplies, communications and information systems, and Other,
including optical equipment and electronic devices.
The following tables present certain information regarding Ricoh's operating
segments and operations by geographic areas for the half years ended September
30, 2003, 2004 and for the year ended March 31, 2004.
18
(a) OPERATING SEGMENT INFORMATION
Millions of Yen
---------------------------------------------------------
Half year ended Half year ended Year ended
September 30, September 30, March 31,
2003 2004 2004
=====================================================================================================
Sales-
Office equipment 775,508 765,965 1,557,633
Other 113,747 111,304 225,074
Intersegment transaction (1,165) (1,266) (2,462)
-----------------------------------------------------------------------------------------------------
Consolidated 888,090 876,003 1,780,245
=====================================================================================================
Operating Expenses-
Office equipment 672,809 683,759 1,353,304
Other 110,761 110,047 220,391
Intersegment transaction (1,195) (1,268) (2,494)
Unallocated expense 28,460 25,707 59,038
-----------------------------------------------------------------------------------------------------
Consolidated 810,835 818,245 1,630,239
=====================================================================================================
Operating Income-
Office equipment 102,699 82,206 204,329
Other 2,986 1,257 4,683
Elimination 30 2 32
Unallocated expense (28,460) (25,707) (59,038)
-----------------------------------------------------------------------------------------------------
Consolidated 77,255 57,758 150,006
=====================================================================================================
Other, net (5,839) 2,306 (6,943)
=====================================================================================================
Income before Income Taxes, Minority
Interests, Equity in Earnings of
Affiliates and Cumulative Effect of
Accounting Change 71,416 60,064 143,063
=====================================================================================================
Millions of Yen
---------------------------------------------------------
Half year ended Half year ended Year ended
September 30, September 30, March 31,
2003 2004 2004
=====================================================================================================
Total Assets-
Office equipment 1,196,927 1,233,319 1,220,747
Other 184,083 173,133 182,532
Elimination (7,596) (9,185) (8,047)
Corporate assets 538,748 480,188 457,561
-----------------------------------------------------------------------------------------------------
Consolidated 1,912,162 1,877,455 1,852,793
=====================================================================================================
Expenditure for segment assets-
Office equipment 31,938 34,297 65,366
Other 3,916 2,791 8,712
Corporate assets 480 1,149 1,429
-----------------------------------------------------------------------------------------------------
Consolidated 36,334 38,237 75,507
=====================================================================================================
Depreciation-
Office equipment 29,378 27,440 57,956
Other 3,349 2,230 7,774
Corporate assets 895 1,371 1,954
-----------------------------------------------------------------------------------------------------
Consolidated 33,622 31,041 67,684
=====================================================================================================
19
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.
(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, 2003, 2004 and for the
year ended March 31, 2004 are as follows:
Millions of Yen
---------------------------------------------------------
Half year ended Half year ended Year ended
September 30, September 30, March 31,
2003 2004 2004
=====================================================================================================
Sales-
Japan 448,636 469,176 914,060
The Americas 167,664 161,330 326,380
Europe 196,951 192,987 402,392
Other 74,839 52,510 137,413
-----------------------------------------------------------------------------------------------------
Consolidated 888,090 876,003 1,780,245
=====================================================================================================
Long-Lived Assets-
Japan 249,199 246,166 248,277
The Americas 66,242 64,964 62,617
Europe 33,780 30,728 31,000
Other 11,428 9,934 10,093
-----------------------------------------------------------------------------------------------------
Consolidated 360,649 351,792 351,987
=====================================================================================================
Ricoh's long-lived assets consist property, plant and equipment, goodwill, other
intangible assets and lease deposits and other.
(c) ADDITIONAL INFORMATION
The following information shows net sales and operating income recognized by
geographic origin for the half years ended September 30, 2003, 2004 and for the
year ended March 31, 2004. 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.
20
Millions of Yen
---------------------------------------------------------
Half year ended Half year ended Year ended
September 30, September 30, March 31,
2003 2004 2004
=====================================================================================================
Sales-
Japan
External customers 478,922 481,473 962,127
Intersegment 184,331 189,951 351,070
-----------------------------------------------------------------------------------------------------
Total 663,253 671,424 1,313,197
-----------------------------------------------------------------------------------------------------
The Americas
External customers 161,965 159,184 315,504
Intersegment 2,992 4,814 5,249
-----------------------------------------------------------------------------------------------------
Total 164,957 163,998 320,753
-----------------------------------------------------------------------------------------------------
Europe
External customers 196,560 193,941 400,646
Intersegment 1,771 1,789 3,770
-----------------------------------------------------------------------------------------------------
Total 198,331 195,730 404,416
-----------------------------------------------------------------------------------------------------
Other
External customers 50,643 41,405 101,968
Intersegment 49,225 43,818 91,373
-----------------------------------------------------------------------------------------------------
Total 99,868 85,223 193,341
-----------------------------------------------------------------------------------------------------
Elimination of intersegment sales (238,319) (240,372) (451,462)
-----------------------------------------------------------------------------------------------------
Consolidated 888,090 876,003 1,780,245
=====================================================================================================
Operating Expenses-
Japan 606,466 631,732 1,215,875
The Americas 157,274 157,865 305,284
Europe 188,819 184,768 382,383
Other 95,302 79,788 182,870
-----------------------------------------------------------------------------------------------------
Elimination of intersegment sales (237,026) (235,908) (456,173)
-----------------------------------------------------------------------------------------------------
Consolidated 810,835 818,245 1,630,239
=====================================================================================================
Operating Income-
Japan 56,787 39,692 97,322
The Americas 7,683 6,133 15,469
Europe 9,512 10,962 22,033
Other 4,566 5,435 10,471
-----------------------------------------------------------------------------------------------------
Elimination of intersegment profit (1,293) (4,464) 4,711
-----------------------------------------------------------------------------------------------------
Consolidated 77,255 57,758 150,006
=====================================================================================================
Other, net (5,839) 2,306 (6,943)
=====================================================================================================
Income before Income Taxes, Minority
Interests, Equity in Earnings of
Affiliates and Cumulative Effect of
Accounting Change 71,416 60,064 143,063
=====================================================================================================
Total Assets-
Japan 1,061,188 1,069,762 1,071,297
The Americas 192,700 205,198 188,644
Europe 186,650 206,108 188,184
Other 69,154 60,406 63,701
Elimination (136,278) (144,207) (116,594)
Corporate assets 538,748 480,188 457,561
-----------------------------------------------------------------------------------------------------
Consolidated 1,912,162 1,877,455 1,852,793
=====================================================================================================
21
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, 2003, 2004 and for the year ended March 31, 2004.
12. SUBSEQUENT EVENTS
On October 1, 2004, the Company acquired all its shares (Number of shares held
100,000) of Hitachi Printing Solutions, Ltd. ("Hitachi PRS") from Hitachi, Ltd.
with the aim of enhancing and expanding printer business. As a result, Hitachi
PRS becomes a wholly-owned subsidiary of the Company and changed its name to
Ricoh Printing Systems, Ltd. ("RPS")
RPS has 890 employees (Group 2,250) as of October 1, 2004, and conducts business
on printers and related equipment, software development, product development,
design, production and marketing.
22