FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
REPORT OF FOREIGN PRIVATE ISSUER
CONSOLIDATED FINANCIAL RESULTS
FOR THE SIX-MONTH PERIOD ENDED SEPTEMBER 30, 2002
For the six-month ended September 30, 2002
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of September 30, 2002
Commission File Number ___________________
MITSUI & CO., LTD.
------------------
(Translation of registrant's name into English)
2-1, OHTEMACHI 1-CHOME CHIYODA-KU, TOKYO 100-0004 JAPAN
-------------------------------------------------------
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports
under cover of 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): ____
Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a
Form 6-K if submitted solely to provide an attached annual report to security
holders.
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): ____
Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a
Form 6-K if submitted to furnish a report or other document that the registrant
foreign private issuer must furnish and make public under the laws of the
jurisdiction in which the registrant is incorporated, domiciled or legally
organized (the registrant's "home country"), or under the rules of the home
country exchange on which the registrant's securities are traded, as long as the
report or other document is not a press release, is not required to be and has
not been distributed to the registrant's security holders, and, if discussing a
material event, has already been the subject of a Form 6-K submission or other
Commission filing on EDGAR.
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- _______
SIGNATURES
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.
Date: November 13, 2002
MITSUI & CO., LTD.
By: /s/ Tasuku Kondo
___________________________
Name: Tasuku Kondo
Title: Executive Director
Senior Executive Managing Officer
Chief Financial Officer
CONSOLIDATED FINANCIAL RESULTS FOR THE SIX-MONTH PERIOD ENDED
SEPTEMBER 30, 2002
(Accounting Principles Generally Accepted in the United States of America)
Mitsui & Co., Ltd. and subsidiaries
(Web Site : http://www.mitsui.co.jp)
President and Chief Executive Officer, Shoei Utsuda
Investor Relations Contacts : Yuji Takagi, General Manager, Corporate
Communications Division TEL (03) 3285 - 7533
1. Consolidated financial results for the six-month period ended September 30,
2002 (from April 1, 2002 to September 30, 2002)
(1) Consolidated operating results information
INCOME FROM CONTINUING
OPERATIONS BEFORE INCOME
TOTAL TRADING TAXES, MINORITY INTERESTS
TRANSACTIONS AND EQUITY IN EARNINGS
------------------------------------ ---------------------------------------
MILLIONS OF YEN (%) MILLIONS OF YEN (%)
--------------- ----- --------------- ------
September 30, 2002 6,243,676 (1.5) 30,879 (30.2)
September 30, 2001 6,338,966 (4.8) 44,240 (12.8)
---------- ---- ------ -----
Year ended March 31, 2002 12,644,754 63,253
---------- ---- ------ -----
NET INCOME PER NET INCOME PER
NET INCOME SHARE, BASIC SHARE, DILUTED
-------------------------- -------------- --------------
MILLIONS OF YEN (%) YEN YEN
--------------- ------- ----- -----
September 30, 2002 24,789 5.9 15.66 14.73
September 30, 2001 23,418 (2.7) 14.79 13.92
------ ----- ----- -----
Year ended March 31, 2002 55,371 34.97 32.85
------ ----- ----- -----
Notes:
1. Equity in earnings of associated companies - net for the six-month periods
ended September 30, 2002 and 2001, and for the fiscal year ended March 31, 2002
were Yen 11,209 million, Yen 3,586 million and Yen 23,783 million, respectively.
2. Average number of outstanding shares during the six-month periods ended
September 30, 2002 and 2001, and for the fiscal year ended March 31, 2002 were
1,582,971,930, 1,583,674,837, and 1,583,427,407 respectively.
3. Change in accounting principles applied: No
4. Percentage figures for Total trading transactions, Income from continuing
operations before income taxes, minority interests and equity in earnings, and
Net income for the six-month period represent changes from the corresponding
six-month period of the previous year.
5. Parentheses represent negative figures or decreases.
6. Effective April 1, 2002, Mitsui & Co., Ltd. and subsidiaries (the
"companies") adopted SFAS No. 144, "Accounting for the Impairment or Disposal of
Long-Lived Assets." The above-mentioned figures for the six-month period ended
September 30, 2001 and for the fiscal year ended March 31, 2002 have been
reclassified to conform to the current period presentation of the statement of
consolidated income.
(2) Consolidated financial position information
SHAREHOLDERS' SHAREHOLDERS' SHAREHOLDERS'
TOTAL ASSETS EQUITY EQUITY RATIO EQUITY PER SHARE
--------------- --------------- ------------- ----------------
MILLIONS OF YEN MILLIONS OF YEN (%) YEN
--------------- --------------- ------------- ----------------
September 30, 2002 6,397,712 879,634 13.7 555.76
September 30, 2001 6,593,177 843,243 12.8 532.46
--------- ------- ---- ------
Year ended March 31, 2002 6,668,366 914,970 13.7 577.93
--------- ------- ---- ------
Note: Number of outstanding shares at September 30, 2002, September 30, 2001
and March 31, 2002 were 1,582,763,882, 1,583,674,837, and 1,583,179,977
respectively.
-1-
(3) Consolidated cash flows information
NET CASH NET CASH PROVIDED BY NET CASH CASH AND CASH
PROVIDED BY (USED IN) USED IN EQUIVALENTS AT END OF
OPERATING ACTIVITIES INVESTING ACTIVITIES FINANCING ACTIVITIES PERIOD/YEAR
-------------------- -------------------- -------------------- ---------------------
MILLIONS OF YEN MILLIONS OF YEN MILLIONS OF YEN MILLIONS OF YEN
-------------------- -------------------- -------------------- ---------------------
September 30, 2002 73,642 37,966 (14,802) 697,527
September 30, 2001 62,201 (59,333) (140,146) 580,522
------- -------- -------- -------
Year ended March 31, 2002 133,712 (108,212) (126,076) 607,987
------- -------- -------- -------
2. Forecast of consolidated operating results for the fiscal year ending March
31, 2003 (fiscal year from April 1, 2002 to March 31, 2003)
TOTAL TRADING TRANSACTIONS NET INCOME
-------------------------- ---------------
MILLIONS OF YEN MILLIONS OF YEN
-------------------------- ---------------
Fiscal year ending March 31, 2003 13,000,000 65,000
---------- ------
Note: Forecasted basic net income per share for the fiscal year ending
March 31, 2003: Yen 41.07
A CAUTIONARY NOTE ON FORWARD-LOOKING STATEMENTS:
This report contains statements (including figures) regarding Mitsui & Co., Ltd.
("Mitsui")'s views of future developments that are forward-looking in nature and
are not simply reiterations of historical facts. These statements are presented
to inform stakeholders of the views of Mitsui's management but should not be
relied on solely in making investment and other decisions. You should be aware
that a number of important risk factors could lead to outcomes that differ
materially from those presented in such forward-looking statements. These
include, but are not limited to, (i) change in economic conditions that may lead
to unforeseen developments in markets for products handled by Mitsui, (ii)
fluctuations in currency exchange rates that may cause unexpected deterioration
in the value of transactions, (iii) adverse political developments that may
create unavoidable delays or postponement of transactions and projects, (iv)
changes in laws, regulations, or policies in any of the countries where Mitsui
conducts its operations that may affect Mitsui's ability to fulfill its
commitments, and (v) significant changes in the competitive environment. In the
course of its operations, Mitsui adopts measures to control these and other
types of risks, but this does not constitute a guarantee that such measures will
be effective.
-2-
STATEMENTS OF CONSOLIDATED INCOME
(Millions of Yen)
COMPARISON WITH
PREVIOUS PERIOD
SIX-MONTH PERIOD SIX-MONTH PERIOD ------------------------
ENDED ENDED INCREASE/ PROPORTION
SEPTEMBER 30, 2002 SEPTEMBER 30, 2001 (DECREASE) (%)
------------------ ------------------ ---------- ----------
TOTAL TRADING TRANSACTIONS 6,243,676 6,338,966 (95,290) (1.5)
--------- --------- ------- ------
REVENUE -- GROSS TRADING PROFIT 275,238 270,225 5,013 1.9
(Revenue -- Gross Trading Profit Ratio) (%) (4.41) (4.26)
--------- --------- -------
EXPENSES AND OTHER:
Selling, general and administrative 221,757 221,925 (168)
Provision for doubtful receivables 6,291 4,167 2,124
Interest expense, net of interest income 3,347 8,000 (4,653)
Dividend income (10,161) (10,798) 637
Gain on sales of securities -- net (8,816) (20,488) 11,672
Loss on the write-down of securities 10,680 23,137 (12,457)
Loss on disposal or sale of property and
equipment -- net 993 1,142 (149)
Impairment loss of long-lived assets 16,480 125 16,355
Other expense -- net 3,788 (1,225) 5,013
------- ------- -------
Total 244,359 225,985 18,374
------- ------- ------- ------
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME
TAXES, MINORITY INTERESTS AND EQUITY IN EARNINGS 30,879 44,240 (13,361) (30.2)
------- ------- ------- ------
INCOME TAXES:
Current 22,479 18,097 4,382
Deferred (8,495) 4,479 (12,974)
------- ------- -------
Total Income Taxes 13,984 22,576 (8,592)
------- ------- -------
INCOME FROM CONTINUING OPERATIONS BEFORE MINORITY
INTERESTS AND EQUITY IN EARNINGS 16,895 21,664 (4,769) (22.0)
MINORITY INTERESTS IN EARNINGS OF SUBSIDIARIES (2,250) (241) (2,009)
EQUITY IN EARNINGS OF ASSOCIATED COMPANIES -- NET
(AFTER INCOME TAX EFFECT) 11,209 3,586 7,623
------- ------- ------- ------
INCOME FROM CONTINUING OPERATIONS 25,854 25,009 845 3.4
------- ------- ------- ------
LOSS FROM DISCONTINUED OPERATIONS -- NET
(AFTER INCOME TAX EFFECT) (1,065) (1,591) 526
------- ------- ------- ------
NET INCOME 24,789 23,418 1,371 5.9
------- ------- ------- ------
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CONSOLIDATED BALANCE SHEETS
(Millions of Yen)
ASSETS
SEPTEMBER 30, MARCH 31, INCREASE/
2002 2002 (DECREASE)
------------- --------- ----------
CURRENT ASSETS:
Cash and cash equivalents 697,527 607,987 89,540
Time deposits 34,059 78,211 (44,152)
Marketable securities 91,341 102,664 (11,323)
Trade receivables:
Notes and loans, less unearned interest income 453,741 532,708 (78,967)
Accounts 1,464,460 1,560,041 (95,581)
Associated companies 184,321 152,537 31,784
Allowance for doubtful receivables (19,401) (20,625) 1,224
Inventories 472,547 485,147 (12,600)
Advance payments to suppliers 77,199 66,785 10,414
Deferred tax assets -- current 37,867 31,120 6,747
Other current assets 182,864 187,182 (4,318)
--------- --------- --------
Total current assets 3,676,525 3,783,757 (107,232)
--------- --------- --------
INVESTMENTS AND NON-CURRENT RECEIVABLES:
Investments in and advances to associated companies 503,999 459,797 44,202
Other investments 707,241 804,983 (97,742)
Non-current trade receivables and other receivables,
less unearned interest income 659,970 742,194 (82,224)
Allowance for doubtful receivables (149,244) (139,478) (9,766)
Property leased to others -- at cost, less
accumulated depreciation 209,103 240,590 (31,487)
--------- --------- --------
Total investments and non-current receivables 1,931,069 2,108,086 (177,017)
--------- --------- --------
PROPERTY AND EQUIPMENT -- AT COST:
Land, land improvements and timberlands 230,536 230,577 (41)
Buildings, including leasehold improvements 330,604 334,445 (3,841)
Equipment and fixtures 331,399 330,426 973
Ships 60,367 61,387 (1,020)
Projects in progress 40,612 35,791 4,821
--------- --------- --------
Total 993,518 992,626 892
Accumulated depreciation (381,984) (377,501) (4,483)
--------- --------- --------
Net property and equipment 611,534 615,125 (3,591)
--------- --------- --------
INTANGIBLE ASSETS, LESS ACCUMULATED AMORTIZATION 56,964 45,155 11,809
--------- --------- --------
DEFERRED TAX ASSETS -- NON-CURRENT 26,888 24,668 2,220
--------- --------- --------
OTHER ASSETS 94,732 91,575 3,157
--------- --------- --------
TOTAL 6,397,712 6,668,366 (270,654)
--------- --------- --------
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(Millions of Yen)
Liabilities and Shareholders' Equity
SEPTEMBER 30, MARCH 31, INCREASE/
2002 2002 (DECREASE)
------------- --------- ----------
CURRENT LIABILITIES:
Short-term loans 541,061 567,413 (26,352)
Current maturities of long-term debt 433,215 454,787 (21,572)
Trade payables:
Notes and acceptances 131,681 179,129 (47,448)
Accounts 1,342,158 1,407,512 (65,354)
Associated companies 71,648 68,926 2,722
Accrued expenses:
Income taxes 20,260 18,588 1,672
Interest 26,155 27,004 (849)
Other 40,525 41,735 (1,210)
Advances from customers 84,759 79,387 5,372
Other current liabilities 125,736 142,195 (16,459)
Total current liabilities 2,817,198 2,986,676 (169,478)
--------- --------- --------
LONG-TERM DEBT, LESS CURRENT MATURITIES 2,571,626 2,619,867 (48,241)
--------- --------- --------
ACCRUED PENSION COSTS AND LIABILITY FOR SEVERANCE 38,591 41,561 (2,970)
INDEMNITIES
--------- --------- --------
DEFERRED TAX LIABILITIES -- NON-CURRENT 27,222 47,093 (19,871)
--------- --------- --------
MINORITY INTERESTS 63,441 58,199 5,242
--------- --------- --------
SHAREHOLDERS' EQUITY:
Common stock 192,487 192,487 --
Capital surplus 287,756 287,756 --
Retained earnings:
Appropriated for legal reserve 36,235 35,873 362
Unappropriated 494,168 476,074 18,094
Accumulated other comprehensive income (loss):
Unrealized holding gains and losses on
available-for-sale securities 26,295 44,246 (17,951)
Foreign currency translation adjustments (154,355) (118,669) (35,686)
Minimum pension liability adjustment 339 (373) 712
Net unrealized gains and losses on derivatives (2,683) (2,122) (561)
--------- --------- --------
Total accumulated other comprehensive loss (130,404) (76,918) (53,486)
--------- --------- --------
Treasury stock, at cost (608) (302) (306)
--------- --------- --------
Total shareholders' equity 879,634 914,970 (35,336)
--------- --------- --------
TOTAL 6,397,712 6,668,366 (270,654)
--------- --------- --------
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STATEMENTS OF CONSOLIDATED SHAREHOLDERS' EQUITY
(Millions of Yen)
SIX-MONTH
PERIOD ENDED YEAR ENDED
SEPTEMBER 30, 2002 MARCH 31, 2002
------------------ --------------
COMMON STOCK:
Balance at beginning of year 192,487 192,487
------- -------
Balance at end of period 192,487 192,487
======= =======
CAPITAL SURPLUS:
Balance at beginning of year 287,756 287,756
------- -------
Balance at end of period 287,756 287,756
======= =======
RETAINED EARNINGS:
APPROPRIATED FOR LEGAL RESERVE:
Balance at beginning of year 35,873 34,341
Transfer from unappropriated retained earnings 362 1,532
------- -------
Balance at end of period 36,235 35,873
====== ======
UNAPPROPRIATED:
Balance at beginning of year 476,074 437,548
Net income 24,789 55,371
Cash dividends paid for period:
(dividend paid per share:
six-month period ended September 30, 2002: Yen 4.0
year ended March 31, 2002: Yen 8.0) (6,333) (12,669)
Transfer to retained earnings appropriated for legal
reserve (362) (1,532)
Effect of change in fiscal year-end of certain
subsidiaries -- (2,644)
------- -------
Balance at end of period 494,168 476,074
======= =======
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
(AFTER INCOME TAX EFFECT):
Balance at beginning of year (76,918) (117,705)
Unrealized holding gains and losses on
available-for-sale securities (17,951) (51,384)
Foreign currency translation adjustments (35,686) 69,057
Minimum pension liability adjustment 712 24,514
Net unrealized gains and losses on derivatives (561) (2,950)
Effect of change in fiscal year-end of certain subsidiaries -- 1,550
------- -------
Balance at end of period (130,404) (76,918)
======== =======
TREASURY STOCK, AT COST
Balance at beginning of year (302) --
Purchase of treasury stock (306) (302)
------- -------
Balance at end of period (608) (302)
------- -------
NOTE: Appropriations of retained earnings are reflected in the financial
statements for the following year upon shareholders' approval.
-6-
(Millions of Yen)
SIX-MONTH
PERIOD ENDED YEAR ENDED
SEPTEMBER 30, 2002 MARCH 31, 2002
------------------ --------------
SUMMARY OF CHANGES IN EQUITY FROM NONOWNER SOURCES
(COMPREHENSIVE INCOME (LOSS)):
Net income 24,789 55,371
------ ------
Other comprehensive income (loss)
(after income tax effect):
Unrealized holding gains and losses on
available-for-sale securities (17,951) (51,384)
Foreign currency translation adjustments (35,686) 69,057
Minimum pension liability adjustment 712 24,514
Net unrealized gains and losses on derivatives (561) (2,950)
------ ------
Changes in equity from nonowner sources (28,697) 94,608
------- ------
Note: Changes in equity from nonowner sources ("comprehensive income
(loss)") for the fiscal year ended March 31, 2002, including the
effect of a change in fiscal year-end of certain subsidiaries, was Yen
93,514 million. The difference between the amount and comprehensive
income stated in the above table consisted of a charge to retained
earnings of Yen 2,644 million and a credit to accumulated other
comprehensive income of Yen 1,550 million to record the effect of a
change in fiscal year-end of certain subsidiaries.
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STATEMENTS OF CONSOLIDATED CASH FLOWS
(Millions of Yen)
SIX-MONTH SIX-MONTH
PERIOD ENDED PERIOD ENDED
SEPTEMBER 30, 2002 SEPTEMBER 30, 2001
------------------ ------------------
OPERATING ACTIVITIES:
Net income 24,789 23,418
Adjustments to reconcile net income to net cash provided by operating activities:
Loss from discontinued operations - net 1,065 1,591
Depreciation and amortization 27,409 27,232
Provision for doubtful receivables 6,291 4,167
Equity in earnings of associated companies, less dividends received (5,285) (1,063)
Deferred income taxes (8,495) 4,479
Gain on sales of securities - net (8,816) (20,488)
Loss on the write-down of securities 10,680 23,137
Loss on disposal or sale of property and equipment - net 993 1,142
Impairment loss of long-lived assets 16,480 125
Decrease in trade receivables 106,995 129,751
(Increase) decrease in inventories (4,230) 26,792
Decrease in trade payables (98,162) (150,224)
Net change in accrued pension costs and liability for severance
indemnities (3,518) 1,861
Other - net 7,446 (9,719)
------ ------
Net cash provided by operating activities 73,642 62,201
------ ------
INVESTING ACTIVITIES:
Net decrease (increase) in time deposits 43,842 (40,066)
Investments in and advances to associated companies (28,817) (17,825)
Collection of advances to associated companies 2,913 13,835
Acquisition of other investments (110,908) (56,087)
Proceeds from sale of other investments 130,571 44,688
Increase in long-term loan receivables (31,512) (19,768)
Collection of long-term loan receivables 39,805 32,148
Additions to property leased to others and property and equipment (58,001) (41,303)
Proceeds from sale of property leased to others and property and equipment 50,073 25,045
------ ------
Net cash provided by (used in) investing activities 37,966 (59,333)
------ -------
FINANCING ACTIVITIES:
Net decrease in short-term borrowings (9,595) (115,638)
Proceeds from long-term debt 290,147 246,606
Repayment of long-term debt (289,020) (264,779)
Payment of cash dividends (6,334) (6,335)
------ ------
Net cash used in financing activities (14,802) (140,146)
------- --------
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS (7,266) 12,469
------ ------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 89,540 (124,809)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 607,987 705,331
------- -------
CASH AND CASH EQUIVALENTS AT END OF PERIOD 697,527 580,522
------- -------
Effective April 1, 2002, the companies adopted SFAS No.144. The above-mentioned
figures for the Six-month period ended September 30, 2001 have been reclassified
to conform to the current period presentation of the statement of consolidated
cash flows.
-8-
Supplemental Information:
(Millions of Yen)
SIX-MONTH PERIOD ENDED SIX-MONTH PERIOD ENDED
SEPTEMBER 30, 2002 SEPTEMBER 30, 2001
---------------------- ----------------------
CASH PAID DURING THE PERIOD FOR:
Interest 27,442 46,260
Income taxes 20,038 36,522
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Exchange of shares in connection with a business combination of investees
(EITF91-5):
Fair market value of shares received 3,371 33,748
Cost of shares surrendered 1,210 17,589
------ ------
-9-
BASIS OF FINANCIAL STATEMENTS AND SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES
I. BASIS OF FINANCIAL STATEMENTS
The accompanying consolidated financial statements of Mitsui & Co.,
Ltd. (the "Company") and its subsidiaries (collectively, the
"companies") have been prepared in accordance with accounting principles
generally accepted in the United States of America ("U.S.GAAP"). The
presentation of certain prior year information has been reclassified to conform
to the current period presentation.
II. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(1) Inventories
Inventories, consisting mainly of commodities and materials for resale, are
stated at the lower of cost, principally on the specific-identification basis,
or market.
(2) Marketable securities and investments
The companies classify debt and marketable equity securities, at acquisition,
into one of three categories: held-to-maturity, available-for-sale or trading
under provisions of Statement of Financial Accounting Standards ("SFAS") No.
115.
Trading securities are carried at fair value and unrealized holding gains and
losses are included in net income.
Debt securities are classified as held-to-maturity and measured at amortized
cost in the Consolidated Balance Sheets only if the companies have the positive
intent and ability to hold those securities to maturity. Premium and discount
amortized in the period are included in interest income.
Debt and marketable equity securities other than those classified as trading or
held-to-maturity securities are classified as available-for-sale securities and
carried at fair value with such unrealized holding gains and losses reported as
"Unrealized holding gains and losses on available-for-sale securities" in the
Shareholders' Equity after income tax effects.
(3) Depreciation
Depreciation of property and equipment (including property leased to others) is
computed principally under the declining-balance method for assets located in
Japan and under the straight-line method for assets located outside Japan, using
rates based upon the estimated useful lives of the related property.
(4) Pension and severance indemnities plans
The companies have pension plans and/or severance indemnities plans covering
substantially all employees other than directors. The costs of the pension plans
and severance indemnities plans are accrued based on amounts determined using
actuarial methods.
(5) Derivative instruments and hedging activities
All derivative instruments are recognized and measured at fair value as either
assets or liabilities and changes in the fair value are currently recognized in
earnings or reported as "Net unrealized gains and losses on delivatives" in the
Shareholders' Equity after income tax effects, depending on the intended use of
the derivative instruments and its resulting hedge designation.
III. NEW ACCOUNTING STANDARDS
(1) Business combinations
Effective April 1, 2002, the companies fully adopted SFAS No. 141, "Business
Combinations." The cumulative effect of a change in accounting principle on the
write-off of any unamortized deferred credit related to an excess of fair value
of acquired net assets over cost arising from business combinations for which
the acquisition date was before July, 1, 2001 and investments accounted for by
the equity method acquired before July 1, 2001 was immaterial.
-10-
(2) Goodwill and Other Intangible Assets
Effective April 1, 2002, the companies adopted SFAS No. 142,"Goodwill and Other
Intangible Assets." SFAS No. 142 requires that goodwill no longer be amortized
but instead tested for impairment at least annually and that identifiable
intangible assets with a finite useful life be amortized over their respective
estimated useful lives and reviewed for impairment in accordance with SFAS No.
144. Any identifiable intangible asset determined to have an indefinite useful
life is not amortized but, instead is tested for impairment in accordance with
SFAS No. 142 until its useful life is determined to be no longer indefinite.
The companies completed the transitional impairment test for goodwill and
identifiable intangible assets determined to have an indefinite useful life at
April 1, 2002 and determined that the fair value of these assets was in excess
of the carrying amount.
(3) Impairment or disposal of long-lived assets
Effective April 1, 2002, the companies adopted SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets." SFAS No. 144 superseded SFAS No.
121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed of," and the accounting and reporting provisions of APB
Opinion No. 30, "Reporting the Results of Operations - Reporting the Effects of
Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently
Occurring Events and Transactions," related to the disposal of segments of a
business. This statement creates one accounting model, based on the framework
established in SFAS No. 121, to be applied to all long-lived assets, including
discontinued operations and, at the same time, broadens the presentation of
discontinued operations in the income statement to include a component of an
entity (rather than a segment of a business). The effect of the adoption of this
statement on the companies' financial position and results of operations was
immaterial. However, upon the adoption of SFAS No. 144, the companies now report
the results of the discontinued operations (including gain or loss related to
subsidiaries that either has been disposed of or is classified as held for
sale), less applicable income taxes (benefit), as a separate line item in the
Statements of Consolidated Income under "Loss from Discontinued Operations -
Net." The figures of the Statements of Consolidated Income and the Statements of
Consolidated Cash Flows in the previous year have been reclassified to conform
to the current period presentation.
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NET INCOME PER SHARE
The following is a reconciliation of basic net income per share to diluted net
income per share for the six-month periods ended September 30, 2002 and 2001:
Six-month period ended September 30, 2002 (from April 1, 2002 to September 30,
2002)
NET INCOME SHARES
(NUMERATOR) (DENOMINATOR) PER SHARE AMOUNT
--------------- ------------- ----------------
MILLIONS OF YEN IN THOUSANDS YEN
--------------- ------------- ----------------
BASIC NET INCOME PER SHARE:
Net income available to common shareholders 24,789 1,582,972 15.66
EFFECT OF DILUTIVE SECURITIES:
1.5% convertible bonds due 2003 75 19,266
1.05% convertible bonds due 2009 291 105,319
------ -------
DILUTED NET INCOME PER SHARE:
Net income available to common shareholders after effect
of dilutive securities 25,155 1,707,557 14.73
------ --------- -----
Six-month period ended September 30, 2001 (from April 1, 2001 to September 30,
2001)
NET INCOME SHARES
(NUMERATOR) (DENOMINATOR) PER SHARE AMOUNT
--------------- ------------- ----------------
MILLIONS OF YEN IN THOUSANDS YEN
--------------- ------------- ----------------
BASIC NET INCOME PER SHARE:
Net income available to common shareholders 23,418 1,583,675 14.79
EFFECT OF DILUTIVE SECURITIES:
1.5% convertible bonds due 2003 75 19,266
1.05% convertible bonds due 2009 291 105,319
------- ---------
DILUTED NET INCOME PER SHARE:
Net income available to common shareholders after effect
of dilutive securities 23,784 1,708,260 13.92
------- --------- -----
-12-
SEGMENT INFORMATION
1. Operating Segment Information
Six-month period ended September 30, 2002 (from April 1, 2002 to September 30,
2002) (Millions of Yen)
MACHINERY, CONSUMER DOMESTIC
METAL PRODUCTS ELECTRONICS & PRODUCTS BRANCHES
& MINERALS INFORMATION CHEMICAL ENERGY & SERVICES AND OFFICES
-------------- ------------- -------- ---------- ---------- -----------
Total Trading Transactions:
External customers 805,633 1,027,679 523,214 1,261,258 1,021,135 738,730
Intersegment 127,526 89,459 152,891 32,625 63,507 117,942
------- --------- ------- --------- --------- -------
Total 933,159 1,117,138 676,105 1,293,883 1,084,642 856,672
------- --------- ------- --------- --------- -------
Revenue-Gross Trading Profit 34,458 54,404 27,933 27,364 50,439 20,849
------- --------- ------- --------- --------- -------
Operating Income (Loss) 12,451 518 6,003 13,809 9,799 2,095
------- --------- ------- --------- --------- -------
Net Income (Loss) 7,239 (8,723) (1,590) 13,144 4,222 3,510
------- --------- ------- --------- --------- -------
Total Assets at September 30, 2002 904,886 1,308,144 451,808 455,210 821,667 485,830
------- --------- ------- --------- --------- -------
OTHER CORPORATE AND CONSOLIDATED
AMERICAS EUROPE OVERSEAS AREAS ELIMINATIONS TOTAL
-------- -------- -------------- ------------- ------------
Total Trading Transactions:
External customers 370,294 179,101 292,482 24,150 6,243,676
Intersegment 233,522 101,824 389,248 (1,308,544) -
------- ------- ------- ----------- ---------
Total 603,816 280,925 681,730 (1,284,394) 6,243,676
------- ------- ------- ----------- ---------
Revenue-Gross Trading Profit 22,342 11,235 11,605 14,609 275,238
------- ------- ------- ----------- ---------
Operating Income (Loss) 5,562 2,309 (1,116) (4,240) 47,190
------- ------- ------- ----------- ---------
Net Income (Loss) 2,351 1,371 3,123 142 24,789
------- ------- ------- ----------- ---------
Total Assets at September 30, 2002 417,393 260,422 233,592 1,058,760 6,397,712
------- ------- ------- ----------- ---------
Six-month period ended September 30, 2001 (from April 1, 2001 to September 30,
2001) (Millions of Yen)
MACHINERY, CONSUMER DOMESTIC
METAL PRODUCTS ELECTRONICS & PRODUCTS BRANCHES
& MINERALS INFORMATION CHEMICAL ENERGY & SERVICES AND OFFICES
-------------- ------------- --------- --------- ----------- -----------
Total Trading Transactions:
External customers 747,623 1,164,029 522,778 1,241,560 956,873 819,353
Intersegment 125,287 75,647 134,336 46,102 72,301 145,742
------- --------- ------- --------- --------- -------
Total 872,910 1,239,676 657,114 1,287,662 1,029,174 965,095
------- --------- ------- --------- --------- -------
Revenue-Gross Trading Profit 33,784 54,015 27,974 28,047 49,833 24,006
------- --------- ------- --------- --------- -------
Operating Income (Loss) 10,147 6,310 6,696 10,885 (2,058) 4,355
------- --------- ------- --------- --------- -------
Net Income (Loss) 3,473 2,441 (535) 16,406 (977) 2,880
------- --------- ------- --------- --------- -------
Total Assets at March 31, 2002 935,835 1,419,375 511,248 459,226 863,005 538,853
------- --------- ------- --------- --------- -------
OTHER CORPORATE AND CONSOLIDATED
AMERICAS EUROPE OVERSEAS AREA ELIMINATIONS TOTAL
-------- --------- ------------- ------------- ------------
Total Trading Transactions:
External customers 365,205 228,832 273,495 19,218 6,338,966
Intersegment 257,849 83,244 417,389 (1,357,897) -
------- ------- ------- ----------- ---------
Total 623,054 312,076 690,884 (1,338,679) 6,338,966
------- ------- ------- ----------- ---------
Revenue-Gross Trading Profit 22,666 9,358 10,261 10,281 270,225
------- ------- ------- ----------- ---------
Operating Income (Loss) 5,501 1,742 (2,502) 3,057 44,133
------- ------- ------- ----------- ---------
Net Income (Loss) 3,005 1,297 2,385 (6,957) 23,418
------- ------- ------- ----------- ---------
Total Assets at March 31, 2002 400,387 232,656 241,271 1,066,510 6,668,366
------- ------- ------- ----------- ---------
Notes: 1. Based on the change in new management organization, such as
introduction of an operating group system from April 2002,
"Electronics & Information" is combined with "Machinery," further
"Transportation Logistics," which was included in "Consumer Products &
Services" before, is included in "Corporate and Eliminations" from the
six-month period ended September 30, 2002. The operating segment
information for the six-month period ended September 30, 2001 has been
restated to conform to the presentation for the six-month period ended
September 30, 2002. "Electronics & Information" included in
"Machinery, Electronics & Information" for the six-month period ended
September 30, 2002 is as follows:
Total Trading Transactions 213,894
Revenue-Gross Trading Profit 21,524
Operating Income 781
Net Income 665
Total Assets 263,295
2. Effective April 1, 2002, the companies adopted SFAS No.144. The
figures of "Consolidated Total" for the six-month period ended
September 30, 2001 have been reclassified to conform to the current
period presentation. The reclassifications to "Loss from Discontinued
Operations-Net (After Income Tax Effect)" are included in "Corporate
and Eliminations."
3. Net loss of "Corporate and Eliminations" for the six-month period
ended September 30, 2001 included Yen 11,964 million in losses (after
income tax effect) on the write-down of marketable securities and Yen
9,375 million in gain (after income tax effect) arising from a
nonmonetary exchange of shares in connection with a business
combination of certain financial institutions.
4. Total assets of "Corporate and Eliminations" at September 30, 2002 and
March 31, 2002 include corporate assets, consisting primarily of cash
and cash equivalents and time deposits maintained with regard to
corporate finance activities and assets of certain subsidiaries
operating with corporate departments.
5. Transfers between operating segments are made at cost plus a markup.
6. Operating Income (Loss) reflects the companies' a) Revenue-Gross
Trading Profit, b) Selling, general and administrative expenses, and
c) Provision for doubtful receivables.
-13-
2.GEOGRAPHIC AREA SEGMENT INFORMATION
Six-month period ended September 30, 2002 (from April 1, 2002 to September 30,
2002) (Millions of Yen)
NORTH OTHER
JAPAN AMERICA EUROPE ASIA OCEANIA AREAS ELIMINATIONS CONSOLIDATED
--------- ------- ------- ------- -------- ------- ------------ ------------
Total trading transactions:
Outside 4,414,420 438,964 464,393 801,111 38,697 86,091 -- 6,243,676
Interarea 293,943 169,233 117,002 164,857 179,520 133,430 (1,057,985) --
--------- ------- ------- ------- ------- ------- ---------- ---------
Total 4,708,363 608,197 581,395 965,968 218,217 219,521 (1,057,985) 6,243,676
--------- ------- ------- ------- ------- ------- ---------- ---------
Operating income 11,846 9,529 4,876 2,732 12,677 4,624 906 47,190
--------- ------- ------- ------- ------- ------- ---------- ---------
Identifiable assets
at September 30, 2002 5,226,476 911,866 536,663 368,855 216,157 243,350 (1,609,654) 5,893,713
--------- ------- ------- ------- ------- ------- ---------- ---------
Investments in and advances
to associated companies 503,999
---------
Total assets
at September 30, 2002 6,397,712
---------
Six-month period ended September 30, 2001 (from April 1, 2001 to September 30,
2001) (Millions of Yen)
NORTH OTHER
JAPAN AMERICA EUROPE ASIA OCEANIA AREAS ELIMINATIONS CONSOLIDATED
--------- ------- ------- ------- -------- ------- ------------ ------------
Total trading transactions:
Outside 4,598,715 408,429 624,640 602,903 35,493 68,786 -- 6,338,966
Interarea 290,373 189,489 86,101 134,305 195,050 141,958 (1,037,276) --
--------- ------- ------- ------- ------- ------- ---------- ---------
Total 4,889,088 597,918 710,741 737,208 230,543 210,744 (1,037,276) 6,338,966
--------- ------- ------- ------- ------- ------- ---------- ---------
Operating income 18,179 7,267 3,503 3,510 10,831 239 604 44,133
--------- ------- ------- ------- ------- ------- ---------- ---------
Identifiable assets
at March 31, 2002 5,454,683 903,556 557,072 382,324 174,495 260,529 (1,524,090) 6,208,569
--------- ------- ------- ------- ------- ------- ---------- ---------
Investments in and advances
to associated companies 459,797
---------
Total assets
at March 31, 2002 6,668,366
---------
NOTES:
1. In addition to the disclosure based on SFAS No.131, "Disclosures about
Segments of an Enterprise and Related Information," the Company
discloses this segment information as supplemental information in
light of the disclosure requirements of the Japanese Securities and
Exchange Law.
2. Effective April 1, 2002, the companies adopted SFAS No.144. The
results of discontinued operations are eliminated from Total trading
transactions and Operating income in each geographic area segment. The
figures in the previous period have been reclassified to conform to
the current period presentation.
3. Other Areas consist principally of Latin America and the Middle East.
4. Transfers between geographic areas are made at cost plus a markup.
5. Operating income reflects the companies' a) revenue-gross trading
profit, b) selling, general and administrative expenses, and c)
provision for doubtful receivables.
-14-
3. TOTAL TRADING TRANSACTIONS TO EXTERNAL CUSTOMERS OUTSIDE JAPAN
Six-month period ended September 30, 2002 (from April 1, 2002 to September 30,
2002) (Millions of Yen)
NORTH
AMERICA EUROPE ASIA OCEANIA OTHER AREAS TOTAL
--------- -------- ---------- ------- ----------- ---------
Total trading transactions to external
customers outside Japan 619,975 502,044 1,210,748 28,678 391,638 2,753,083
------- ------- --------- ------ ------- ---------
Consolidated total 6,243,676
---------
Percentage of total trading
transactions to external customers
outside Japan out of consolidated
total 9.9% 8.0% 19.4% 0.5% 6.3% 44.1%
------- ------- --------- ------ ------- ---------
Six-month period ended September 30, 2001 (from April 1, 2001 to September 30,
2001) (Millions of Yen)
NORTH
AMERICA EUROPE ASIA OCEANIA OTHER AREAS TOTAL
--------- -------- ---------- ------- ----------- ---------
Total trading transactions to external
customers outside Japan 626,452 700,288 961,123 34,444 318,427 2,640,734
--------- ------- --------- ------ ------- ---------
Consolidated total 6,338,966
---------
Percentage of total trading
transactions to external customers
outside Japan out of consolidated
total 9.9% 11.1% 15.2% 0.5% 5.0% 41.7%
--------- ------- --------- ------ ------- ---------
NOTES:
1. In addition to the disclosure based on SFAS No. 131, the Company
discloses this segment information as supplemental information in
light of the disclosure requirements of the Japanese Securities and
Exchange Law.
2. Classification of regions is determined based on geographic proximity.
3. Each part consists primarily of the following countries or areas.
North America : United States, Canada
Europe : United Kingdom, Germany
Asia : China, Thailand
Oceania : Australia
Other Areas : Latin America, the Middle East
4. Total trading transactions to external customers outside Japan
represents exports from Japan and offshore transactions of the
companies.
5. Effective April 1, 2002, the companies adopted SFAS No.144. Total
trading transactions from discontinued operations are eliminated from
Total trading transactions to external customers outside Japan and
Consolidated total. The figures in the previous period have been
reclassified to conform to the current period presentation.
-15-
MARKETABLE SECURITIES
DEBT AND EQUITY SECURITIES
At September 30, 2002 and at March 31, 2002, the aggregate cost, fair value and
unrealized holding gains-net on available-for-sale securities and the amortized
cost, fair value and unrealized holding gains-net on held-to-maturity debt
securities were as follows:
September 30, 2002:
(Millions of Yen)
UNREALIZED HOLDING
AGGREGATE COST FAIR VALUE GAINS-NET
-------------- ---------- ------------------
Available-for-sale:
Marketable equity securities 178,290 239,315 61,025
Foreign debentures, commercial paper and other debt
securities 129,936 130,201 265
------- ------- ---
UNREALIZED HOLDING
AGGREGATE COST FAIR VALUE GAINS-NET
-------------- ---------- ------------------
Held-to-maturity debt securities, consisting principally
of foreign debentures 21,007 20,914 (93)
------ ------ ---
March 31, 2002:
(Millions of Yen)
UNREALIZED HOLDING
AGGREGATE COST FAIR VALUE GAINS-NET
-------------- ---------- ------------------
Available-for-sale:
Marketable equity securities 177,835 266,079 88,244
Foreign debentures, commercial paper and other debt
securities 155,639 156,339 700
------- ------- ------
UNREALIZED HOLDING
AGGREGATE COST FAIR VALUE GAINS-NET
-------------- ---------- ------------------
Held-to-maturity debt securities, consisting principally
of foreign debentures 23,356 23,381 25
------ ------ --
16