FORM 6-K
U.S.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
Commission File Number: 1-15238
Supplement For the month of March 2008.
Total number of pages: 48
The exhibit index is located on page 1
NIDEC CORPORATION
(Translation of registrant’s name into English)
338 KuzeTonoshiro-Cho,
Minami-Ku,Kyoto 601-8205 Japan
(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-_____
Information furnished on this form:
EXHIBITS
Exhibit Number
1
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: March 11, 2008 | ||||
NIDEC CORPORATION | ||||
By: /S/ Masahiro Nagayasu | ||||
General Manager, Investor Relations |
2
NEWS RELEASE
NIDEC CORPORATION
New York Stock Exchange symbol: NJ
Stock exchange code (Tokyo, Osaka): 6594
FOR IMMEDIATE RELEASE
Contact: | |
Masahiro Nagayasu | |
General Manager | |
Investor Relations | |
+81-75-935-6140 | |
MASAHIRO_NAGAYASU@notes.nidec.co.jp |
QUARTERLY FINANCIAL STATEMENTS (U.S. GAAP)
(U.S. GAAP) RESULTS FOR THE NINE MONTHS ENDED DECEMBER 31, 2007 (Unaudited)
(FROM APRIL 1, 2007 TO DECEMBER 31, 2007)
CONSOLIDATED
Released on March 11, 2008
3
NIDEC CORPORATION
338 Kuzetonoshiro-cho,
Minami-ku, Kyoto 601-8205 Japan
CONSOLIDATED FINANCIAL RESULTS FOR THE NINE MONTHS ENDED DECEMBER 31, 2007 (U.S. GAAP, unaudited) |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Yen in millions | U.S. dollars in thousands | |||||||||
(except per share amounts) For the three months ended December 31 | ||||||||||
2006 | 2007 | 2007 | ||||||||
Net sales | ¥ 159,304 | ¥ 196,287 | $ 1,719,553 | |||||||
Operating income | 17,031 | 23,074 | 202,138 | |||||||
Income before provision for income taxes | 18,057 | 22,146 | 194,008 | |||||||
Net income | 9,299 | 13,946 | 122,173 | |||||||
Per share data | ||||||||||
Net income | ||||||||||
-Basic | ¥ 64.28 | ¥ 96.22 | $ 0.84 | |||||||
-Diluted | ¥ 62.46 | ¥ 93.62 | �� | $ 0.82 | ||||||
For the nine months ended December 31 | ||||||||||
2006 | 2007 | 2007 | ||||||||
Net sales | ¥ 459,141 | ¥ 558,988 | $ 4,896,960 | |||||||
Operating income | 49,077 | 57,150 | 500,657 | |||||||
Income before provision for income taxes | 50,718 | 53,652 | 470,013 | |||||||
Net income | 30,075 | 34,303 | 300,508 | |||||||
Per share data | ||||||||||
Net income | ||||||||||
-Basic | ¥ 207.92 | ¥ 236.73 | $ 2.07 | |||||||
-Diluted | ¥ 202.04 | ¥ 230.28 | $ 2.02 |
4
CONDENSED CONSOLIDATED BALANCE SHEETS
2007 | ||||||||||
March 31 | December 31 | December 31 | ||||||||
Current assets | ¥ 338,662 | ¥ 372,372 | $ 3,262,129 | |||||||
Investments | 23,999 | 21,046 | 184,371 | |||||||
Property, plant, equipment and others | 299,962 | 307,268 | 2,691,792 | |||||||
Total assets | 662,623 | 700,686 | 6,138,292 | |||||||
Current liabilities | 235,369 | 268,391 | 2,351,213 | |||||||
Long-term liabilities | 55,785 | 29,940 | 262,287 | |||||||
Total liabilities | 291,154 | 298,331 | 2,613,500 | |||||||
Minority interest in consolidated subsidiaries | 66,453 | 70,705 | 619,404 | |||||||
Shareholders’ equity | 305,016 | 331,650 | 2,905,388 | |||||||
Total liabilities and shareholders’ equity | ¥ 662,623 | ¥ 700,686 | $ 6,138,292 |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Yen in millions | U.S. dollars in thousands | |||||||||
For the nine months ended December 31 | ||||||||||
2006 | 2007 | 2007 | ||||||||
Net cash provided by operating activities | ¥ 43,261 | ¥ 57,285 | $ 501,838 | |||||||
Net cash used in investing activities | (45,140 | ) | (32,887 | ) | (288,103 | ) | ||||
Net cash used in financing activities | (14,804 | ) | (22,100 | ) | (193,604 | ) | ||||
Effect of exchange rate changes on cash and cash equivalents | 1,437 | (895 | ) | (7,841 | ) | |||||
Net (decrease) increase in cash and cash equivalents | (15,246 | ) | 1,403 | 12,290 | ||||||
Cash and cash equivalents at beginning of period | 92,079 | 88,784 | 777,784 | |||||||
Cash and cash equivalents at end of period | ¥ 76,833 | ¥ 90,187 | $ 790,074 | |||||||
5
Cautionary Note Regarding Forward-Looking Statements This report contains forward-looking statements that are based on our current expectations, assumptions, estimates and projections about our business, our industry and capital markets around the world. These forward-looking statements are subject to various risks and uncertainties. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as “may,” “will,” “expect,” “anticipate,” “seek”, “estimate,” “plan” or similar words. These statements discuss future expectations, identify strategies, contain projections of results of operations or of our financial condition, or state other forward-looking information. Known and unknown risks, uncertainties and other factors could cause the actual results to differ materially from those contained in any forward-looking statement. We cannot promis e that our expectations expressed in these forward-looking statements will turn out to be correct. Our actual results could be materially different from and worse than our expectations as a result of various factors, including, but not limited to, (i) our ability to design, develop, mass produce and win acceptance of our products, particularly those that use fluid dynamic bearing motor technology, which are offered in highly competitive markets characterized by continual new products introduction and rapid technological development, (ii) general economic conditions in the computer, information technology and related product markets, particularly in the level of consumer spending, (iii) exchange rate fluctuations, particularly between the Japanese yen and the U.S. dollar and other currencies in which we make significant sales or in which our assets and liabilities are denominated, (iv) our ability to acquire and successfully integrate companies or businesses with complementary technologies and product lines, including, for example, the motors and actuators business of Valeo S.A. (France), which we acquired in December 2006, and (v) adverse changes in laws, regulations or economic policies in any of the countries where we have manufacturing operations, especially China. |
As used in this document, references to “we,” ”our” and “us” are to Nidec Corporation and, except as the context otherwise requires, its consolidated subsidiaries; “U.S. dollar” or “$” means the lawful currency of the United States of America, and “yen” or “¥” means the lawful currency of Japan; and “U.S. GAAP” means accounting principles generally accepted in the United States, and “Japanese GAAP” means accounting principles generally accepted in Japan.
6
Results of Operations — Nine Months Ended December 31, 2007 Compared to Nine Months Ended December 31, 2006 (with Focus on Three Months Ended December 31, 2007 Compared to Three Months Ended December 31, 2006)
Net Sales
(Yen in millions) For the three months ended December 31 | ||||||||||||||
2006 | 2007 | Inc/Dec | % | |||||||||||
Net sales: | ||||||||||||||
Small precision motors: | ||||||||||||||
Hard disk drives spindle motors | ¥ 52,593 | ¥ 63,089 | ¥ 10,496 | 20.0 | % | |||||||||
Other small precision brushless DC motors | 19,153 | 24,494 | 5,341 | 27.9 | ||||||||||
Brushless DC fans | 10,054 | 12,592 | 2,538 | 25.2 | ||||||||||
Other small precision motors * | 1,502 | 6,844 | 5,342 | 355.7 | ||||||||||
Sub-total | 83,302 | 107,019 | 23,717 | 28.5 | ||||||||||
Mid-size motors | 11,699 | 23,268 | 11,569 | 98.9 | ||||||||||
Machinery | 19,743 | 18,161 | (1,582 | ) | (8.0 | ) | ||||||||
Electronic and optical components | 37,807 | 40,715 | 2,908 | 7.7 | ||||||||||
Others | 6,753 | 7,124 | 371 | 5.5 | ||||||||||
Consolidated total | ¥ 159,304 | ¥ 196,287 | ¥ 36,983 | 23.2 | % | |||||||||
(Yen in millions) For the nine months ended December 31 | ||||||||||||||
2006 | 2007 | Inc/Dec | % | |||||||||||
Net sales: | ||||||||||||||
Small precision motors: | ||||||||||||||
Hard disk drives spindle motors | ¥ 145,594 | ¥ 171,192 | ¥ 25,598 | 17.6 | % | |||||||||
Other small precision brushless DC motors | 55,901 | 70,103 | 14,202 | 25.4 | ||||||||||
Brushless DC fans | 29,177 | 36,764 | 7,587 | 26.0 | ||||||||||
Other small precision motors * | 5,131 | 17,267 | 12,136 | 236.5 | ||||||||||
Sub-total | 235,803 | 295,326 | 59,523 | 25.2 | ||||||||||
Mid-size motors | 33,984 | 70,941 | 36,957 | 108.7 | ||||||||||
Machinery | 63,473 | 53,130 | (10,343 | ) | (16.3 | ) | ||||||||
Electronic and optical components | 106,321 | 119,822 | 13,501 | 12.7 | ||||||||||
Others | 19,560 | 19,769 | 209 | 1.1 | ||||||||||
Consolidated total | ¥ 459,141 | ¥ 558,988 | ¥ 99,847 | 21.7 | % | |||||||||
*: “Small precision brush DC motors” was changed to “Other small precision motors” from the beginning of this year because the diversity of the products increased.
7
Our net sales increased ¥36,983 million, or 23.2%, from ¥159,304 million for the three months ended December 31, 2006 to ¥196,287 million for the three months ended December 31, 2007. This increase was due mainly to the impact of the newly consolidated subsidiaries and small precision motors, especially hard disk drives spindle motors. Net sales of Fujisoku Corporation, which was consolidated at the beginning of November 2006, is included in “Electronic and optical components”. Nidec Motors & Actuators and its group companies, which were consolidated at the beginning of December 2006, are included in “Mid-size motors”. Brilliant Manufacturing Limited and its subsidiaries, which were consolidated at the beginning of February 2007, are included in “Small precision motors- other precision motors”. Japan Servo Co., Ltd. and its subsidiaries, which were newly consolidated beginning April 2007, are included in “Small precision motors-other small precision brushless DC motors, Brushless DC fans and other precision motors”.
Our net sales increased ¥99,847 million, or 21.7%, from ¥459,141 million for the nine months ended December 31, 2006 to ¥558,988 million for the nine months ended December 31, 2007.
(Small precision motors)
Net sales of small precision motors increased ¥23,717 million, or 28.5%, from ¥83,302 million for the three months ended December 31, 2006 to ¥107,019 million for the three months ended December 31, 2007. Net sales of each product included in the “small precision motors” are as below.
Hard disk drives spindle motors
Net sales of hard disk drives spindle motors increased ¥10,496 million, or 20.0%, from ¥52,593 million for the three months ended December 31, 2006 to ¥63,089 million for the three months ended December 31, 2007. Sales volume of hard disk drives spindle motors increased by 24.1% compared to the same period of the previous fiscal year. This increase was primary due to an increase in net sales of 2.5-inch and 3.5-inch motors. Sales volumes of 2.5-inch and 3.5-inch motors increased by 36.0% and 17.3%, respectively.
Net sales of hard disk drives spindle motors accounted for 33.0 % of total net sales for the three months ended December 31, 2006 and 32.1% of total net sales for the three months ended December 31, 2007.
Net sales of hard disk drives spindle motors increased ¥25,598 million, or 17.6%, from ¥145,594 million for the nine months ended December 31, 2006 to ¥171,192 million for the nine months ended December 31, 2007.
Brushless DC motors
Net sales of other small precision brushless DC motors increased ¥5,341 million, or 27.9%, from ¥19,153 million for the three months ended December 31, 2006 to ¥24,494 million for the three months ended December 31, 2007. Excluding the contribution from newly consolidated companies, net sales of other small precision brushless DC motors increased ¥2,209 million or 11.5%, from ¥19,153 million for the three months ended December 31, 2006 to ¥21,362 million for the three months ended December 31, 2007. This increase was primarily due to an increase in net sales of stepping motors and brushless DC motors for optical disk drives.
8
Net sales of other small precision brushless DC motors accounted for 12.0% of total net sales for the three months ended December 31, 2006 and 12.5% of total net sales for the three months ended December 31, 2007.
Net sales of other small precision brushless DC motors increased ¥14,202 million, or 25.4%, from ¥55,901 million for the nine months ended December 31, 2006 to ¥70,103 million for the nine months ended December 31, 2007.
Brushless DC fans
Net sales of brushless DC fans increased ¥2,538 million, or 25.2%, from ¥10,054 million for the three months ended December 31, 2006 to ¥12,592 million for the three months ended December 31, 2007. This increase was primarily due to an increase in the contribution from newly consolidated companies. Excluding contribution from the newly consolidated companies, net sales of brushless DC fans increased ¥508 million or 5.1%, from ¥10,054 million for the three months ended December 31, 2006 to ¥10,562 million for the three months ended December 31, 2007.
Net sales of brushless DC fans accounted for 6.3% of total net sales for the three months ended December 31, 2006 and 6.4% of total net sales for the three months ended December 31, 2007.
Net sales of brushless DC fans increased ¥7,587 million, or 26.0%, from ¥29,177 million for the nine months ended December 31, 2006 to ¥36,764 million for the nine months ended December 31, 2007.
Other small precision motors
Net sales of other small precision motors increased ¥5,342 million, or 355.7%, from ¥1,502 million for the three months ended December 31, 2006 to ¥6,844 million for the three months ended December 31, 2007. This increase was primarily due to an increase in the contribution from newly consolidated companies. Excluding this contribution, net sales of other small precision motors increased ¥349 million or 23.2%, from ¥1,502 million for the three months ended December 31, 2006 to ¥1,851 million for the three months ended December 31, 2007.
Net sales of other small precision motors accounted for 1.0% of total net sales for the three months ended December 31, 2006 and 3.5% of total net sales for the three months ended December 31, 2007.
Net sales of other small precision motors increased ¥12,136 million, or 236.5%, from ¥5,131 million for the nine months ended December 31, 2006 to ¥17,267 million for the nine months ended December 31, 2007.
(Mid-size motors)
Net sales of mid-size motors increased ¥11,569 million, or 98.9%, from ¥11,699 million for the three months ended December 31, 2006 to ¥23,268 million for the three months ended December 31, 2007. Excluding the contribution from newly consolidated companies, net sales of mid-size motors increased ¥2,779 million or 23.8%, from ¥11,699 million for the three months ended December 31, 2006 to ¥14,478 million for the three months ended December 31, 2007. This increase was primarily due to an increase in net sales of motors for home appliances and power steering systems.
9
Net sales of mid-size motors accounted for 7.4% of our total net sales for the three months ended December 31, 2006 and 11.9% of total net sales for the three months ended December 31, 2007.
Net sales of mid-size motors increased ¥36,957 million, or 108.7%, from ¥33,984 million for the nine months ended December 31, 2006 to ¥70,941 million for the nine months ended December 31, 2007.
(Machinery)
Net sales of machinery decreased ¥1,582 million, or 8.0%, from ¥19,743 million for the three months ended December 31, 2006 to ¥18,161 million for the three months ended December 31, 2007. Net sales of machinery, such as industrial robots, card readers and high-speed pressing machines, decreased due to a lower demand from decreased capital investment by our customers, which offset an increase in net sales of semiconductor manufacturing equipment.
Net sales of machinery accounted for 12.4% of our total net sales for the three months ended December 31, 2006 and 9.3% of total net sales for the three months ended December 31, 2007.
Net sales of machinery decreased ¥10,343 million, or 16.3%, from ¥63,473 million for the nine months ended December 31, 2006 to ¥53,130 million for the nine months ended December 31, 2007.
(Electronic and optical components)
Net sales of electronic and optical components increased ¥2,908 million, or 7.7%, from ¥37,807 million for the three months ended December 31, 2006 to ¥40,715 million for the three months ended December 31, 2007. Excluding the contribution from newly consolidated companies, net sales of electronic and optical components increased ¥2,414 million or 6.6%, from ¥36,679 million for the three months ended December 31, 2006 to ¥39,093 million for the three months ended December 31, 2007. This increase was primarily due to an increase in net sales of electronic components for amusement machines and optical components such as shutters for digital cameras.
Net sales of electronic and optical components accounted for 23.7% of our total net sales for the three months ended December 31, 2006 and 20.7% of total net sales for the three months ended December 31, 2007.
Net sales of electronic and optical components increased ¥13,501 million, or 12.7%, from ¥106,321 million for the nine months ended December 31, 2006 to ¥119,822 million for the nine months ended December 31, 2007.
(Others)
Net sales of other products increased ¥371 million, or 5.5%, from ¥6,753 million for the three months ended December 31, 2006 to ¥7,124 million for the three months ended December 31, 2007. This increase was primarily due to an increase in net sales of automotive parts.
Net sales of other products accounted for 4.2% of total net sales for the three months ended December 31, 2006 and 3.6% of total net sales for the three months ended December 31, 2007.
Net sales of other products increased ¥209 million, or 1.1%, from ¥19,560 million for the nine months ended December 31, 2006 to ¥19,769 million for the nine months ended December 31, 2007.
10
Cost of Products Sold
Our cost of products sold increased ¥31,323 million, or 25.6%, from ¥122,232 million for the three months ended December 31, 2006 to ¥153,555 million for the three months ended December 31, 2007. Excluding the contribution from newly consolidated companies, our cost of products sold increased ¥11,903 million, or 9.8%, from ¥121,275 million for the three months ended December 31, 2006 to ¥133,178 million for the three months ended December 31, 2007. This increase was primarily due to an increase in sales volume, a delay in cost efficiency improvements and the negative impact from changes in exchange rates.
As a percentage of net sales, our cost of products sold increased from 76.7% for the three months ended December 31, 2006 to 78.2% for the three months ended December 31, 2007.
Our cost of products sold increased ¥87,800 million, or 24.9%, from ¥352,307 million for the nine months ended December 31, 2006 to ¥440,107 million for the nine months ended December 31, 2007.
Selling, General and Administrative Expenses
Our selling, general and administrative expenses increased ¥52 million, or 0.4%, from ¥12,095 million for the three months ended December 31, 2006 to ¥12,147 million for the three months ended December 31, 2007. Excluding the contribution from newly consolidated companies, our selling, general and administrative expenses decreased ¥1,337 million, or 11.2%, from ¥11,926 million for the three months ended December 31, 2006 to ¥10,589 million for the three months ended December 31, 2007. This decrease was mainly due to an increase in gains from sale of fixed assets and a decrease in losses on the sale of fixed assets compared to the three months ended December 31, 2006.
As a percentage of net sales, our selling, general and administrative expenses decreased from 7.6% for the three months ended December 31, 2006 to 6.2% for the three months ended December 31, 2007.
Our selling, general and administrative expenses increased ¥4,969 million, or 14.6%, from ¥34,123 million for the nine months ended December 31, 2006 to ¥39,092 million for the nine months ended December 31, 2007.
Research and Development Expenses
Our research and development expenses decreased ¥435 million, or 5.5%, from ¥7,946 million for the three months ended December 31, 2006 to ¥7,511 million for the three months ended December 31, 2007. Excluding the contribution from newly consolidated companies, our research and development expenses decreased ¥1,152 million, or 14.5%, from ¥7,946 million for the three months ended December 31, 2006 to ¥6,794 million for the three months ended December 31, 2007. This decrease was primarily due to a decrease in research and development expenses related to mid-sized motors due to the commencement of mass production.
11
As a percentage of net sales, our research and development expenses decreased from 5.0% for the three months ended December 31, 2006 to 3.8% for the three months ended December 31, 2007.
Our research and development expenses decreased ¥995 million, or 4.2%, from ¥23,634 million for the nine months ended December 31, 2006 to ¥22,639 million for the nine months ended December 31, 2007.
Operating Income
As a result of the foregoing, our operating income increased ¥6,043 million, or 35.5%, from ¥17,031 million for the three months ended December 31, 2006 to ¥23,074 million for the three months ended December 31, 2007.
As a percentage of net sales, our operating income increased from 10.7% for the three months ended December 31, 2006 to 11.8% for the three months ended December 31, 2007.
Our operating income increased ¥8,073 million, or 16.4%, from ¥49,077 million for the nine months ended December 31, 2006 to ¥57,150 million for the nine months ended December 31, 2007.
Other Income (Expense)
We had other income in the amount of ¥1,026 million for the three months ended December 31, 2006, while we incurred other expense in the amount of ¥928 million for the three months ended December 31, 2007. The increased other expense was due to an adverse change in the foreign exchange rate for the three months ended December 31 2007.
We had foreign exchange gain in the amount of ¥1,131 million for the three months ended December 31, 2006, while we incurred foreign exchange losses in the amount of ¥1,026 million for the three months ended December 31, 2007. The Japanese yen/U.S. dollar exchange rate was ¥117.90 per U.S. dollar as of September 30, 2006 and ¥119.11 per U.S. dollar as of December 31, 2006, and the yen appreciated to ¥115.43 per U.S. dollar as of September 30, 2007 and ¥114.15 per U.S. dollar as of December 31, 2007.
We had other income in the amount of ¥1,641 million for the nine months ended December 31, 2006, while we incurred other expense in the amount of ¥3,498 million for the nine months ended December 31, 2007.
Income before Provision for Income Taxes
As a result of the foregoing, our income before provision for income taxes increased ¥4,089 million, or 22.6%, from ¥18,057 million for the three months ended December 31, 2006 to ¥22,146 million for the three months ended December 31, 2007.
12
As a percentage of net sales, our income before provision for income taxes remained unchanged at 11.3% for the three months ended December 31, 2007, compared to the three months ended December 31, 2006.
Our income before provision for income taxes increased ¥2,934 million, or 5.8%, from ¥50,718 million for the nine months ended December 31, 2006 to ¥53,652 million for the nine months ended December 31, 2007.
Provision for Income Taxes
Our provision for income taxes decreased ¥1,026 million, or 14.8%, from ¥6,913 million for the three months ended December 31, 2006 to ¥5,887 million for the three months ended December 31, 2007.
Our provision for income taxes increased ¥90 million, or 0.6%, from ¥14,020 million for the nine months ended December 31, 2006 to ¥14,110 million for the nine months ended December 31, 2007.
The estimated effective income tax rate for the nine months ended December 31, 2007 was lower compared to the corresponding prior period, from 27.6% to 26.3%. The main reason for this decrease was due to the net impact of an increase in valuation allowances and tax benefits in foreign subsidiaries as well as offset by the effect of transfer pricing taxation for the current period. The reason for the increase in valuation allowances was the additional establishment for deferred tax assets of newly acquired subsidiaries due to less ability to realize of future tax benefits, since taxable income in newly acquired subsidiaries decreased during the current period.
Minority Interest in Income of Consolidated Subsidiaries
Our minority interest in income of consolidated subsidiaries increased ¥529 million, or 29.4%, from ¥1,802 million for the three months ended December 31, 2006 to ¥2,331 million for the three months ended December 31, 2007. Excluding the contribution from newly consolidated companies, our minority interest in income of consolidated subsidiaries increased ¥193 million, or 10.7%, from ¥1,802 million for the three months ended December 31, 2006 to ¥1,995 million for the three months ended December 31, 2007. This increase was primarily due to an increase in the income of our group companies, Nidec Tosok and Nidec Copal Electronics, which offset a decrease in the income of the other group company, Nidec Sankyo.
Our minority interest in income of consolidated subsidiaries decreased ¥1,355 million, or 20.6%, from ¥6,587 million for the nine months ended December 31, 2006 to ¥5,232 million for the nine months ended December 31, 2007.
13
Equity in Net Income of Affiliated Companies
We had equity in net income of affiliated companies in the amount of ¥18 million for the three months ended December 31, 2007, while we incurred equity in net loss of affiliated companies in the amount of ¥43 million for the three months ended December 31, 2006.
Our equity in net loss of affiliated companies decreased ¥29 million, or 80.6%, from ¥36 million for the nine months ended December 31, 2006 to ¥7 million for the nine months ended December 31, 2007.
Net Income
As a result of the foregoing, our net income increased ¥4,647 million, or 50.0%, from ¥9,299 million for the three months ended December 31, 2006 to ¥13,946 million for the three months ended December 31, 2007. As a percentage of net sales, our net income increased from 5.8% for the three months ended December 31, 2006 to 7.1% for the three months ended December 31, 2007.
Our net income increased ¥4,228 million, or 14.1%, from ¥30,075 million for the nine months ended December 31, 2006 to ¥34,303 million for the nine months ended December 31, 2007.
14
Segment Information
Based on the applicable criteria set forth in the Statement of Financial Accounting Standards No. 131, “Disclosures about Segments of an Enterprise and Related Information” (“SFAS No. 131”), we have sixteen reportable operating segments on which we report in our consolidated financial statements. These reportable operating segments are legal entities. One of them is Nidec Corporation, while the others are Nidec’s fifteen consolidated subsidiaries: Nidec Electronics (Thailand) Co., Ltd., Nidec (Zhejiang) Corporation, Nidec (Dalian) Limited, Nidec Singapore Pte. Ltd., Nidec (H.K.) Co., Ltd., Nidec Philippines Corporation, Nidec Sankyo Corporation, Nidec Copal Corporation, Nidec Tosok Corporation, Nidec Copal Electronics Corporation, Japan Servo Co., Ltd., Nidec Shibaura Corporation, Nidec-Shimpo Corporation, Nidec Motors & Actuators, and Nidec Nissin Corporation. For the information required by SFAS No. 131, see Note 11 to our consolidated financial statements included in this release.
Nidec acquired all of the voting rights of the Motors & Actuators business of Valeo S.A., France in December 2006, and acquired a majority of the voting rights of Japan Servo Co., Ltd. in April 2007. As the materiality of these segments increased, Nidec Motors & Actuators has been identified as a reportable operating segment since the three months ended June 30, 2007 and Japan Servo has been identified as a reportable operating segment since the six months ended September 30, 2007.
We evaluate our financial performance based on segmental profit and loss, which consists of sales and operating revenues less operating expenses. Segmental profit or loss is determined using the accounting principles in the segment’s country of domicile. Nidec Corporation, Nidec Sankyo Corporation, Nidec Copal Corporation, Nidec Tosok Corporation, Nidec Copal Electronics Corporation, Japan Servo Co., Ltd., Nidec Shibaura Corporation, Nidec-Shimpo Corporation and Nidec Nissin Corporation apply Japanese GAAP. Nidec Electronics (Thailand) Co., Ltd. applies Thai accounting principles. Nidec (Zhejiang) Corporation and Nidec (Dalian) Limited apply Chinese accounting principles. Nidec Singapore Pte. Ltd. applies Singaporean accounting principles. Nidec (H.K.) Co., Ltd. applies Hong Kong accounting principles, and Nidec Philippines Corporation applies Philippine accounting principles. Nidec Motors & Actuators applies mainly International Financial Reporting Standards (“IFRS”). Therefore our segmental data has not been prepared under U.S. GAAP on a basis that is consistent with our consolidated financial statements or on any other single basis that is consistent among segments. While there are several differences between U.S. GAAP and the underlying accounting principles used by the operating segments, the principal differences that affect segmental operating profit or loss are accounting for pension and severance costs, directors’ bonuses and leases. We believe that the monthly segmental information is available on a timely basis and that it is sufficiently accurate at the segment profit and loss level for us to manage our business.
15
The first of the following two tables shows revenues from external customers and other operating segments by reportable operating segment for the three months ended December 31, 2006 and 2007. The second table shows operating profit or loss by reportable operating segment, which includes intersegment revenues, for the three months ended December 31, 2006 and 2007:
Three months ended December 31 | |||||||||
2006 | 2007 | 2007 | |||||||
(Yen in millions and U.S. dollars in thousands) | |||||||||
Nidec | |||||||||
External revenues | ¥ 23,952 | ¥ 23,894 | $ 209,321 | ||||||
Intersegment revenues | 21,770 | 27,887 | 244,301 | ||||||
Sub total | 45,722 | 51,781 | 453,622 | ||||||
Nidec Electronics (Thailand) | |||||||||
External revenues | 18,560 | 27,820 | 243,714 | ||||||
Intersegment revenues | 4,701 | 9,223 | 80,797 | ||||||
Sub total | 23,261 | 37,043 | 324,511 | ||||||
Nidec (Zhejiang) | |||||||||
External revenues | 4,218 | 3,299 | 28,901 | ||||||
Intersegment revenues | 1,266 | 3,149 | 27,587 | ||||||
Sub total | 5,484 | 6,448 | 56,488 | ||||||
Nidec (Dalian) | |||||||||
External revenues | 862 | 1,064 | 9,321 | ||||||
Intersegment revenues | 11,644 | 11,221 | 98,300 | ||||||
Sub total | 12,506 | 12,285 | 107,621 | ||||||
Nidec Singapore | |||||||||
External revenues | 11,509 | 12,581 | 110,215 | ||||||
Intersegment revenues | 242 | 75 | 657 | ||||||
Sub total | 11,751 | 12,656 | 110,872 | ||||||
Nidec (H.K.) | |||||||||
External revenues | 9,424 | 11,076 | 97,030 | ||||||
Intersegment revenues | 1,090 | 1,407 | 12,326 | ||||||
Sub total | 10,514 | 12,483 | 109,356 | ||||||
Nidec Philippines | |||||||||
External revenues | 1,692 | 1,665 | 14,586 | ||||||
Intersegment revenues | 10,751 | 10,909 | 95,567 | ||||||
Sub total | 12,443 | 12,574 | 110,153 | ||||||
Nidec Sankyo | |||||||||
External revenues | 15,110 | 14,561 | 127,560 | ||||||
Intersegment revenues | 3,355 | 3,363 | 29,461 | ||||||
Sub total | 18,465 | 17,924 | 157,021 | ||||||
Nidec Copal | |||||||||
External revenues | 17,014 | 16,364 | 143,355 | ||||||
Intersegment revenues | 1,994 | 1,821 | 15,953 | ||||||
Sub total | 19,008 | 18,185 | 159,308 |
16
Three months ended December 31 | |||||||||
2006 | 2007 | 2007 | |||||||
(Yen in millions and U.S. dollars in thousands) | |||||||||
Nidec Tosok | |||||||||
External revenues | 5,520 | 6,639 | 58,160 | ||||||
Intersegment revenues | 76 | 63 | 552 | ||||||
Sub total | 5,596 | 6,702 | 58,712 | ||||||
Nidec Copal Electronics | |||||||||
External revenues | 4,668 | 6,366 | 55,769 | ||||||
Intersegment revenues | 729 | 1,046 | 9,163 | ||||||
Sub total | 5,397 | 7,412 | 64,932 | ||||||
Japan Servo | |||||||||
External revenues | - | 6,927 | 60,683 | ||||||
Intersegment revenues | - | 936 | 8,200 | ||||||
Sub total | - | 7,863 | 68,883 | ||||||
Nidec Shibaura | |||||||||
External revenues | 3,862 | 3,928 | 34,411 | ||||||
Intersegment revenues | 989 | 740 | 6,483 | ||||||
Sub total | 4,851 | 4,668 | 40,894 | ||||||
Nidec-Shimpo | |||||||||
External revenues | 2,808 | 2,836 | 24,845 | ||||||
Intersegment revenues | 773 | 637 | 5,580 | ||||||
Sub total | 3,581 | 3,473 | 30,425 | ||||||
Nidec Motors & Actuators | |||||||||
External revenues | - | 8,709 | 76,294 | ||||||
Intersegment revenues | - | 117 | 1,025 | ||||||
Sub total | - | 8,826 | 77,319 | ||||||
Nidec Nissin | |||||||||
External revenues | 2,761 | 2,788 | 24,424 | ||||||
Intersegment revenues | 211 | 198 | 1,735 | ||||||
Sub total | 2,972 | 2,986 | 26,159 | ||||||
All Others | |||||||||
External revenues | 35,134 | 42,813 | 375,060 | ||||||
Intersegment revenues | 51,389 | 59,092 | 517,670 | ||||||
Sub total | 86,523 | 101,905 | 892,730 | ||||||
Total | |||||||||
External revenues | 157,094 | 193,330 | 1,693,649 | ||||||
Intersegment revenues | 110,980 | 131,884 | 1,155,357 | ||||||
Adjustments(*) | 2,210 | 2,957 | 25,904 | ||||||
Intersegment elimination | (110,980 | ) | (131,884 | ) | (1,155,357 | ) | |||
Consolidated total (net sales) | ¥ 159,304 | ¥ 196,287 | $ 1,719,553 | ||||||
(*) See Note 11 to the unaudited interim consolidated financial statements.
17
Three months ended December 31 | |||||||||
2006 | 2007 | 2007 | |||||||
(Yen in millions and U.S. dollars in thousands) | |||||||||
Segment profit or loss: | |||||||||
Nidec | ¥ 2,931 | ¥ 4,814 | $ 42,173 | ||||||
Nidec Electronics (Thailand) | 2,972 | 3,969 | 34,770 | ||||||
Nidec (Zhejiang) | 89 | 260 | 2,278 | ||||||
Nidec (Dalian) | 1,212 | 1,156 | 10,127 | ||||||
Nidec Singapore | 350 | 409 | 3,583 | ||||||
Nidec (H.K.) | 81 | 183 | 1,603 | ||||||
Nidec Philippines | 1,260 | 1,163 | 10,188 | ||||||
Nidec Sankyo | 1,489 | 1,246 | 10,915 | ||||||
Nidec Copal | 984 | 716 | 6,272 | ||||||
Nidec Tosok | 493 | 521 | 4,564 | ||||||
Nidec Copal Electronics | 589 | 1,283 | 11,240 | ||||||
Japan Servo | - | 52 | 456 | ||||||
Nidec Shibaura | (46 | ) | (96 | ) | (841 | ) | |||
Nidec-Shimpo | 517 | 314 | 2,751 | ||||||
Nidec Motors & Actuators | - | 194 | 1,700 | ||||||
Nidec Nissin | 144 | 160 | 1,402 | ||||||
All Others | 3,157 | 6,294 | 55,137 | ||||||
Total | 16,222 | 22,638 | 198,318 | ||||||
Adjustments (*) | 809 | 436 | 3,820 | ||||||
Consolidated total | ¥ 17,031 | ¥ 23,074 | $ 202,138 | ||||||
(*) See Note 11 to the unaudited interim consolidated financial statements.
Net sales of Nidec Corporation increased ¥6,059 million, or 13.3%, from ¥45,722 million for the three months ended December 31, 2006 to ¥51,781 million for the three months ended December 31, 2007. External revenues of Nidec Corporation decreased ¥58 million, or 0.2%, from ¥23,952 million for the three months ended December 31, 2006 to ¥23,894 million for the three months ended December 31, 2007. This slight decrease was due primarily to a decrease in net sales in fan motors to a major customer, despite an increase in sales of hard disk drives spindle motors, other small precision brushless DC motors, and mid-size motors. Intersegment revenues of Nidec Corporation increased ¥6,117 million, or 28.1%, from ¥21,770 million for the three months ended December 31, 2006 to ¥27,887 million for the three months ended December 31, 2007. This increase resulted primarily from an increase in sales of hard disk drives spindle motors. Operating profit of Nidec Corporation increased ¥1,883 million, or 64.2%, from ¥2,931 million for the three months ended December 31, 2006 to ¥4,814 million for the three months ended December 31, 2007. This increase was due primarily to the increase in net sales of hard disk drives spindle motors and in royalty fees from subsidiary companies.
Net sales of Nidec Electronics (Thailand) Co., Ltd. increased ¥13,782 million, or 59.2%, from ¥23,261 million for the three months ended December 31, 2006 to ¥37,043 million for the three months ended December 31, 2007 due primarily to an increase in sales volume of hard disk drives spindle motors, which reflected increasing demand, and changes in the exchange rate. Operating profit increased ¥997 million, or 33.5%, from ¥2,972 million for the three months ended December 31, 2006 to ¥3,969 million for the three months ended December 31, 2007. This was due primarily to an increase in sales of hard disk drives spindle motors and the favorable impact of changes in exchange rates.
18
Net sales of Nidec (Zhejiang) Corporation increased ¥964 million, or 17.6%, from ¥5,484 million for the three months ended December 31, 2006 to ¥6,448 million for the three months ended December 31, 2007. This increase was due mainly to the start of full-scale operations of a large customer’s factory in China. Operating profit increased ¥171 million, or 192.1%, from ¥89 million for the three months ended December 31, 2006 to ¥260 million for the three months ended December 31, 2007, due primarily to launches of new models of hard disk drives spindle motors.
Net sales of Nidec (Dalian) Limited decreased ¥221 million, or 1.8%, from ¥12,506 million for the three months ended December 31, 2006 to ¥12,285 million for the three months ended December 31, 2007. This decrease was due primarily to the negative impact of changes in exchange rates, which offset an increase in net sales on a U.S. dollar basis. Operating profit decreased ¥56 million, or 4.6%, from ¥1,212 million for the three months ended December 31, 2006 to ¥1,156 million for the three months ended December 31, 2007. The major reason for this decrease was the decrease in sales.
Net sales of Nidec Singapore Pte. Ltd. increased ¥905 million, or 7.7%, from ¥11,751 million for the three months ended December 31, 2006 to ¥12,656 million for the three months ended December 31, 2007, resulting primarily from an increase in sales of hard disk drives spindle motors to a main customer. Operating profit increased ¥59 million, or 16.9%, from ¥350 million for the three months ended December 31, 2006 to ¥409 million for the three months ended December 31, 2007. This increase was due primarily to a change in the product mix of hard disk drives spindle motors, despite an increase in the production cost of pivot assemblies.
Net sales of Nidec (H.K.) Co., Ltd. increased ¥1,969 million, or 18.7%, from ¥10,514 million for the three months ended December 31, 2006 to ¥12,483 million for the three months ended December 31, 2007. This increase was due primarily to an increase in sales of hard disk drives spindle motors affected by new products and an increase in sales of small precision brushless DC motors for optical disc drives, which reflected increasing demand. Operating profit of Nidec (H.K.) Co., Ltd. increased ¥102 million, or 125.9%, from ¥81 million for the three months ended December 31, 2006 to ¥183 million for the three months ended December 31, 2007. This increase was due to an increase in sales.
Net sales of Nidec Philippines Corporation increased ¥131 million, or 1.1%, from ¥12,443 million for the three months ended December 31, 2006 to ¥12,574 million for the three months ended December 31, 2007. The major reason for this increase was an increase in sales of hard disk drives spindle motors to a large customer, which reflected the increase in its production. However, operating profit decreased ¥97 million, or 7.7%, from ¥1,260 million for the three months ended December 31, 2006 to ¥1,163 million for the three months ended December 31, 2007. This decrease was due to a delay in cost reductions relative to declines in sales prices.
Net sales of Nidec Sankyo Corporation decreased ¥541 million, or 2.9%, from ¥18,465 million for the three months ended December 31, 2006 to ¥17,924 million for the three months ended December 31, 2007 due to a decrease in sales of card readers and industrial robots, despite an increase in sales of stepping motors. Operating profit decreased ¥243 million, or 16.3%, from ¥1,489 million for the three months ended December 31, 2006 to ¥1,246 million for the three months ended December 31, 2007. The major reason for this decrease was a decrease in sales of card readers and an accompanying change in the product mix of card readers.
Net sales of Nidec Copal Corporation decreased ¥823 million, or 4.3%, from ¥19,008 million for the three months ended December 31, 2006 to ¥18,185 million for the three months ended December 31, 2007. This decrease was due primarily to a decrease in sales of sensor units for electronic parts mounters and industrial robots, despite an increase in sales of shutters for digital cameras and vibration motors. Operating profit decreased ¥268 million, or 27.2%, from ¥984 million for the three months ended December 31, 2006 to ¥716 million for the three months ended December 31, 2007. This decrease was due primarily to a decrease in sales of system equipment, such as card printers and industrial robots.
19
Net sales of Nidec Tosok Corporation increased ¥1,106 million, or 19.8%, from ¥5,596 million for the three months ended December 31, 2006 to ¥6,702 million for the three months ended December 31, 2007. This increase was due primarily to an increase in sales of semiconductor fabrication equipment reflecting an upturn in the semiconductor industry. In addition, sales of automobile parts increased reflecting an increase in customers’ demand. Operating profit increased ¥28 million, or 5.7%, from ¥493 million for the three months ended December 31, 2006 to ¥521 million for the three months ended December 31, 2007 due primarily to an increase in sales of semiconductor fabrication equipment and cost reductions in the manufacturing of measuring equipment.
Net sales of Nidec Copal Electronics Corporation increased ¥2,015 million, or 37.3%, from ¥5,397 million for the three months ended December 31, 2006 to ¥7,412 million for the three months ended December 31, 2007. This increase was primarily due to an increase in sales of actuators, reflecting firm demand in the amusement machines industry. Operating profit increased ¥694 million, or 117.8%, from ¥589 million for the three months ended December 31, 2006 to ¥1,283 million for the three months ended December 31, 2007 due primarily to an increase in sales of actuators.
Net sales and operating profit of Japan Servo were ¥7,863 million and ¥52 million for the three months ended December 31, 2007, respectively. Japan Servo has been consolidated since April 2007. The Japan Servo segment comprises Japan Servo Co., Ltd., a subsidiary in Japan, which primarily produces and sells DC motors, fans and other small precision motors.
Net sales of Nidec Shibaura Corporation decreased ¥183 million, or 3.8%, from ¥4,851 million for the three months ended December 31, 2006 to ¥4,668 million for the three months ended December 31, 2007 due primarily to a decrease in sales of motors for laundry machines. Nidec Shibaura Corporation had operating losses of ¥46 million for the three months ended December 31, 2006 and operating losses of ¥96 million for the three months ended December 31, 2007 due primarily to a decrease in sales of high margin products.
Net sales of Nidec-Shimpo Corporation decreased ¥108 million, or 3.0%, from ¥3,581 million for the three months ended December 31, 2006 to ¥3,473 million for the three months ended December 31, 2007. This decrease was due primarily to a decrease in sales of power transmission equipment affected by a main customer’s production adjustment. Operating profit decreased ¥203 million or 39.3%, from ¥517 million for the three months ended December 31, 2006 to ¥314 million for the three months ended December 31, 2007. This decrease was due primarily to the start-up costs of new power transmission equipment products.
Net sales and operating profit of Nidec Motors & Actuators were ¥8,826 million and ¥194 million for the three months ended December 31, 2007, respectively. Nidec Motors & Actuators has been consolidated since December 2006. The Nidec Motors & Actuators segment comprises Nidec Motors & Actuators (Germany) and other subsidiaries of Europe and North America, which primarily produce and sell motors for automobiles.
Net sales of Nidec Nissin Corporation increased ¥14 million, or 0.5%, from ¥2,972 million for the three months ended December 31, 2006 to ¥2,986 million for the three months ended December 31, 2007. This increase was primarily due to an increase in sales of engineering plastic moldings for cars. Operating profit increased ¥16 million, or 11.1%, from ¥144 million for the three months ended December 31, 2006 to ¥160 million for the three months ended December 31, 2007. This increase was primarily due to an improvement in production costs in manufacturing engineering plastic dies.
Within the All Others segment, net sales increased ¥15,382 million, or 17.8%, from ¥86,523 million for the three months ended December 31, 2006 to ¥101,905 million for the three months ended December 31, 2007. The main reason of this increase was primarily due to the addition of newly consolidated subsidiaries. Operating profit also increased ¥3,137 million, or 99.4%, from ¥3,157 million for the three months ended December 31, 2006 to ¥6,294 million for the three months ended December 31, 2007. The main reason of this increase was primarily due to the expansion in sales of Nidec Sankyo (H.K.) Co., Ltd. and the addition of newly consolidated subsidiaries.
20
Liquidity and Capital Resources
During the nine months ended December 31, 2007, our total assets increased ¥38,063 million, or 5.7%, from ¥662,623 million to ¥700,686 million. Total assets of newly consolidated subsidiaries, Japan Servo Co., Ltd. and its subsidiaries (“JSRV group”), was ¥24,474 million. Excluding the contribution of JSRV group, our total assets increased ¥13,589 million, or 2.1%, to ¥676,212 million. The increase of ¥38,063 million was mainly due to increases in trade accounts receivable, property, plant and equipment, and inventories. Trade accounts receivable increased ¥23,056 million due mainly to the acquisition of JSRV group, and due to increased sales of hard disk drives spindle motors. Property, plant and equipment increased ¥37,677 million, mainly due to the acquisition of JSRV group and additional investments in buildings, machinery, and equipment for reinforcement of increasing production in overseas companies. Inventories increased ¥6,651 million due mainly to the acquisition of JSRV group. In addition, cash and cash equivalents increased ¥1,403 million due to the reasons mentioned below under “Cash Flows”.
During the nine months ended December 31, 2007, our total liabilities increased ¥7,177 million, or 2.5%, from ¥291,154 million to ¥298,331 million. Total liabilities of JSRV group was ¥10,053 million. Excluding the contribution of the JSRV group, our total liabilities decreased ¥2,876 million, or 1.0%, to ¥288,278 million. The decrease of ¥2,876 million was due to decreases in short-term borrowings for repayments and other liabilities, which were offset by an increase in trade notes and accounts payable.
During the nine months ended December 31, 2007, our working capital, defined as current assets less current liabilities, increased ¥688 million, or 0.7%, from ¥103,293 million to ¥103,981 million.
During the nine months ended December 31, 2007, our total shareholders’ equity increased ¥26,634 million, or 8.7%, from ¥305,016 million to ¥331,650 million. The increase of ¥26,634 million was mainly due to increases in retained earnings of ¥26,074 million, offset by dividends paid of ¥7,242 million. As a result, the ratio of stockholders’ equity to total assets increased 1.3% from 46.0% as of March 31, 2007 to 47.3% as of December 31, 2007.
Cash Flows
Net cash provided by operating activities increased ¥14,024 million from ¥43,261 million for the nine months ended December 31, 2006 to ¥57,285 million for the nine months ended December 31, 2007. This increase was due mainly to the positive cash flow impact on operating activities resulting from an increase in operating income.
Net cash used in investing activities decreased ¥12,253 million from ¥45,140 million for the nine months ended December 31, 2006 to ¥32,887 million for the nine months ended December 31, 2007. This decrease was mainly due to decreases in additions to property, plant and equipment and the acquisition of consolidated subsidiaries. The cash outflows from the acquisitions decreased ¥6,567 million from ¥9,185 million for the nine months ended December 31, 2006 to ¥2,618 million for the nine months ended December 31, 2007.
Net cash used in financing activities increased ¥7,296 million from ¥14,804 million for the nine months ended December 31, 2006 to ¥22,100 million for the nine months ended December 31, 2007. The increased cash outflows in financing activities were mainly due to a decrease in short-term borrowings.
Our total outstanding balance of cash and cash equivalents increased ¥1,403 million from ¥88,784 million as of March 31, 2007 to ¥90,187 million as of December 31, 2007.
21
NIDEC CORPORATION
CONSOLIDATED BALANCE SHEETS
ASSETS
Yen in millions | U.S. dollars in thousands | ||||||||
2007 | December 31, | ||||||||
March 31 | December 31 | 2007 | |||||||
(Unaudited) | (Unaudited) | ||||||||
Current assets: | |||||||||
Cash and cash equivalents | ¥ 88,784 | ¥ 90,187 | $ 790,074 | ||||||
Trade notes and accounts receivable, net of allowance for doubtful accounts of ¥ 1,270 million as of March 31, 2007 and ¥ 640 million ($5,607 thousand) as of December 31, 2007: | |||||||||
Notes | 17,318 | 18,557 | 162,567 | ||||||
Accounts | 147,014 | 170,070 | 1,489,882 | ||||||
Inventories: | |||||||||
Finished goods | 26,960 | 32,761 | 287,000 | ||||||
Raw materials | 17,324 | 18,506 | 162,120 | ||||||
Work in progress | 16,405 | 16,441 | 144,030 | ||||||
Project in progress | 1,212 | 1,174 | 10,285 | ||||||
Supplies and other | 2,407 | 2,077 | 18,195 | ||||||
Other current assets | 21,238 | 22,599 | 197,976 | ||||||
Total current assets | 338,662 | 372,372 | 3,262,129 | ||||||
Marketable securities and other securities investments | 21,805 | 18,844 | 165,081 | ||||||
Investments in and advances to affiliated companies | 2,194 | 2,202 | 19,290 | ||||||
Property, plant and equipment: | |||||||||
Land | 38,289 | 40,523 | 354,998 | ||||||
Buildings | 103,325 | 114,930 | 1,006,833 | ||||||
Machinery and equipment | 258,970 | 286,203 | 2,507,253 | ||||||
Construction in progress | 13,717 | 10,322 | 90,425 | ||||||
414,301 | 451,978 | 3,959,509 | |||||||
Less - Accumulated depreciation | (207,059 | ) | (240,227 | ) | (2,104,485 | ) | |||
207,242 | 211,751 | 1,855,024 | |||||||
Goodwill | 67,780 | 71,177 | 623,539 | ||||||
Other non-current assets, net of allowance for doubtful accounts of ¥893 million as of March 31, 2007 and ¥1,471 million ($12,887 thousand) as of December 31, 2007 | 24,940 | 24,340 | 213,229 | ||||||
Total assets | ¥ 662,623 | ¥ 700,686 | $ 6,138,292 | ||||||
The accompanying notes are an integral part of these financial statements.
22
NIDEC CORPORATION
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND SHAREHOLDERS’ EQUITY
Yen in millions | U.S. dollars in thousands | ||||||||
2007 | |||||||||
December 31, | |||||||||
March 31 | December 31 | 2007 | |||||||
(Unaudited) | (Unaudited) | ||||||||
Current liabilities: | |||||||||
Short-term borrowings | ¥ 78,848 | ¥ 74,099 | $ 649,137 | ||||||
Current portion of long-term debt | 3,216 | 29,874 | 261,708 | ||||||
Trade notes and accounts payable | 117,665 | 131,609 | 1,152,948 | ||||||
Other current liabilities | 35,640 | 32,809 | 287,420 | ||||||
Total current liabilities | 235,369 | 268,391 | 2,351,213 | ||||||
Long-term liabilities: | |||||||||
Long-term debt | 31,560 | 3,917 | 34,314 | ||||||
Accrued pension and severance costs | 13,013 | 15,319 | 134,201 | ||||||
Other long-term liabilities | 11,212 | 10,704 | 93,772 | ||||||
Total long-term liabilities | 55,785 | 29,940 | 262,287 | ||||||
Minority interest in consolidated subsidiaries | 66,453 | 70,705 | 619,404 | ||||||
Contingencies (Note 10) | |||||||||
Shareholders’ equity: | |||||||||
Common stock authorized: 480,000,000 shares in 2007; issued and outstanding: 144,780,492 shares in March 31, 2007 and 144,987,492 shares in December 31, 2007 | 65,868 | 66,248 | 580,359 | ||||||
Additional paid-in capital | 68,469 | 68,859 | 603,233 | ||||||
Retained earnings | 160,480 | 186,554 | 1,634,288 | ||||||
Accumulated other comprehensive income: | |||||||||
Foreign currency translation adjustments | 6,874 | 7,732 | 67,736 | ||||||
Unrealized gains from securities | 3,324 | 2,302 | 20,166 | ||||||
Pension liability adjustments | 263 | 233 | 2,041 | ||||||
Treasury stock, at cost: 44,966 shares in March 31, 2007 and 47,269 shares in December 31, 2007 | (262 | ) | (278 | ) | (2,435 | ) | |||
Total shareholders’ equity | 305,016 | 331,650 | 2,905,388 | ||||||
Total liabilities and shareholders’ equity | ¥ 662,623 | ¥ 700,686 | $ 6,138,292 | ||||||
The accompanying notes are an integral part of these financial statements.
23
NIDEC CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Yen in millions | U.S. dollars in thousands | |||||||||
For the three months ended December 31 | For the three months ended December 31, | |||||||||
2006 | 2007 | 2007 | ||||||||
Net sales | ¥ 159,304 | ¥ 196,287 | $ 1,719,553 | |||||||
Operating expenses: | ||||||||||
Cost of products sold | 122,232 | 153,555 | 1,345,204 | |||||||
Selling, general and administrative expenses | 12,095 | 12,147 | 106,412 | |||||||
Research and development expenses | 7,946 | 7,511 | 65,799 | |||||||
142,273 | 173,213 | 1,517,415 | ||||||||
Operating income | 17,031 | 23,074 | 202,138 | |||||||
Other income (expense): | ||||||||||
Interest and dividend income | 544 | 572 | 5,011 | |||||||
Interest expense | (355 | ) | (380 | ) | (3,329 | ) | ||||
Foreign exchange gain (loss), net | 1,131 | (1,026 | ) | (8,988 | ) | |||||
Loss on marketable securities, net | (13 | ) | (2 | ) | (18 | ) | ||||
Other, net | (281 | ) | (92 | ) | (806 | ) | ||||
1,026 | (928 | ) | (8,130 | ) | ||||||
Income before provision for income taxes | 18,057 | 22,146 | 194,008 | |||||||
Provision for income taxes | (6,913 | ) | (5,887 | ) | (51,573 | ) | ||||
Income before minority interest and equity in earnings of affiliated companies | 11,144 | 16,259 | 142,435 | |||||||
Minority interest in income of consolidated subsidiaries | 1,802 | 2,331 | 20,420 | |||||||
Equity in net losses / (income) of affiliated companies | 43 | (18 | ) | (158 | ) | |||||
Net income | ¥ 9,299 | ¥ 13,946 | $ 122,173 | |||||||
Yen | U.S. dollars | |||||||||
Per share data: | ||||||||||
Net income | - basic | ¥ 64.28 | ¥ 96.22 | $ 0.84 | ||||||
- diluted | ¥ 62.46 | ¥ 93.62 | $ 0.82 | |||||||
Cash dividends | ¥ 20.00 | ¥ 25.00 | $ 0.22 | |||||||
The accompanying notes are an integral part of these financial statements.
24
NIDEC CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Yen in millions | U.S. dollars in thousands | |||||||||
For the nine months ended December 31 | For the nine months ended December 31, | |||||||||
2006 | 2007 | 2007 | ||||||||
Net sales | ¥ 459,141 | ¥ 558,988 | $ 4,896,960 | |||||||
Operating expenses: | ||||||||||
Cost of products sold | 352,307 | 440,107 | 3,855,514 | |||||||
Selling, general and administrative expenses | 34,123 | 39,092 | 342,462 | |||||||
Research and development expenses | 23,634 | 22,639 | 198,327 | |||||||
410,064 | 501,838 | 4,396,303 | ||||||||
Operating income | 49,077 | 57,150 | 500,657 | |||||||
Other income (expense): | ||||||||||
Interest and dividend income | 1,808 | 2,113 | 18,511 | |||||||
Interest expense | (1,351 | ) | (1,901 | ) | (16,654 | ) | ||||
Foreign exchange gain (loss), net | 1,826 | (2,768 | ) | (24,249 | ) | |||||
Gain from marketable securities, net | 240 | 117 | 1,025 | |||||||
Other, net | (882 | ) | (1,059 | ) | (9,277 | ) | ||||
1,641 | (3,498 | ) | (30,644 | ) | ||||||
Income before provision for income taxes | 50,718 | 53,652 | 470,013 | |||||||
Provision for income taxes | (14,020 | ) | (14,110 | ) | (123,609 | ) | ||||
Income before minority interest and equity in earnings of affiliated companies | 36,698 | 39,542 | 346,404 | |||||||
Minority interest in income of consolidated subsidiaries | 6,587 | 5,232 | 45,835 | |||||||
Equity in net income of affiliated companies | 36 | 7 | 61 | |||||||
Net income | ¥ 30,075 | ¥ 34,303 | $ 300,508 | |||||||
Yen | U.S. dollars | |||||||||
Per share data: | ||||||||||
Net income | - basic | ¥ 207.92 | ¥ 236.73 | $ 2.07 | ||||||
- diluted | ¥ 202.04 | ¥ 230.28 | $ 2.02 | |||||||
Cash dividends | ¥ 40.00 | ¥ 50.00 | $ 0.44 | |||||||
The accompanying notes are an integral part of these financial statements.
25
NIDEC CORPORATION
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
AND COMPREHENSIVE INCOME(LOSS)
(Unaudited)
Yen in millions | |||||||||||||||||
Common stock | Additional paid-in capital | Retained earnings | Accumulated other comprehensive income (loss) | Treasury stock, at cost | Total | ||||||||||||
Shares | Amount | ||||||||||||||||
Balance at March 31, 2007 | 144,780,492 | ¥65,868 | ¥68,469 | ¥160,480 | ¥10,461 | ¥(262) | ¥305,016 | ||||||||||
Cumulative effect resulting from the adoption of FIN No. 48 | (987 | ) | (987 | ) | |||||||||||||
Comprehensive income: | |||||||||||||||||
Net income | 34,303 | 34,303 | |||||||||||||||
Other comprehensive income (loss): | |||||||||||||||||
Foreign currency translation adjustments | 858 | 858 | |||||||||||||||
Unrealized losses on securities, net of reclassification adjustment | (1,022 | ) | (1,022 | ) | |||||||||||||
Pension liability adjustments | (30 | ) | (30 | ) | |||||||||||||
Total comprehensive income | 34,109 | ||||||||||||||||
Dividends paid | (7,242 | ) | (7,242 | ) | |||||||||||||
Exercise of stock option | 207,000 | 380 | 390 | 770 | |||||||||||||
Purchase of treasury stock | (16) | (16 | ) | ||||||||||||||
Balance at December 31, 2007 | 144,987,492 | ¥66,248 | ¥ 68,859 | ¥186,554 | ¥10,267 | ¥(278) | ¥331,650 | ||||||||||
U.S. dollars in thousands | |||||||||||||||
Common Stock | Additional paid-in capital | Retained earnings | Accumulated other comprehensive income (loss) | Treasury stock, at cost | Total | ||||||||||
Balance at March 31, 2007 | $577,030 | $599,816 | $1,405,870 | $91,643 | $(2,295) | $2,672,064 | |||||||||
Cumulative effect resulting from the adoption of FIN No. 48 | (8,647 | ) | (8,647 | ) | |||||||||||
Comprehensive income: | |||||||||||||||
Net income | 300,508 | 300,508 | |||||||||||||
Other comprehensive income (loss): | |||||||||||||||
Foreign currency translation adjustments | 7,516 | 7,516 | |||||||||||||
Unrealized losses on securities, net of reclassification adjustment | (8,953 | ) | (8,953 | ) | |||||||||||
Pension liability adjustments | (263 | ) | (263 | ) | |||||||||||
Total comprehensive income | 298,808 | ||||||||||||||
Dividends paid | (63,443 | ) | (63,443 | ) | |||||||||||
Exercise of stock option | 3,329 | 3,417 | 6,746 | ||||||||||||
Purchase of treasury stock | (140) | (140 | ) | ||||||||||||
Balance at December 31, 2007 | $580,359 | $603,233 | $1,634,288 | $89,943 | $(2,435) | $2,905,388 | |||||||||
The accompanying notes are an integral part of these financial statements.
26
NIDEC CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Yen in millions | U.S. dollars in thousands | ||||||||
For the nine months ended December 31 | For the nine months ended December 31, | ||||||||
2006 | 2007 | 2007 | |||||||
Cash flows from operating activities: | |||||||||
Net income | ¥ 30,075 | ¥ 34,303 | $ 300,508 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||
Depreciation and amortization | 20,957 | 28,171 | 246,789 | ||||||
Gain from marketable securities, net | (251 | ) | (117 | ) | (1,025 | ) | |||
Loss on sales, disposal or impairment of property, plant and equipment | 1,100 | 341 | 2,987 | ||||||
Minority interest in income of consolidated subsidiaries | 6,587 | 5,232 | 45,835 | ||||||
Equity in net losses of affiliated companies | 36 | 7 | 61 | ||||||
Foreign currency adjustments | 14 | 1,707 | 14,954 | ||||||
Changes in operating assets and liabilities: | |||||||||
Increase in notes and accounts receivable | (12,680 | ) | (13,843 | ) | (121,270 | ) | |||
Increase in inventories | (1,305 | ) | (2,286 | ) | (20,026 | ) | |||
Increase in notes and accounts payable | 844 | 7,665 | 67,148 | ||||||
Other | (2,116 | ) | (3,895 | ) | (34,123 | ) | |||
Net cash provided by operating activities | 43,261 | 57,285 | 501,838 | ||||||
Cash flows from investing activities: | |||||||||
Additions to property, plant and equipment | (30,640 | ) | (25,972 | ) | (227,525 | ) | |||
Proceeds from sales of property, plant and equipment | 860 | 1,907 | 16,706 | ||||||
Purchases of marketable securities | (2 | ) | (107 | ) | (937 | ) | |||
Proceeds from sales of marketable securities | 379 | 2,029 | 17,775 | ||||||
Proceeds from sales of investments in affiliated companies | 774 | - | - | ||||||
Acquisitions of consolidated subsidiaries, net of cash acquired | (9,185 | ) | (2,618 | ) | (22,935 | ) | |||
Payments for additional investments in subsidiaries | (6,308 | ) | (6,604 | ) | (57,854 | ) | |||
Other | (1,018 | ) | (1,522 | ) | (13,333 | ) | |||
Net cash used in investing activities | ¥ (45,140 | ) | ¥ (32,887 | ) | $ (288,103 | ) | |||
The accompanying notes are an integral part of these financial statements.
27
NIDEC CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Yen in millions | U.S. dollars in thousands | ||||||||
For the nine months ended December 31 | For the nine months ended December 31, | ||||||||
2006 | 2007 | 2007 | |||||||
Cash flows from financing activities: | |||||||||
Decrease in short-term borrowings | ¥ (3,810 | ) | ¥ (11,251 | ) | $ (98,563 | ) | |||
Repayments of long-term debt | (3,759 | ) | (2,523 | ) | (22,102 | ) | |||
Proceeds from issuance of new shares | 307 | 761 | 6,667 | ||||||
Dividends paid | (5,785 | ) | (7,242 | ) | (63,443 | ) | |||
Other | (1,757 | ) | (1,845 | ) | (16,163 | ) | |||
Net cash used in financing activities | (14,804 | ) | (22,100 | ) | (193,604 | ) | |||
Effect of exchange rate changes on cash and cash equivalents | 1,437 | (895 | ) | (7,841 | ) | ||||
Net (decrease) increase in cash and cash equivalents | (15,246 | ) | 1,403 | 12,290 | |||||
Cash and cash equivalents at beginning of period | 92,079 | 88,784 | 777,784 | ||||||
Cash and cash equivalents at end of period | ¥ 76,833 | ¥ 90,187 | $ 790,074 | ||||||
The accompanying notes are an integral part of these financial statements.
28
NIDEC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Basis of preparation:
The accompanying interim condensed consolidated financial statements of NIDEC Corporation (the “Company”, and together with its consolidated subsidiaries, “NIDEC”) have been prepared in accordance with accounting principles generally accepted in the United States. The interim condensed consolidated financial statements are unaudited but include all adjustments, consisting of only normal recurring adjustments, which the Company considers necessary for a fair presentation of the consolidated financial position and the consolidated results of its operations and cash flows. Results for the nine months ended December 31, 2007 are not necessarily indicative of results that may be expected for the full year. The consolidated balance sheet at March 31, 2007, has been derived from the audited consolidated financial statements at that date, but does not include all of the information and footnotes required by GAAP for complete financial statements. For further information, refer to the audited consolidated financial statements and footnotes thereto for the year ended March 31, 2007, included on Form 20-F.
U.S. dollar amounts are included solely for the convenience of readers at the rate of ¥114.15 = US$1, the approximate current exchange rate at December 31, 2007.
Certain reclassifications in the consolidated statements of income and the consolidated statements of cash flows for the nine months ended December 31, 2006 have been made to conform to the presentation used for the nine months ended December 31, 2007.
2. Acquisitions:
On April 27, 2007, NIDEC acquired 18,203,000 shares (or, 51.7%) of the common stock in Japan Servo Co., Ltd. (“JSRV”), which manufactures and sells motors and motor applied products. Since NIDEC already owned 1,466 shares of JSRV’s common stock prior to April 27, 2007, total shares and purchase price for JSRV were 18,204,466 and ¥4,809 million ($42,129 thousand), respectively. NIDEC recognized preliminary goodwill amounting to ¥391 million ($3,425 thousand) as the result of this acquisition.
During the period between April 27, 2007 and December 31, 2007, NIDEC acquired additional 3,212,000 shares of JSRV’s common stock, increasing its ownership interest in JSRV to 60.9%. As a result, the number of shares of JSRV common stock held by NIDEC as of December 31, 2007 totaled 21,416,466, representing ¥6,550 million ($57,381 thousand) purchase price in total, and recognized preliminary goodwill amounted to ¥1,355 million ($11,870 thousand).
This acquisition is intended to achieve an optimal blend of the technological expertise and production scale that the two companies have developed to date, particularly in the market of small precision motors. The total cost of the acquisition has been allocated to the assets acquired and the liabilities assumed based on their respective fair values in accordance with SFAS 141, “Business Combinations”.
29
NIDEC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(Unaudited)
The value of certain assets and liabilities are based on preliminary management estimates and are subject to adjustment as additional information is obtained. Therefore the allocation of the purchase price and the valuation of the assets and liabilities are subject to refinement. Changes to the valuation may result in adjustments to the fair value of certain identifiable intangible assets acquired.
NIDEC has not identified any material unrecorded pre-acquisition contingencies. Prior to the end of the one-year purchase price allocation period, if information becomes available which would indicate it is probable that such events had occurred and the amounts can be reasonably estimated, such items will be included in the final purchase price allocation and may adjust preliminary goodwill.
The following represents the unaudited pro forma results of operations of NIDEC for the nine months ended December 31, 2007, as if the acquisition in JSRV had occurred on April 1, 2007. The unaudited pro forma results of operations are presented for comparative purposes only and are not necessarily indicative of the results of operations that may occur in the future or that would have occurred had the acquisition been in effect on the dates indicated.
Yen in millions | U.S. dollars in thousands | |||||
For the nine months ended December 31, 2007 (Unaudited) | For the nine months ended December 31, 2007 (Unaudited) | |||||
Pro forma net sales | ¥ 561,901 | $ 4,922,479 | ||||
Pro forma net income | 33,831 | 296,373 | ||||
Yen | U.S. dollars | |||||
Pro forma net income per common share | ||||||
-basic | ¥ 233.47 | $ 2.05 | ||||
-diluted | 227.11 | 1.99 | ||||
30
NIDEC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(Unaudited)
The assets acquired and liabilities assumed on consolidation are as follows:
Yen in millions | U.S. dollars in thousands | ||||||
As of April 27, 2007 | As of April 27, 2007 | ||||||
JSRV | |||||||
Cash and cash equivalents | ¥ 2,191 | $ 19,194 | |||||
Accounts receivable | 9,018 | 79,001 | |||||
Inventories | 4,189 | 36,697 | |||||
Other current assets | 1,201 | 10,521 | |||||
Property, plant and equipment | 7,030 | 61,586 | |||||
Goodwill | 391 | 3,425 | |||||
Other non-current assets | 1,882 | 16,488 | |||||
Total assets acquired | 25,902 | 226,912 | |||||
Short-term borrowings and current portion of long-term debt | (6,126 | ) | (53,666 | ) | |||
Accounts payable | (4,915 | ) | (43,057 | ) | |||
Other current liabilities | (2,581 | ) | (22,611 | ) | |||
Long-term debt | (619 | ) | (5,423 | ) | |||
Other non-current liabilities | (3,087 | ) | (27,043 | ) | |||
Total liabilities assumed | (17,328 | ) | (151,800 | ) | |||
Minority interest | (3,765 | ) | (32,983 | ) | |||
Purchase price | 4,809 | 42,129 | |||||
Cash acquired | (2,191 | ) | (19,194 | ) | |||
Net cash paid (acquired) | ¥ 2,618 | $ 22,935 | |||||
Additional disclosures related to this acquisition will be included in the year end financial statements.
31
NIDEC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(Unaudited)
3. Goodwill and other intangible assets
Goodwill represents the excess of purchase price and related costs over the fair value of net assets of acquired businesses. Under SFAS No. 142 “Goodwill and Other Intangible Assets”, goodwill is not amortized but rather tested annually for impairment. If, between annual tests, an event, which would reduce the fair value below its carrying amount, occurs, NIDEC would recognize an impairment at such time.
NIDEC has completed the impairment test for existing goodwill as required by SFAS No. 142. NIDEC has determined that the fair value of each reporting unit which includes goodwill is in excess of its carrying amount. Accordingly, for the nine months ended December 31, 2007, no impairment loss was recorded for goodwill.
The changes in the carrying amount of goodwill for the nine months ended December 31, 2006 and 2007 are as follows:
Yen in millions | U.S dollars in thousands | ||||||
2006 | 2007 | 2007 | |||||
Balance as of April 1 | ¥ 44,266 | ¥ 67,780 | $ 593,780 | ||||
Acquired during nine months | 19,408 | 3,397 | 29,759 | ||||
Balance as of December 31 | ¥ 63,674 | ¥ 71,177 | $ 623,539 | ||||
32
NIDEC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(Unaudited)
4. Earnings per share:
The tables below set forth a reconciliation of the differences between basic and diluted income per share for the three months and for the nine months ended December 31, 2006 and 2007:
Yen in millions | Thousands of shares | Yen | U.S. dollars | |||||||||
Net income | Weighted- average shares | Net income per share | Net income per share | |||||||||
For the three months ended December 31, 2006: | ||||||||||||
Basic net income per share | ||||||||||||
Net income available to common shareholders | ¥ 9,299 | 144,675 | ¥64.28 | |||||||||
Effect of dilutive securities | ||||||||||||
Zero coupon 0.0% convertible bonds | - | 4,022 | ||||||||||
Stock option | - | 179 | ||||||||||
Diluted net income per share | ||||||||||||
Net income for computation | ¥ 9,299 | 148,876 | ¥ 62.46 | |||||||||
For the three months ended December 31, 2007: | ||||||||||||
Basic net income per share | ||||||||||||
Net income available to common shareholders | ¥ 13,946 | 144,940 | ¥ 96.22 | $0.84 | ||||||||
Effect of dilutive securities | ||||||||||||
Zero coupon 0.0% convertible bonds | - | 4,022 | ||||||||||
Diluted net income per share | ||||||||||||
Net income for computation | ¥ 13,946 | 148,962 | ¥93.62 | $0.82 |
33
NIDEC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(Unaudited)
Yen in millions | Thousands of shares | Yen | U.S. dollars | |||||||||
Net income | Weighted- average shares | Net income per share | Net income per share | |||||||||
For the nine months ended December 31, 2006: | ||||||||||||
Basic net income per share | ||||||||||||
Net income available to common shareholders | ¥ 30,075 | 144,646 | ¥207.92 | |||||||||
Effect of dilutive securities | ||||||||||||
Zero coupon 0.0% convertible bonds | - | 4,022 | ||||||||||
Stock option | - | 187 | ||||||||||
Diluted net income per share | ||||||||||||
Net income for computation | ¥ 30,075 | 148,855 | ¥ 202.04 | |||||||||
For the nine months ended December 31, 2007: | ||||||||||||
Basic net income per share | ||||||||||||
Net income available to common shareholders | ¥ 34,303 | 144,906 | ¥ 236.73 | $2.07 | ||||||||
Effect of dilutive securities | ||||||||||||
Zero coupon 0.0% convertible bonds | - | 4,022 | ||||||||||
Stock option | - | 34 | ||||||||||
Diluted net income per share | ||||||||||||
Net income for computation | ¥ 34,303 | 148,962 | ¥230.28 | $2.02 |
34
NIDEC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(Unaudited)
5. Summarized income statement information for affiliated companies:
Summarized financial information for affiliated companies accounted for by the equity method is shown below:
Yen in millions | U.S. dollars in thousands | |||||||
For the nine months ended December 31 | For the nine months ended December 31, | |||||||
2006 | 2007 | 2007 | ||||||
Net revenue | ¥ 8,343 | ¥ 12,374 | $ 108,401 | |||||
Gross profit | 698 | 1,037 | 9,085 | |||||
Net income | ¥ 79 | ¥ 15 | $ 131 | |||||
6. Pension and severance plans:
The amounts of net periodic benefit cost in pension and severance plans for the nine months ended December 31, 2006 and 2007 were as follows:
Yen in millions | U.S. dollars in thousands | ||||||||
For the nine months ended December 31 | For the nine months ended December 31, | ||||||||
2006 | 2007 | 2007 | |||||||
Service cost | ¥ 620 | ¥ 908 | $ 7,954 | ||||||
Interest cost | 268 | 419 | 3,671 | ||||||
Expected return on plan assets | (117 | ) | (149 | ) | (1,305 | ) | |||
Amortization of net actuarial gain | (28 | ) | (3 | ) | (26 | ) | |||
Amortization of prior service credit | (47 | ) | (47 | ) | (412 | ) | |||
Cost for defined contribution plans and others | 462 | 458 | 4,012 | ||||||
Net periodic pension cost | ¥ 1,158 | ¥ 1,586 | $ 13,894 | ||||||
35
NIDEC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(Unaudited)
7. Income taxes:
NIDEC is subject to a number of different income taxes, which, in the aggregate, indicate statutory rates in Japan of approximately 41.0% for the nine months ended December 31, 2006 and 2007. Reconciliation of the differences between the statutory tax rates and the estimated effective income tax rates are as follows:
For the nine months ended December 31 | |||||
2006 | 2007 | ||||
Statutory tax rate | 41.0 | % | 41.0 | % | |
Increase (reduction) in taxes resulting from: | |||||
Tax benefit in foreign subsidiaries | (13.8 | ) | (16.8 | ) | |
Tax on undistributed earnings | 1.0 | 0.6 | |||
Valuation allowance | (5.2 | ) | 2.5 | ||
Transfer pricing taxation | 5.7 | - | |||
Other | (1.1 | ) | (1.0 | ) | |
Estimated effective income tax rate | 27.6 | % | 26.3 | % | |
The estimated effective income tax rate for the nine months ended December 31, 2007 was lower compared to the corresponding prior period, from 27.6% to 26.3%. The main reason for this decrease was due to the net impact of an increase in valuation allowances and tax benefits in foreign subsidiaries as well as offset by the effect of transfer pricing taxation for the current period. The reason for the increase in valuation allowances was the additional establishment for deferred tax assets of newly acquired subsidiaries due to less ability to realize of future tax benefits, since taxable income in newly acquired subsidiaries decreased during the current period.
As a result of adoption of FIN No. 48 “Accounting for Uncertainty in Income Taxes” effective April 1, 2007, our retained earnings as of March 31, 2007 decreased by ¥987 million reflecting the cumulative effect of this adoption.
36
NIDEC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(Unaudited)
8. Stock-based compensation:
On May 14, 2003, the Company’s shareholders approved a stock option plan. Under the plan, executives and certain employees receive options. The number of shares to be issued upon exercise of the options is limited to 296,700 shares of the Company’s common stock. Each option entitles the holder to purchase 100 shares of the Company’s common stock. The options vested on June 30, 2004 and became exercisable for the period from July 1, 2004 to June 30, 2007. The exercise price was determined as ¥7,350 ($64.39) per share of common stock. Options were granted with an exercise price equal to the closing price of the Company’s shares traded on the Osaka Securities Exchange on the grant date.
On November 18, 2005, the Company completed a two-for-one stock split. As a result, the exercise price changed to ¥3,675 ($32.19) per share of common stock. The exercise price is presented by the changed price retroactive to the previous fiscal year in the table below.
Number of options | Exercise price (per shares) | ||||||
Balance at March 31, 2003: | |||||||
Granted | 2,967 | ¥ 3,675 | $ 32.19 | ||||
Exercised | - | - | - | ||||
Canceled | 105 | 3,675 | 32.19 | ||||
Balance at March 31, 2004: | 2,862 | 3,675 | 32.19 | ||||
Exercised | 439 | 3,675 | 32.19 | ||||
Canceled | 61 | 3,675 | 32.19 | ||||
Balance at March 31, 2005: | 2,362 | 3,675 | 32.19 | ||||
Exercised | 606 | 3,675 | 32.19 | ||||
Canceled | - | - | - | ||||
Balance at March 31, 2006: | 1,756 | 3,675 | 32.19 | ||||
Exercised | 596 | 3,675 | 32.19 | ||||
Canceled | - | - | - | ||||
Balance at March 31, 2007: | 1,160 | 3,675 | 32.19 | ||||
Exercised | 1,035 | 3,675 | 32.19 | ||||
Canceled | 125 | ¥ 3,675 | $ 32.19 | ||||
Balance at December 31, 2007: | 0 | ||||||
The Company used the intrinsic value based method of accounting for stock compensation as prescribed by APB Opinion No. 25, “Accounting for Stock Issued to Employees”, and related interpretations. No stock-based compensation cost was recognized on the date of grant, as the current market price of the underlying stock was equal to the exercise price.
37
NIDEC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(Unaudited)
The fair value of the option was ¥3,499 ($30.65) per share. The fair value as of the date of grant was estimated using a Black-Scholes option-pricing model with the following assumptions:
As of May 14, 2003 | ||||
Risk-free interest rate | 0.14 | % | ||
Expected volatility | 64.00 | % | ||
Expected dividend yield | 0.34 | % | ||
Expected lives | 4.13 | years | ||
In December 2004, the FASB issued SFAS No. 123R (“SFAS 123R”), revised 2004, “Share-Based Payment.” SFAS 123R requires measurement of compensation cost for all share-based payments (including employee stock options) at fair value for interim or annual periods beginning after June 15, 2005. The Company adopted FAS No. 123R using the modified-prospective transition method beginning April 1, 2006. The adoption of FAS 123R did not have any material impact on our consolidated financial position, consolidated results of operations, or liquidity.
9. Comprehensive income:
NIDEC’s total comprehensive income (loss) for the nine months ended December 31, 2006 and 2007 was as follows:
Yen in millions | U.S. dollars in thousands | |||||||
For the nine months ended December 31 | For the nine months ended December 31, | |||||||
2006 | 2007 | 2007 | ||||||
Net income | ¥ 30,075 | ¥ 34,303 | $ 300,508 | |||||
Other comprehensive income (loss): | ||||||||
Foreign currency translation adjustments | 5,164 | 858 | 7,516 | |||||
Unrealized gains from securities, net of reclassification adjustment | (347 | ) | (1,022 | ) | (8,953 | ) | ||
Pension liability adjustments | - | (30 | ) | (263 | ) | |||
4,817 | (194 | ) | (1,700 | ) | ||||
Total comprehensive income | ¥ 34,892 | ¥ 34,109 | $ 298,808 | |||||
38
NIDEC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(Unaudited)
10. Contingencies:
Contingent liabilities for guarantees given in the ordinary course of business amounted to approximately ¥281 million ($2,462 thousand) as of December 31, 2007.
NIDEC has guaranteed approximately ¥281 million ($2,462 thousand) of bank loans for employees in connection with their housing costs. If an employee defaults on his/her loan payments, NIDEC would be required to perform under the guarantee.
The undiscounted maximum amount of NIDEC’s obligation to make future payments in the event of defaults is approximately ¥281 million ($2,462 thousand). The current carrying amount of the liabilities for our obligations under the guarantee is zero.
11. Segment data:
(1) Enterprise-wide information
The following table provides product information for the three months ended December 31, 2006 and 2007:
Yen in millions | U.S. dollars in thousands | ||||||||
For the three months ended December 31 | For the three months ended December 31, | ||||||||
2006 | 2007 | 2007 | |||||||
Net sales: | |||||||||
Small precision motors: | |||||||||
Hard disk drives spindle motors | ¥ 52,593 | ¥ 63,089 | $ 552,685 | ||||||
Other small precision brushless DC motors | 19,153 | 24,494 | 214,577 | ||||||
Brushless DC fans | 10,054 | 12,592 | 110,311 | ||||||
Other small precision motors * | 1,502 | 6,844 | 59,956 | ||||||
Sub total | 83,302 | 107,019 | 937,529 | ||||||
Mid-size motors | 11,699 | 23,268 | 203,837 | ||||||
Machinery | 19,743 | 18,161 | 159,098 | ||||||
Electronic and optical components | 37,807 | 40,715 | 356,680 | ||||||
Others | 6,753 | 7,124 | 62,409 | ||||||
Consolidated total | ¥ 159,304 | ¥ 196,287 | $ 1,719,553 | ||||||
* “Small precision brush DC motors” was changed to “Other small precision motors” from the beginning of this fiscal year because the diversity of the products increased.
39
NIDEC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(Unaudited)
The following table provides product information for the nine months ended December 31, 2006 and 2007:
Yen in millions | U.S. dollars in thousands | ||||||||
For the nine months ended December 31 | For the nine months ended December 31, | ||||||||
2006 | 2007 | 2007 | |||||||
Net sales: | |||||||||
Small precision motors: | |||||||||
Hard disk drives spindle motors | ¥ 145,594 | ¥ 171,192 | $ 1,499,711 | ||||||
Other small precision brushless DC motors | 55,901 | 70,103 | 614,131 | ||||||
Brushless DC fans | 29,177 | 36,764 | 322,067 | ||||||
Other small precision motors * | 5,131 | 17,267 | 151,266 | ||||||
Sub total | 235,803 | 295,326 | 2,587,175 | ||||||
Mid-size motors | 33,984 | 70,941 | 621,472 | ||||||
Machinery | 63,473 | 53,130 | 465,440 | ||||||
Electronic and optical components | 106,321 | 119,822 | 1,049,689 | ||||||
Others | 19,560 | 19,769 | 173,184 | ||||||
Consolidated total | ¥ 459,141 | ¥ 558,988 | $ 4,896,960 | ||||||
* “Small precision brush DC motors” was changed to “Other small precision motors” from the beginning of this fiscal year because the diversity of the products increased.
(2) Operating segment information
We evaluate our financial performance based on segmental profit and loss, which consists of sales and operating revenues less operating expenses. Segmental profit or loss is determined using the accounting principles in the segment’s country of domicile. NIDEC Corporation, or NCJ, Nidec Sankyo Corporation, or NSNK, Nidec Copal Corporation, or NCPL, Nidec Tosok Corporation, or NTSC, Nidec Copal Electronics Corporation, or NCEL, Nidec Shibaura Corporation, or NSBC, Nidec-Shimpo Corporation or NSCJ, and Nidec Nissin Corporation or NNSN, apply Japanese GAAP, Nidec Electronics (Thailand) Co., Ltd., or NET, applies Thai accounting principles, Nidec (Zhejiang) Corporation, or NCC and Nidec (Dalian) Limited, or NCD, apply Chinese accounting principles, Nidec Singapore Pte. Ltd., or NCS, applies Singaporean accounting principles, Nidec (H.K.) Co., Ltd., or NCH, applies Hong Kong accounting principles, and Nidec Philippines Corporation, or NCF, applies Philippine accounting principles.
40
NIDEC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(Unaudited)
Nidec acquired all of the voting rights of the Motors & Actuators business of Valeo S.A., France (“NMA”) in December 2006, and acquired majority of the voting rights of Japan Servo Co., Ltd. (“JSRV”) in April 2007. As the materiality of these segments increased, NMA has been identified as a reportable operating segment since the three months ended June 30, 2007 and JSRV has been identified as a reportable operating segment since the six months ended September 30, 2007. The NMA segment is comprised of Nidec Motors & Actuators (Germany) GmbH and other subsidiaries in Europe and North America which primarily produce and sell in-car motors. It applies mainly International Financial Reporting Standards (IFRS). The JSRV segment is comprised of Japan Servo Co., Ltd. in Japan which primarily produces and sells DC motors, fans and other small precision motors. It applies Japanese GAAP.
As a result, our segmental data has not been prepared under U.S. GAAP on a basis that is consistent with our consolidated financial statements or on any other single basis that is consistent between segments. While there are several differences between U.S. GAAP and the underlying accounting principles used by the sixteen operating segments, the principal differences that affect segmental operating profit or loss are accounting for pension and severance costs, directors’ bonuses and leases. We believe that the monthly segmental information is available on a timely basis and that it is sufficiently accurate at the segment profit and loss level for us to manage our business.
41
NIDEC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(Unaudited)
The following tables show revenue from external customers and other financial information by operating segment for the three months and for the nine months ended December 31, 2006 and 2007, respectively:
Business segment
Yen in millions | U.S. dollars in thousands | ||||||||
For the three months ended December 31 | For the three months ended December 31, | ||||||||
Revenue from external customers: | 2006 | 2007 | 2007 | ||||||
NCJ | ¥ 23,952 | ¥ 23,894 | $ 209,321 | ||||||
NET | 18,560 | 27,820 | 243,714 | ||||||
NCC | 4,218 | 3,299 | 28,901 | ||||||
NCD | 862 | 1,064 | 9,321 | ||||||
NCS | 11,509 | 12,581 | 110,215 | ||||||
NCH | 9,424 | 11,076 | 97,030 | ||||||
NCF | 1,692 | 1,665 | 14,586 | ||||||
NSNK | 15,110 | 14,561 | 127,560 | ||||||
NCPL | 17,014 | 16,364 | 143,355 | ||||||
NTSC | 5,520 | 6,639 | 58,160 | ||||||
NCEL | 4,668 | 6,366 | 55,769 | ||||||
JSRV | - | 6,927 | 60,683 | ||||||
NSBC | 3,862 | 3,928 | 34,411 | ||||||
NSCJ | 2,808 | 2,836 | 24,845 | ||||||
NMA | - | 8,709 | 76,294 | ||||||
NNSN | 2,761 | 2,788 | 24,424 | ||||||
All Others | 35,134 | 42,813 | 375,060 | ||||||
Total | 157,094 | 193,330 | 1,693,649 | ||||||
Consolidated adjustments related to elimination of intercompany transactions via third party | (74 | ) | 0 | 0 | |||||
Others * | 2,284 | 2,957 | 25,904 | ||||||
Consolidated total | ¥ 159,304 | ¥ 196,287 | $ 1,719,553 | ||||||
* The revenues of subsidiaries not included in management reports due to their immateriality are main components of Others.
42
NIDEC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(Unaudited)
Business segment
Yen in millions | U.S. dollars in thousands | ||||||||
For the nine months ended December 31 | For the nine months ended December 31, | ||||||||
Revenue from external customers: | 2006 | 2007 | 2007 | ||||||
NCJ | ¥ 66,249 | ¥ 71,329 | $ 624,871 | ||||||
NET | 48,223 | 71,092 | 622,795 | ||||||
NCC | 11,491 | 10,696 | 93,701 | ||||||
NCD | 2,814 | 3,231 | 28,305 | ||||||
NCS | 38,824 | 34,468 | 301,954 | ||||||
NCH | 25,140 | 30,178 | 264,371 | ||||||
NCF | 4,247 | 4,333 | 37,959 | ||||||
NSNK | 50,327 | 42,314 | 370,688 | ||||||
NCPL | 47,280 | 48,159 | 421,892 | ||||||
NTSC | 16,399 | 18,756 | 164,310 | ||||||
NCEL | 14,915 | 16,636 | 145,738 | ||||||
JSRV | - | 19,057 | 166,947 | ||||||
NSBC | 11,402 | 12,593 | 110,320 | ||||||
NSCJ | 8,044 | 8,305 | 72,755 | ||||||
NMA | - | 27,403 | 240,061 | ||||||
NNSN | 7,992 | 7,966 | 69,785 | ||||||
All Others | 101,341 | 127,797 | 1,119,553 | ||||||
Total | 454,688 | 554,313 | 4,856,005 | ||||||
Consolidated adjustments related to elimination of intercompany transactions via third party | (260 | ) | (49 | ) | (429 | ) | |||
Others * | 4,713 | 4,724 | 41,384 | ||||||
Consolidated total | ¥ 459,141 | ¥ 558,988 | $ 4,896,960 | ||||||
* The revenues of subsidiaries not included in management reports due to their immateriality are main components of Others.
43
NIDEC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(Unaudited)
Yen in millions | U.S. dollars in thousands | ||||||||
For the three months ended December 31 | For the three months ended December 31, | ||||||||
2006 | 2007 | 2007 | |||||||
Revenue from other operating segments: | |||||||||
NCJ | ¥ 21,770 | ¥ 27,887 | $ 244,301 | ||||||
NET | 4,701 | 9,223 | 80,797 | ||||||
NCC | 1,266 | 3,149 | 27,587 | ||||||
NCD | 11,644 | 11,221 | 98,300 | ||||||
NCS | 242 | 75 | 657 | ||||||
NCH | 1,090 | 1,407 | 12,326 | ||||||
NCF | 10,751 | 10,909 | 95,567 | ||||||
NSNK | 3,355 | 3,363 | 29,461 | ||||||
NCPL | 1,994 | 1,821 | 15,953 | ||||||
NTSC | 76 | 63 | 552 | ||||||
NCEL | 729 | 1,046 | 9,163 | ||||||
JSRV | - | 936 | 8,200 | ||||||
NSBC | 989 | 740 | 6,483 | ||||||
NSCJ | 773 | 637 | 5,580 | ||||||
NMA | - | 117 | 1,025 | ||||||
NNSN | 211 | 198 | 1,735 | ||||||
All Others | 51,389 | 59,092 | 517,670 | ||||||
Total | 110,980 | 131,884 | 1,155,357 | ||||||
Intersegment elimination | (110,980 | ) | (131,884 | ) | (1,155,357 | ) | |||
Consolidated total | - | - | - | ||||||
44
NIDEC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(Unaudited)
Yen in millions | U.S. dollars in thousands | ||||||||
For the nine months ended December 31 | For the nine months ended December 31, | ||||||||
2006 | 2007 | 2007 | |||||||
Revenue from other operating segments: | |||||||||
NCJ | ¥ 68,508 | ¥ 76,211 | $ 667,639 | ||||||
NET | 15,270 | 24,464 | 214,314 | ||||||
NCC | 3,886 | 7,887 | 69,093 | ||||||
NCD | 35,975 | 35,294 | 309,190 | ||||||
NCS | 277 | 164 | 1,437 | ||||||
NCH | 3,310 | 3,305 | 28,953 | ||||||
NCF | 30,795 | 32,926 | 288,445 | ||||||
NSNK | 10,074 | 10,314 | 90,355 | ||||||
NCPL | 6,565 | 4,861 | 42,584 | ||||||
NTSC | 284 | 227 | 1,989 | ||||||
NCEL | 2,241 | 2,939 | 25,747 | ||||||
JSRV | - | 2,693 | 23,592 | ||||||
NSBC | 2,253 | 2,536 | 22,216 | ||||||
NSCJ | 1,991 | 1,889 | 16,548 | ||||||
NMA | - | 157 | 1,375 | ||||||
NNSN | 597 | 633 | 5,545 | ||||||
All Others | 151,285 | 176,980 | 1,550,417 | ||||||
Total | 333,311 | 383,480 | 3,359,439 | ||||||
Intersegment elimination | (333,311 | ) | (383,480 | ) | (3,359,439 | ) | |||
Consolidated total | - | - | - | ||||||
45
NIDEC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(Unaudited)
Yen in millions | U.S. dollars in thousands | ||||||||
For the three months ended December 31 | For the three months ended December 31, | ||||||||
2006 | 2007 | 2007 | |||||||
Segment profit or loss: | |||||||||
NCJ | ¥ 2,931 | ¥ 4,814 | $ 42,173 | ||||||
NET | 2,972 | 3,969 | 34,770 | ||||||
NCC | 89 | 260 | 2,278 | ||||||
NCD | 1,212 | 1,156 | 10,127 | ||||||
NCS | 350 | 409 | 3,583 | ||||||
NCH | 81 | 183 | 1,603 | ||||||
NCF | 1,260 | 1,163 | 10,188 | ||||||
NSNK | 1,489 | 1,246 | 10,915 | ||||||
NCPL | 984 | 716 | 6,272 | ||||||
NTSC | 493 | 521 | 4,564 | ||||||
NCEL | 589 | 1,283 | 11,240 | ||||||
JSRV | - | 52 | 456 | ||||||
NSBC | (46 | ) | (96 | ) | (841 | ) | |||
NSCJ | 517 | 314 | 2,751 | ||||||
NMA | - | 194 | 1,700 | ||||||
NNSN | 144 | 160 | 1,402 | ||||||
All Others | 3,157 | 6,294 | 55,137 | ||||||
Total | 16,222 | 22,638 | 198,318 | ||||||
U.S. GAAP adjustments to accrue pension and severance costs | (31 | ) | (119 | ) | (1,042 | ) | |||
Consolidation adjustments mainly related to elimination of intercompany profits | 704 | 349 | 3,057 | ||||||
Reclassification *1 | (797 | ) | 1,462 | 12,808 | |||||
Others *2 | 933 | (1,256 | ) | (11,003 | ) | ||||
Consolidated total | ¥ 17,031 | ¥ 23,074 | $ 202,138 | ||||||
*1 Some items are reclassified from other expenses (income) and included in operating expenses (income). Reclassification mainly includes loss on disposals of fixed assets for the period ended December 31, 2006 and gain from sales of fixed assets for the period ended December 31, 2007.
*2 Profit or loss of subsidiaries not included in management reports due to their immateriality are main components of Others. Furthermore, Others includes amortization of capitalized assets related to the business acquisition for the period ended December 31, 2007.
46
NIDEC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(Unaudited)
Yen in millions | U.S. dollars in thousands | ||||||||
For the nine months ended December 31 | For the nine months ended December 31, | ||||||||
2006 | 2007 | 2007 | |||||||
Segment profit or loss: | |||||||||
NCJ | ¥ 8,558 | ¥ 11,751 | $ 102,943 | ||||||
NET | 8,263 | 8,895 | 77,924 | ||||||
NCC | 121 | 985 | 8,629 | ||||||
NCD | 3,344 | 3,817 | 33,438 | ||||||
NCS | 1,171 | 1,036 | 9,076 | ||||||
NCH | 266 | 454 | 3,977 | ||||||
NCF | 2,894 | 3,539 | 31,003 | ||||||
NSNK | 6,285 | 3,360 | 29,435 | ||||||
NCPL | 2,627 | 2,324 | 20,359 | ||||||
NTSC | 1,253 | 1,231 | 10,784 | ||||||
NCEL | 2,165 | 2,749 | 24,082 | ||||||
JSRV | - | 318 | 2,786 | ||||||
NSBC | (13 | ) | (100 | ) | (876 | ) | |||
NSCJ | 1,096 | 892 | 7,814 | ||||||
JSRV | - | 326 | 2,856 | ||||||
NNSN | 396 | 405 | 3,548 | ||||||
All Others | 10,026 | 16,274 | 142,568 | ||||||
Total | 48,452 | 58,256 | 510,346 | ||||||
U.S. GAAP adjustments to accrue pension and severance costs | (94 | ) | (367 | ) | (3,215 | ) | |||
Consolidation adjustments mainly related to elimination of intercompany profits | 921 | (743 | ) | (6,509 | ) | ||||
Reclassification *1 | (467 | ) | 2,979 | 26,097 | |||||
Others *2 | 265 | (2,975 | ) | (26,062 | ) | ||||
Consolidated total | ¥ 49,077 | ¥ 57,150 | $ 500,657 | ||||||
*1 Some items are reclassified from other expenses (income) and included in operating expenses (income). Reclassification mainly includes loss on disposals of fixed assets for the period ended December 31, 2006 and gains due to reversal of allowance for doubtful account for the period ended December 31, 2007.
*2 Profit or loss of subsidiaries not included in management reports due to their immateriality are main components of Others. Furthermore, Others includes amortization of capitalized assets related to the business acquisition for the period ended December 31, 2007.
47
NIDEC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(Unaudited)
12. Subsequent event:
Repurchase of shares-
On February 1, 2008, NIDEC resolved at a meeting of its Board of Directors to repurchase its own shares (“Share Repurchase”), pursuant to Article 459, Paragraph 1, Item 1 of the Company Law of Japan.
Details of Share Repurchase | |
Class of shares: | Common stock |
Total number of shares to repurchase: | Up to 1,000,000 shares 0.69% of the total number of shares issued |
Total repurchase amount: | Up to 6 billion yen |
Period of repurchase: | From February 4, 2008 to February 3, 2009 |
(Reference) Total number of shares issued and treasury stock as of January 31, 2008: Total number of shares issued (excluding treasury stock): 144,940,223 shares Treasury stock: 47,269 shares |
Settlement in lawsuit-
On February 8, 2008, NIDEC has agreed with Victor Company of Japan, Limited (“JVC”) on a settlement in the pending U.S. lawsuits.
On February 15, 2005, NIDEC filed a lawsuit against JVC in the United States District Court for the Northern District of California for infringement of its U.S. patents (Nos. 5,667,309, 6,554,476, 6,343,877 and 6,793,394) with respect to NIDEC’s fluid dynamic bearing technology used in hard disc drive spindle motors. In response, JVC filed an antitrust lawsuit against NIDEC in the United States District Court for the Middle District of California on October 5, 2007.
The agreement prepared the two parties to withdraw the stated lawsuits presently pending in the respective United States District Court. In this connection, NIDEC and JVC have entered into a cross-licensing agreement whereby the two companies share their patent rights regarding certain types of spindle motors (other than those using the sintered-alloy-metal bearing system) for 3.5-inch-diameter hard disk drives.
48