FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 under
the Securities Exchange Act of 1934
For the month of July, 2007
Commission File Number: 000-12713
NEC CORPORATION
(Translation of registrant’s name into English)
7-1, Shiba 5-chome, Minato-ku, Tokyo, 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 whether the registrant by furnishing the information contained in this Form 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
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
NEC Corporation | ||
(Registrant) | ||
By | /S/ FUJIO OKADA | |
Fujio Okada | ||
Associate Senior Vice President |
Date: July 31, 2007
July 31, 2007
Consolidated Financial Results for the First Quarter of the
Fiscal Year Ending March 31, 2008
I. Consolidated Financial Results
Three Months Ended June 30, 2007 | Three Months Ended June 30, 2006 | Change | ||||
In billions of yen | In billions of yen | % | ||||
Sales | 1,007.8 | 1,031.5 | -2.3 | |||
Operating income | 11.3 | 7.9 | +42.5 | |||
Ordinary income | 8.2 | 2.7 | +203.4 | |||
Net income | 1.0 | 0.3 | +272.8 | |||
Yen | Yen | Yen | ||||
Net income per share: | ||||||
Basic | 0.41 | 0.12 | 0.29 | |||
Diluted | 0.40 | 0.12 | 0.28 |
As of June 30, 2007 | As of March 31, 2007 | Change | ||||
In billions of yen | In billions of yen | % | ||||
Total assets | 3,583.4 | 3,731.7 | -4.0 | |||
Net assets | 1,249.6 | 1,240.1 | +0.8 |
Notes
1. | NEC changed the accounting principles for preparing its consolidated financial statements from accounting principles generally accepted in the U.S. (“U.S. GAAP”) to accounting principles generally accepted in Japan (“Japan GAAP”) from the first half of the fiscal year ended March 31, 2007. Results for the first quarter of the fiscal year ended March 31, 2007 (April – June, 2006) have been presented under Japan GAAP for comparison purposes. |
2. | Number of consolidated subsidiaries and affiliated companies accounted for by the equity method is as follows: |
As of June 30, 2007 | As of June 30, 2006 | As of March 31, 2007 | ||||
Consolidated subsidiaries | 338 | 372 | 342 | |||
Affiliated companies accounted for by the equity method | 68 | 69 | 68 |
1. | Analysis of Business Results |
(1)Overview of the first quarter of the fiscal year ending March 31, 2008 (three months ended June 30, 2007)
During the three months ended June 30, 2007, despite a downturn in the U.S. economy owing mainly to a slowdown in the housing sector, the global economy experienced moderate growth overall, with sustained high growth in China, and steady growth in Asia and Europe.
The Japanese economy also enjoyed continued steady growth due to a sustained increase in capital expenditures, amid an improvement in business results and a recovery in consumer spending, as a result of an improvement in the employment environment.
Amid this business environment, NEC recorded consolidated sales of 1,007.8 billion yen for the first quarter, a decrease of 23.7 billion yen (2.3%) year on year. Despite an increase in sales, in the Information Technology (“IT”)/Network Solutions business, particularly of network systems to enterprises and telecom carriers overseas, the year on year decrease is mainly due to the streamlining of the Mobile Terminal business overseas and the sale of the personal computer (“PC”) business in Europe in the second half of the previous fiscal year by the Personal Solutions business, in the Mobile/Personal Solutions business.
Regarding profitability, operating income rose by 3.4 billion yen (42.5%) year on year, to 11.3 billion yen. This was due to a decrease in loss owing to streamlining of the Mobile Terminals business overseas and an increase in income from increased development efficiencies in the area of Mobile Terminals in the Mobile/Personal Solutions business, despite a drop in profit in the IT/Network Solutions business due to a change in the product mix in the area of Network Systems.
NEC recorded an improvement in non-operating income and expenses of 2.1 billion yen year on year, mainly owing to an improvement of 4.5 billion yen in foreign exchange gains and losses, despite a worsening of 3.4 billion yen in equity in earnings and losses of affiliated companies. As a result, ordinary income increased by 5.5 billion yen year on year, to 8.2 billion yen.
Income before income taxes and minority interests was 12.0 billion yen, an amount in line with the corresponding period of the previous fiscal year. This was mainly due to a decrease in special gains of 5.7 billion yen year on year, as a result of the recording of 6.5 billion yen in gains on transfer of securities to the pension trust in the corresponding period of the previous fiscal year, despite an increase in ordinary income.
NEC recorded consolidated net income of 1.0 billion yen, an increase of 0.7 billion yen year on year.
(2)Results by business segments (including inter-segment transactions and profit/loss figures)
Sales and operating income of NEC’s main segments were as follows (figures in brackets denote increases or decreases as compared with the corresponding period of the previous fiscal year):
IT/Network Solutions Business
Sales: | 572.5 billion yen | (+4.2%) | ||
Operating income: | 15.6 billion yen | (-14.1 billion yen) |
Sales by subsegment (including inter-segment transactions)
Subsegment | Three Months Ended June 30, 2007 | Three Months Ended June 30, 2006 | Change | |||
In billions of yen | In billions of yen | % | ||||
IT Services/System Integration | 159.9 | 146.2 | +9.4 | |||
IT Platforms | 111.4 | 122.3 | -8.9 | |||
Network Systems | 247.4 | 226.7 | +9.1 | |||
Social Infrastructure | 53.8 | 54.3 | -0.9 | |||
Total | 572.5 | 549.5 | +4.2 | |||
Sales of the IT/Network Solutions business for the three months ended June 30, 2007 amounted to 572.5 billion yen, an increase of 22.9 billion yen (4.2%) year on year.
Sales by products and services were as follows:
The area of IT Services/System Integration recorded sales of 159.9 billion yen, an increase of 9.4% year on year, due to a steady increase in sales to most sectors including the financial sector. In addition, in the area of Network Systems, sales increased by 9.1% year on year, to 247.4 billion yen, as a result of good sales of network systems to enterprises and telecom carriers overseas. On the other hand, in the area of IT Platforms, sales fell by 8.9% year on year, to 111.4 billion yen, mainly owing to the impact of the transfer of the sales function of optical disc drives and the effect of large server orders in the first quarter of the previous fiscal year. In the area of Social Infrastructure, sales remained flat year on year at 53.8 billion yen.
Operating income decreased by 14.1 billion yen (47.5%) year on year, to 15.6 billion yen. This was mainly due to a change in the product mix in the area of Network Systems.
Mobile/Personal Solutions Business
Sales: | 211.3 billion yen | (- 16.8%) | ||
Operating income: | 9.6 billion yen | (Improvement of 25.8 billion yen) |
Sales by subsegment (including inter-segment transactions)
Subsegment | Three Months Ended June 30, 2007 | Three Months Ended June 30, 2006 | Change | |||
In billions of yen | In billions of yen | % | ||||
Mobile Terminals | 84.0 | 93.3 | -10.0 | |||
Personal Solutions | 127.3 | 160.7 | -20.8 | |||
Total | 211.3 | 254.0 | -16.8 | |||
Sales of the Mobile/Personal Solutions business for the three months ended June 30, 2007 were 211.3 billion yen, a decrease of 42.7 billion yen (16.8%) year on year.
Sales by products and services were as follows:
In the area of Mobile Terminals, sales were 84.0 billion yen, a decrease of 10.0% year on year, due to streamlining of overseas business. In the area of Personal Solutions, sales fell by 20.8% year on year, to 127.3 billion yen. This was mainly due to the sale of the PC business in Europe.
Operating income improved 25.8 billion yen year on year, to 9.6 billion yen. This was due to completion of structural reform of overseas business in the area of Mobile Terminals, which put an end to expanding losses, and to increased development efficiencies.
Electron Devices Business
Sales: | 205.9 billion yen | (+ 0.2%) | ||
Operating loss: | 4.4 billion yen | (-0.3 billion yen) |
Sales by subsegment (including inter-segment transaction)
Subsegment | Three Months Ended June 30, 2007 | Three Months Ended June 30, 2006 | Change | |||
In billions of yen | In billions of yen | % | ||||
Semiconductors | 173.6 | 165.2 | 5.1 | |||
Electronic Components and Others | 32.3 | 40.2 | -19.7 | |||
Total | 205.9 | 205.4 | 0.2 | |||
Sales of the Electron Devices business for the three months ended June 30, 2007 remained flat year on year at 205.9 billion yen.
Sales by products and services were as follows:
In the area of Semiconductors, sales increased 5.1% year on year, to 173.6 billion yen, owing mainly to an increase in sales of semiconductors for game consoles and PCs. In the area of Electronic Components and Others, sales amounted to 32.3 billion yen, a decrease of 19.7% year on year, due to a decrease in sales of small-sized LCDs, despite steady growth in the electronic components market overall.
Although there was a decrease in operating loss owing to an increase in sales in the area of Semiconductors, in addition to a decrease in research and development expenses, the Electron Devices business recorded an operating loss of 4.4 billion yen, an amount in line with that of corresponding period of the previous fiscal year, due to a decrease in sales in the area of Electronic Components and Others.
Note
The results for the area of Semiconductors are the official public figures of NEC Electronics Corporation, which are prepared in accordance with U.S. GAAP. The difference that arises as a result of the adjustment to Japan GAAP is included in Electronic Components and Others.
2. Analysis of Financial Condition
(1)Analysis of condition of assets, liabilities, net assets, and cash flow
Total assets were 3,583.4 billion yen as of June 30, 2007. This was a decrease of 148.3 billion yen as compared with the end of the previous fiscal year. Current assets as of June 30, 2007 were 1904.0 billion yen, a decrease of 143.7 billion yen as compared with the end of the previous fiscal year, mainly due to collection of notes and accounts receivable, trade. Although investment securities increased 11.6 billion yen owing to an increase in unrealized gain accompanying an upturn in the market value, fixed assets decreased 4.6 billion yen due to a decrease in tangible fixed assets of 8.5 billion yen and in long-term deferred tax assets of 8.1 billion yen.
Total liabilities as of June 30, 2007 were 2,333.7 billion yen, a decrease of 157.8 billion yen as compared with the end of the previous fiscal year, mainly as a result of the payment of notes and accounts payable, trade. The balance of interest-bearing debt was 869.5 billion yen as of June 30, 2007, an increase of 10.2 billion yen as compared with the end of the previous fiscal year. Debt-equity ratio as of June 30, 2007 was 0.83 (no change as compared with the end of the previous fiscal year). The balance of interest-bearing debt (net) as of June 30, 2007, obtained by offsetting the balance of interest-bearing debt with the balance of cash and cash equivalents, amounted to 467.4 billion yen, an increase of 31.4 billion yen as compared with the end of the previous fiscal year. Net debt-equity ratio as of June 30, 2007 was 0.45 (a worsening of 0.03 points as compared with the end of the previous fiscal year).
Total net assets as of June 30, 2007 were 1,249.6 billion yen, an increase of 9.5 billion yen as compared with the end of the previous fiscal year. As a result, owner’s equity ratio as of June 30, 2007 was 29.2% (an improvement of 1.4 points as compared with the end of the previous fiscal year).
Net cash provided by operating activities for the three months ended June 30, 2007 was 1.8 billion yen, an increase of 29.3 billion yen year on year. Although there was a decrease in cash received owing to a fall in sales, this was mainly due to a decrease in cash used in payment of material costs as a result of cost reductions.
Net cash used in investing activities for the three months ended June 30, 2007 was 26.1 billion yen, an improvement of 16.8 billion yen year on year. This was mainly due to cash provided by the transfer of business and a decrease in cash used for acquisition of stock of affiliated companies. As a result, free cash flows (the sum of cash flows from operating activities and investing activities) for the three months ended June 30, 2007 were cash outflows of 24.3 billion yen, an improvement of 46.1 billion yen as compared with the corresponding period of the previous fiscal year.
Net cash used in financing activities for the three months ended June 30, 2007 was 2.0 billion yen. This was mainly due to the redemption of bonds and the payment of dividends, despite the issuance of commercial paper. As a result, cash and cash equivalents as of June 30, 2007 amounted to 402.1 billion yen, a decrease of 21.3 billion yen as compared with the end of the previous fiscal year.
3. Financial Forecast
There is no change to the forecast for the fiscal year ending March 31, 2008, previously disclosed on May 21, 2007.
4. Others
(1)Significant changes in scope of consolidation
There are no significant changes in scope of consolidation for the quarter ended June 30, 2007.
(2)Adoption of concise accounting policies
Parts of physical inventory are omitted. Concise accounting methods have been adopted for the part of the retirement benefit obligation, depreciation expenses and others.
(3)Changes in accounting methods from most recent consolidated fiscal year
In accordance with changes in corporate tax law, some domestic subsidiaries adopted the (new) 250 percent declining-balance method for tangible fixed assets acquired after April 1, 2007, where the depreciation rate is calculated by multiplying the depreciation rate of the straight-line method by 2.5.
The change had little effect on the consolidated statement of operations and segment information.
CONSOLIDATED BALANCE SHEETS
(In millions of yen, millions of U.S.dollars) | |||||||||||||||||||
June 30, 2007 | June 30, 2006 | Increase (Decrease) | (Ref.) March 31, 2007 | Increase (Decrease) | June 30, 2007 | ||||||||||||||
Current assets | JPY 1,903,952 | JPY 1,936,326 | (JPY 32,374 | ) | JPY 2,047,681 | (JPY 143,729 | ) | $ | 15,479 | ||||||||||
Cash and deposits | 333,376 | 346,540 | (13,164 | ) | 332,446 | 930 | 2,710 | ||||||||||||
Notes and accounts receivable, trade | 706,766 | 678,603 | 28,163 | 874,543 | (167,777 | ) | 5,746 | ||||||||||||
Marketable securities | 69,264 | 69,439 | (175 | ) | 91,570 | (22,306 | ) | 563 | |||||||||||
Inventories | 545,617 | 569,405 | (23,788 | ) | 493,224 | 52,393 | 4,436 | ||||||||||||
Deferred tax assets | 114,656 | 102,713 | 11,943 | 114,560 | 96 | 932 | |||||||||||||
Others | 143,742 | 179,469 | (35,727 | ) | 150,895 | (7,153 | ) | 1,169 | |||||||||||
Allowance for doubtful accounts | (9,469 | ) | (9,843 | ) | 374 | (9,557 | ) | 88 | (77 | ) | |||||||||
Fixed assets | 1,679,417 | 1,700,180 | (20,763 | ) | 1,683,988 | (4,571 | ) | 13,654 | |||||||||||
Tangible fixed assets | 676,005 | 685,959 | (9,954 | ) | 684,529 | (8,524 | ) | 5,496 | |||||||||||
Buildings and structures | 236,513 | 241,349 | (4,836 | ) | 238,677 | (2,164 | ) | 1,923 | |||||||||||
Machinery and equipment | 210,394 | 203,821 | 6,573 | 214,833 | (4,439 | ) | 1,711 | ||||||||||||
Tools and other equipment | 103,970 | 102,946 | 1,024 | 104,925 | (955 | ) | 845 | ||||||||||||
Land | 91,004 | 92,447 | (1,443 | ) | 92,203 | (1,199 | ) | 740 | |||||||||||
Construction in progress | 34,124 | 45,396 | (11,272 | ) | 33,891 | 233 | 277 | ||||||||||||
Intangible assets | 218,575 | 240,123 | (21,548 | ) | 221,991 | (3,416 | ) | 1,777 | |||||||||||
Goodwill | 87,551 | 91,298 | (3,747 | ) | 89,566 | (2,015 | ) | 712 | |||||||||||
Software | 122,794 | 140,411 | (17,617 | ) | 126,339 | (3,545 | ) | 998 | |||||||||||
Others | 8,230 | 8,414 | (184 | ) | 6,086 | 2,144 | 67 | ||||||||||||
Investments and other assets | 784,837 | 774,098 | 10,739 | 777,468 | 7,369 | 6,381 | |||||||||||||
Investment securities | 242,069 | 240,059 | 2,010 | 230,504 | 11,565 | 1,968 | |||||||||||||
Investments in affiliated companies | 220,974 | 115,491 | 105,483 | 221,864 | (890 | ) | 1,797 | ||||||||||||
Deferred tax assets | 152,740 | 217,913 | (65,173 | ) | 160,810 | (8,070 | ) | 1,242 | |||||||||||
Others | 186,120 | 224,337 | (38,217 | ) | 181,098 | 5,022 | 1,513 | ||||||||||||
Allowance for doubtful accounts | (17,066 | ) | (23,702 | ) | 6,636 | (16,808 | ) | (258 | ) | (139 | ) | ||||||||
Total assets | JPY 3,583,369 | JPY 3,636,506 | (JPY 53,137 | ) | JPY 3,731,669 | (JPY 148,300 | ) | $ | 29,133 | ||||||||||
Cash and cash equivalents in CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS are calculated as follows. | |||||||||||||||||||
(In millions of yen, millions of U.S.dollars) | |||||||||||||||||||
Cash and deposits | JPY 333,376 | JPY 346,540 | (JPY 13,164 | ) | JPY 332,446 | JPY 930 | $ | 2,710 | |||||||||||
Marketable securities | 69,264 | 69,439 | (175 | ) | 91,570 | (22,306 | ) | 563 | |||||||||||
Time deposits and marketable securities | (523 | ) | (539 | ) | 16 | (647 | ) | 124 | (4 | ) | |||||||||
Cash and cash equivalents | JPY 402,117 | JPY 415,440 | (JPY 13,323 | ) | JPY 423,369 | (JPY 21,252 | ) | $ | 3,269 |
(Note)
* | US dollar amounts are translated from yen, for convenience only, at the rate of US$1 = 123 yen. |
CONSOLIDATED BALANCE SHEETS (CONTINUED)
(In millions of yen, millions of U.S.dollars) | |||||||||||||||||||
June 30, 2007 | June 30, 2006 | Increase (Decrease) | (Ref.) March 31, 2007 | Increase (Decrease) | June 30, 2007 | ||||||||||||||
Current liabilities | JPY 1,576,878 | JPY 1,575,071 | JPY 1,807 | JPY 1,695,479 | (JPY 118,601 | ) | $ | 12,820 | |||||||||||
Notes and accounts payable, trade | 672,284 | 686,996 | (14,712 | ) | 786,899 | (114,615 | ) | 5,466 | |||||||||||
Short-term borrowings | 114,735 | 106,284 | 8,451 | 110,385 | 4,350 | 933 | |||||||||||||
Commercial papers | 159,794 | 80,000 | 79,794 | 102,943 | 56,851 | 1,299 | |||||||||||||
Current portion of long-term borrowings | 40,793 | 30,305 | 10,488 | 41,562 | (769 | ) | 332 | ||||||||||||
Current portion of bonds and convertible bonds | 74,255 | 175,268 | (101,013 | ) | 76,570 | (2,315 | ) | 604 | |||||||||||
Accrued expenses | 225,936 | 219,686 | 6,250 | 285,039 | (59,103 | ) | 1,837 | ||||||||||||
Advances from customers | 80,033 | 60,915 | 19,118 | 66,730 | 13,303 | 651 | |||||||||||||
Reserve for bonuses to directors | 118 | 49 | 69 | 401 | (283 | ) | 1 | ||||||||||||
Product warranty liabilities | 36,433 | 9,594 | 26,839 | 34,459 | 1,974 | 296 | |||||||||||||
Others | 172,497 | 205,974 | (33,477 | ) | 190,491 | (17,994 | ) | 1,401 | |||||||||||
Long-term liabilities | 756,850 | 830,595 | (73,745 | ) | 796,067 | (39,217 | ) | 6,153 | |||||||||||
Bonds, convertible bonds, and bonds with stock subscription rights | 399,271 | 473,756 | (74,485 | ) | 443,219 | (43,948 | ) | 3,246 | |||||||||||
Long-term borrowings | 40,164 | 72,014 | (31,850 | ) | 42,759 | (2,595 | ) | 327 | |||||||||||
Deferred tax liabilities | 12,807 | 9,384 | 3,423 | 11,424 | 1,383 | 104 | |||||||||||||
Liabilities for retirement benefits | 219,769 | 199,304 | 20,465 | 216,769 | 3,000 | 1,787 | |||||||||||||
Provision for loss on repurchase of computers | 15,247 | 19,097 | (3,850 | ) | 16,355 | (1,108 | ) | 124 | |||||||||||
Long-term product warranty liabilities | 2,163 | 695 | 1,468 | 2,380 | (217 | ) | 18 | ||||||||||||
Provision for recycling expenses of personal computers | 5,902 | 6,764 | (862 | ) | 5,634 | 268 | 48 | ||||||||||||
Others | 61,527 | 49,581 | 11,946 | 57,527 | 4,000 | 499 | |||||||||||||
Total liabilities | 2,333,728 | 2,405,666 | (71,938 | ) | 2,491,546 | (157,818 | ) | 18,973 | |||||||||||
Total shareholders’ equity | 965,451 | 967,771 | (2,320 | ) | 972,438 | (6,987 | ) | 7,849 | |||||||||||
Common stock | 337,936 | 337,821 | 115 | 337,822 | 114 | 2,747 | |||||||||||||
Capital surplus | 464,925 | 464,990 | (65 | ) | 464,838 | 87 | 3,780 | ||||||||||||
Retained earnings | 165,874 | 167,890 | (2,016 | ) | 173,003 | (7,129 | ) | 1,349 | |||||||||||
Treasury stock | (3,284 | ) | (2,930 | ) | (354 | ) | (3,225 | ) | (59 | ) | (27 | ) | |||||||
Valuation and translation adjustments and others | 80,283 | 60,509 | 19,774 | 66,370 | 13,913 | 653 | |||||||||||||
Unrealized gains (losses) on available-for-sale securities | 62,325 | 65,811 | (3,486 | ) | 57,706 | 4,619 | 507 | ||||||||||||
Unrealized gains (losses) on derivative financial instruments | 296 | (192 | ) | 488 | (143 | ) | 439 | 2 | |||||||||||
Foreign currency translation adjustments | 17,662 | (5,110 | ) | 22,772 | 8,807 | 8,855 | 144 | ||||||||||||
Stock subscription rights | 90 | — | 90 | 81 | 9 | 1 | |||||||||||||
Minority interests | 203,817 | 202,560 | 1,257 | 201,234 | 2,583 | 1,657 | |||||||||||||
Total net assets | 1,249,641 | 1,230,840 | 18,801 | 1,240,123 | 9,518 | 10,160 | |||||||||||||
Total liabilities and net assets | JPY 3,583,369 | JPY 3,636,506 | (JPY 53,137 | ) | JPY 3,731,669 | (JPY 148,300 | ) | $ | 29,133 | ||||||||||
Interest-bearing debt | JPY 869,482 | JPY 976,961 | (JPY 107,479 | ) | JPY 859,292 | JPY 10,190 | $ | 7,069 | |||||||||||
Net interest-bearing debt (*1) | 467,365 | 561,521 | (94,156 | ) | 435,923 | 31,442 | 3,800 | ||||||||||||
Owner’s equity (*2) | 1,045,734 | 1,028,280 | 17,454 | 1,038,808 | 6,926 | 8,502 | |||||||||||||
Owner’s equity ratio (%) (*3) | 29.2 | 28.3 | 0.9 | 27.8 | 1.4 | ||||||||||||||
Shareholders’ equity ratio (%) (*3) | 26.9 | 26.6 | 0.3 | 26.1 | 0.8 | ||||||||||||||
Debt-equity ratio (times) (*4) | 0.83 | 0.95 | (0.12 | ) | 0.83 | 0.00 | |||||||||||||
Net debt-equity ratio (times) (*4) | 0.45 | 0.55 | (0.10 | ) | 0.42 | 0.03 |
(Notes)
*1 | Net interest-bearing debt is interest-bearing debt less cash and cash equivalents. |
*2 | Owner’s equity is total net assets less stock subscription rights and minority interests. |
*3 | Owner’s equity ratio is owner’s equity divided by total assets. Shareholders’ equity ratio is shareholders’ equity divided by total assets. |
*4 | Debt-equity ratio and net debt-equity ratio are interest-bearing debt and net interest-bearing debt divided by owner’s equity, respectively. |
CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions of yen, millions of U.S. dollars) | ||||||||||||||||||||||||||
Three months ended June 30 | 2007 | (% of net sales) | 2006 | (% of net sales) | Increase (Decrease) | (% of Increase | (Ref.) Fiscal 2006 | (% of net sales) | 2007 | |||||||||||||||||
Sales | JPY 1,007,801 | (100.0 | ) | JPY 1,031,468 | (100.0 | ) | (JPY 23,667 | ) | (-2.3 | ) | JPY 4,652,649 | (100.0 | ) | $ | 8,194 | |||||||||||
Cost of sales | 681,571 | (67.6 | ) | 715,060 | (69.3 | ) | (33,489 | ) | (-4.7 | ) | 3,242,459 | (69.7 | ) | 5,542 | ||||||||||||
Gross profit | 326,230 | (32.4 | ) | 316,408 | (30.7 | ) | 9,822 | (3.1 | ) | 1,410,190 | (30.3 | ) | 2,652 | |||||||||||||
Selling, general and administrative expenses | 314,899 | (31.3 | ) | 308,459 | (29.9 | ) | 6,440 | (2.1 | ) | 1,340,214 | (28.8 | ) | 2,560 | |||||||||||||
Operating income | 11,331 | (1.1 | ) | 7,949 | (0.8 | ) | 3,382 | (42.5 | ) | 69,976 | (1.5 | ) | 92 | |||||||||||||
Non-operating income | 11,435 | (1.1 | ) | 8,570 | (0.8 | ) | 2,865 | (33.4 | ) | 26,195 | (0.6 | ) | 93 | |||||||||||||
Interest income | 2,077 | 1,812 | 265 | 8,951 | 17 | |||||||||||||||||||||
Dividend income | 1,529 | 1,392 | 137 | 3,622 | 12 | |||||||||||||||||||||
Equity in earnings of affiliated companies | — | 744 | (744 | ) | — | — | ||||||||||||||||||||
Foreign exchange gain | 2,474 | — | 2,474 | — | 20 | |||||||||||||||||||||
Others | 5,355 | 4,622 | 733 | 13,622 | 44 | |||||||||||||||||||||
Non-operating expenses | 14,526 | (1.4 | ) | 13,803 | (1.3 | ) | 723 | (5.2 | ) | 79,824 | (1.7 | ) | 118 | |||||||||||||
Interest expense | 3,853 | 3,981 | (128 | ) | 16,161 | 31 | ||||||||||||||||||||
Retirement benefit expenses | 3,435 | 3,493 | (58 | ) | 13,863 | 28 | ||||||||||||||||||||
Equity in losses of affiliated companies | 2,674 | — | 2,674 | 4,006 | 22 | |||||||||||||||||||||
Foreign exchange loss | — | 2,028 | (2,028 | ) | 2,622 | — | ||||||||||||||||||||
Others | 4,564 | 4,301 | 263 | 43,172 | 37 | |||||||||||||||||||||
Ordinary income | 8,240 | (0.8 | ) | 2,716 | (0.3 | ) | 5,524 | (203.4 | ) | 16,347 | (0.4 | ) | 67 | |||||||||||||
Special gains | 5,796 | (0.6 | ) | 11,446 | (1.1 | ) | (5,650 | ) | (-49.4 | ) | 115,155 | (2.5 | ) | 47 | ||||||||||||
Gain on business transfer | 3,248 | — | 3,248 | — | 26 | |||||||||||||||||||||
Gain on sales of investment securities | 1,300 | 1,448 | (148 | ) | 25,651 | 11 | ||||||||||||||||||||
Gain on sales of tangible fixed assets | 1,089 | — | 1,089 | 2,872 | 9 | |||||||||||||||||||||
Gain on sales of investments in affiliated companies | 159 | — | 159 | 41 | 1 | |||||||||||||||||||||
Gain on transfer of securities to the pension trust | — | 6,534 | (6,534 | ) | 6,534 | — | ||||||||||||||||||||
Gain on change in interests in consolidated and affiliated companies | — | 3,464 | (3,464 | ) | 8,630 | — | ||||||||||||||||||||
Gain on reversion of securities from the pension trust | — | — | — | 69,533 | — | |||||||||||||||||||||
Reversal of provision for recycling expenses of ?personal computers | — | — | — | 1,892 | — | |||||||||||||||||||||
Gain on lapse of stock subscription rights | — | — | — | 2 | — | |||||||||||||||||||||
Special losses | 2,002 | (0.2 | ) | 2,190 | (0.2 | ) | (188 | ) | (-8.6 | ) | 35,205 | (0.8 | ) | 16 | ||||||||||||
Cost of corrective measures for products | 1,613 | — | 1,613 | 4,695 | 13 | |||||||||||||||||||||
Loss on sales of investments in affiliated companies | 201 | — | 201 | 661 | 2 | |||||||||||||||||||||
Loss on devaluation of investment securities | 188 | 151 | 37 | 10,058 | 1 | |||||||||||||||||||||
Restructuring charges | — | 2,039 | (2,039 | ) | 15,805 | — | ||||||||||||||||||||
Impairment loss on fixed assets | — | — | — | 2,768 | — | |||||||||||||||||||||
Other retirement benefit expenses | — | — | — | 991 | — | |||||||||||||||||||||
Loss on sales of tangible fixed assets | — | — | — | 208 | — | |||||||||||||||||||||
Loss on sales of investment securities | — | — | — | 19 | — | |||||||||||||||||||||
Income before income taxes and minority interests | 12,034 | (1.2 | ) | 11,972 | (1.2 | ) | 62 | (0.5 | ) | 96,297 | (2.1 | ) | 98 | |||||||||||||
Provision for income taxes | 10,825 | (1.1 | ) | 12,800 | (1.3 | ) | (1,975 | ) | (-15.4 | ) | 92,970 | (2.0 | ) | 88 | ||||||||||||
Minority interests in net income (loss) of consolidated subsidiaries | 236 | (0.0 | ) | (1,089 | ) | (-0.1 | ) | 1,325 | — | (5,801 | ) | (-0.1 | ) | 2 | ||||||||||||
Net income | JPY 973 | (0.1 | ) | JPY 261 | (0.0 | ) | JPY 712 | (272.8 | ) | JPY 9,128 | (0.2 | ) | $ | 8 | ||||||||||||
CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS
Three months ended June 30, 2007 (From April 1, 2007 to June 30, 2007) | (In millions of yen) | |||||||||||||||
Shareholders’ equity | ||||||||||||||||
Common stock | Capital surplus | Retained earnings | Treasury stock | Total shareholders’ equity | ||||||||||||
Balances as of March 31, 2007 | 337,822 | 464,838 | 173,003 | (3,225 | ) | 972,438 | ||||||||||
Changes during the period | ||||||||||||||||
Conversion of convertible bonds with stock | 114 | 114 | 228 | |||||||||||||
Dividends | (8,102 | ) | (8,102 | ) | ||||||||||||
Net income | 973 | 973 | ||||||||||||||
Repurchases of treasury stock | (93 | ) | (93 | ) | ||||||||||||
Disposals of treasury stock | (27 | ) | 33 | 7 | ||||||||||||
Net changes in items other than shareholders’ equity during the period | — | |||||||||||||||
Total changes during the period | 114 | 87 | (7,129 | ) | (59 | ) | (6,987 | ) | ||||||||
Balances as of June 30, 2007 | 337,936 | 464,925 | 165,874 | (3,284 | ) | 965,451 |
Valuation and translation adjustments and others | Stock subscription rights | Minority interests | Total net assets | |||||||||||
Unrealized gains (losses) on available-for-sale securities | Unrealized gains (losses) on derivative financial instruments | Foreign currency translation adjustments | ||||||||||||
Balances as of March 31, 2007 | 57,706 | (143 | ) | 8,807 | 81 | 201,234 | 1,240,123 | |||||||
Changes during the period | ||||||||||||||
Conversion of convertible bonds with stock subscription rights | 228 | |||||||||||||
Dividends | (8,102 | ) | ||||||||||||
Net income | 973 | |||||||||||||
Repurchases of treasury stock | (93 | ) | ||||||||||||
Disposals of treasury stock | 7 | |||||||||||||
Net changes in items other than shareholders’ equity during the period | 4,619 | 439 | 8,855 | 9 | 2,583 | 16,505 | ||||||||
Total changes during the period | 4,619 | 439 | 8,855 | 9 | 2,583 | 9,518 | ||||||||
Balances as of June 30, 2007 | 62,325 | 296 | 17,662 | 90 | 203,817 | 1,249,641 |
CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
Three months ended June 30, 2006 (From April 1, 2006 to June 30,2006) | (In millions of yen) | |||||||||||||||
Shareholders’ equity | ||||||||||||||||
Common stock | Capital surplus | Retained earnings | Treasury stock | Total shareholders’ equity | ||||||||||||
Balances as of March 31, 2006 | 337,821 | 441,155 | 173,808 | (2,869 | ) | 949,915 | ||||||||||
Changes during the period | ||||||||||||||||
Increase due to stock-for-stock exchange | 24,382 | 24,382 | ||||||||||||||
Bonuses to directors | (200 | ) | (200 | ) | ||||||||||||
Dividends | (5,979 | ) | (5,979 | ) | ||||||||||||
Net income | 261 | 261 | ||||||||||||||
Repurchases of treasury stock | (74 | ) | (74 | ) | ||||||||||||
Disposals of treasury stock | 13 | 13 | ||||||||||||||
Others | (547 | ) | (547 | ) | ||||||||||||
Net changes in items other than shareholders’ equity during the period | — | |||||||||||||||
Total changes during the period | — | 23,835 | (5,918 | ) | (61 | ) | 17,856 | |||||||||
Balances as of June 30, 2006 | 337,821 | 464,990 | 167,890 | (2,930 | ) | 967,771 |
Valuation and translation adjustments and others | Stock subscription rights | Minority interests | Total net assets | ||||||||||||||
Unrealized gains (losses) on available-for-sale securities | Unrealized gains (losses) on derivative financial instruments | Foreign currency translation adjustments | |||||||||||||||
Balances as of March 31, 2006 | 78,128 | — | 1,764 | — | 212,843 | 1,242,650 | |||||||||||
Changes during the period | |||||||||||||||||
Increase due to stock-for-stock exchange | 24,382 | ||||||||||||||||
Bonuses to directors | (200 | ) | |||||||||||||||
Dividends | (5,979 | ) | |||||||||||||||
Net income | 261 | ||||||||||||||||
Repurchases of treasury stock | (74 | ) | |||||||||||||||
Disposals of treasury stock | 13 | ||||||||||||||||
Others | (547 | ) | |||||||||||||||
Net changes in items other than shareholders’ equity during the period | (12,317 | ) | (192 | ) | (6,874 | ) | (10,283 | ) | (29,666 | ) | |||||||
Total changes during the period | (12,317 | ) | (192 | ) | (6,874 | ) | — | (10,283 | ) | (11,810 | ) | ||||||
Balances as of June 30, 2006 | 65,811 | (192 | ) | (5,110 | ) | — | 202,560 | 1,230,840 |
CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
(Ref.) Fiscal year ended March 31, 2007 (From April 1, 2006 to March 31, 2007) | (In millions of yen) | |||||||||||||
Shareholders’ equity | ||||||||||||||
Common stock | Capital surplus | Retained earnings | Treasury stock | Total shareholders’ equity | ||||||||||
Balances as of March 31, 2006 | 337,821 | 441,155 | 173,808 | (2,869 | ) | 949,915 | ||||||||
Changes during the period | ||||||||||||||
Increase due to stock-for-stock exchange | 24,382 | 24,382 | ||||||||||||
Conversion of convertible bonds with stock subscription rights | 1 | 1 | 2 | |||||||||||
Bonuses to directors | (200 | ) | (200 | ) | ||||||||||
Dividends | (14,081 | ) | (14,081 | ) | ||||||||||
Net income | 9,128 | 9,128 | ||||||||||||
Repurchases of treasury stock | (558 | ) | (558 | ) | ||||||||||
Disposals of treasury stock | (153 | ) | 202 | 49 | ||||||||||
Effect of change in scope of affiliated companies accounted for by the equity method | 4,348 | 4,348 | ||||||||||||
Others | (547 | ) | (547 | ) | ||||||||||
Net changes in items other than shareholders’ equity during the period | — | |||||||||||||
Total changes during the period | 1 | 23,683 | (805 | ) | (356 | ) | 22,523 | |||||||
Balances as of March 31, 2007 | 337,822 | 464,838 | 173,003 | (3,225 | ) | 972,438 |
Valuation and translation adjustments and others | Stock subscription rights | Minority interests | Total net assets | |||||||||||||
Unrealized gains (losses) on available-for-sale securities | Unrealized gains (losses) on derivative financial instruments | Foreign currency translation adjustments | ||||||||||||||
Balances as of March 31, 2006 | 78,128 | — | 1,764 | — | 212,843 | 1,242,650 | ||||||||||
Changes during the period | ||||||||||||||||
Increase due to stock-for-stock exchange | 24,382 | |||||||||||||||
Conversion of convertible bonds with stock subscription rights | 2 | |||||||||||||||
Bonuses to directors | (200 | ) | ||||||||||||||
Dividends | (14,081 | ) | ||||||||||||||
Net income | 9,128 | |||||||||||||||
Repurchases of treasury stock | (558 | ) | ||||||||||||||
Disposals of treasury stock | 49 | |||||||||||||||
Effect of change in scope of affiliated companies accounted for by the equity method | 4,348 | |||||||||||||||
Others | (547 | ) | ||||||||||||||
Net changes in items other than shareholders’ equity during the period | (20,422 | ) | (143 | ) | 7,043 | 81 | (11,609 | ) | (25,050 | ) | ||||||
Total changes during the period | (20,422 | ) | (143 | ) | 7,043 | 81 | (11,609 | ) | (2,527 | ) | ||||||
Balances as of March 31, 2007 | 57,706 | (143 | ) | 8,807 | 81 | 201,234 | 1,240,123 |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions of yen, millions of U.S. dollars) | ||||||||||||||||||||
Three months ended June 30 | 2007 | 2006 | Increase (Decrease) | (Ref.) Fiscal 2006 | 2007 | |||||||||||||||
I. Cash flows from operating activities: | ||||||||||||||||||||
Income before income taxes and minority interests | JPY | 12,034 | JPY | 11,972 | JPY | 62 | JPY | 96,297 | $ | 98 | ||||||||||
Depreciation and amortization | 44,586 | 43,140 | 1,446 | 198,398 | 362 | |||||||||||||||
Equity in (earnings) losses of affiliated companies | 2,674 | (744 | ) | 3,418 | 4,006 | 22 | ||||||||||||||
Gain on change in interests in consolidated subsidiaries and affiliated companies | — | (3,464 | ) | 3,464 | (8,630 | ) | — | |||||||||||||
Decrease (increase) in notes and accounts receivable, trade | 172,404 | 185,505 | (13,101 | ) | (31,524 | ) | 1,402 | |||||||||||||
Decrease (increase) in inventories | (53,200 | ) | (75,545 | ) | 22,345 | (14,098 | ) | (433 | ) | |||||||||||
Increase (decrease) in notes and accounts payable, trade | (116,309 | ) | (139,641 | ) | 23,332 | (24,413 | ) | (946 | ) | |||||||||||
Income taxes paid | (18,949 | ) | (14,863 | ) | (4,086 | ) | (28,107 | ) | (154 | ) | ||||||||||
Others, net | (41,392 | ) | (33,842 | ) | (7,550 | ) | 46,389 | (336 | ) | |||||||||||
Net cash provided by (used in) operating activities | 1,848 | (27,482 | ) | 29,330 | 238,318 | 15 | ||||||||||||||
II. Cash flows from investing activities: | ||||||||||||||||||||
Net payment of acquisitions and sales of tangible fixed assets | (24,228 | ) | (25,029 | ) | 801 | (136,499 | ) | (197 | ) | |||||||||||
Acquisitions of intangible assets | (9,869 | ) | (10,626 | ) | 757 | (36,262 | ) | (80 | ) | |||||||||||
Net proceeds from (payment of) purchases and sales of securities | (598 | ) | (6,022 | ) | 5,424 | 3,751 | (5 | ) | ||||||||||||
Others, net | 8,595 | (1,205 | ) | 9,800 | (666 | ) | 70 | |||||||||||||
Net cash used in investing activities | (26,100 | ) | (42,882 | ) | 16,782 | (169,676 | ) | (212 | ) | |||||||||||
III. Cash flows from financing activities: | ||||||||||||||||||||
Net proceeds from (payment of) bonds and borrowings | 6,451 | 36,983 | (30,532 | ) | (101,458 | ) | 52 | |||||||||||||
Dividends paid | (7,307 | ) | (4,946 | ) | (2,361 | ) | (14,060 | ) | (59 | ) | ||||||||||
Others, net | (1,101 | ) | 931 | (2,032 | ) | 11,779 | (9 | ) | ||||||||||||
Net cash provided by (used in) financing activities | (1,957 | ) | 32,968 | (34,925 | ) | (103,739 | ) | (16 | ) | |||||||||||
IV. Effect of exchange rate changes on cash and cash equivalents | 4,957 | 466 | 4,491 | 6,096 | 40 | |||||||||||||||
V. Net decrease in cash and cash equivalents | (21,252 | ) | (36,930 | ) | 15,678 | (29,001 | ) | (173 | ) | |||||||||||
VI. Cash and cash equivalents at beginning of period | 423,369 | 452,370 | (29,001 | ) | 452,370 | 3,442 | ||||||||||||||
VII. Cash and cash equivalents at end of period | JPY | 402,117 | JPY | 415,440 | (JPY | 13,323 | ) | JPY | 423,369 | $ | 3,269 | |||||||||
Free cash flows (I+II) | (JPY | 24,252 | ) | (JPY | 70,364 | ) | JPY | 46,112 | JPY | 68,642 | $ | (197 | ) | |||||||
SEGMENT INFORMATION
[Business segment information]
Three months ended June 30, 2007 (From April 1, 2007 to June 30, 2007) | |||||||||||||||||
(In millions of yen) | |||||||||||||||||
IT/Network Solutions Business | Mobile/ Personal Solutions Business | Electron Devices Business | Others | Total before Eliminations/ Corporate | Eliminations/ Corporate | Consolidated total | |||||||||||
Sales | |||||||||||||||||
1. Sales to customers | 551,119 | 177,936 | 193,796 | 84,950 | 1,007,801 | — | 1,007,801 | ||||||||||
2. Intersegment sales and transfers | 21,346 | 33,336 | 12,119 | 32,080 | 98,881 | (98,881 | ) | — | |||||||||
Total sales | 572,465 | 211,272 | 205,915 | 117,030 | 1,106,682 | (98,881 | ) | 1,007,801 | |||||||||
Operating expenses | 556,881 | 201,657 | 210,288 | 115,872 | 1,084,698 | (88,228 | ) | 996,470 | |||||||||
Operating income (loss) | 15,584 | 9,615 | (4,373 | ) | 1,158 | 21,984 | (10,653 | ) | 11,331 | ||||||||
Three months ended June 30, 2006 (From April 1, 2006 to June 30, 2006) | |||||||||||||||||
(In millions of yen) | |||||||||||||||||
IT/Network Solutions Business | Mobile/ Personal Solutions Business | Electron Devices Business | Others | Total before Eliminations/ Corporate | Eliminations/ Corporate | Consolidated total | |||||||||||
Sales | |||||||||||||||||
1. Sales to customers | 530,284 | 215,997 | 197,090 | 88,097 | 1,031,468 | — | 1,031,468 | ||||||||||
2. Intersegment sales and transfers | 19,261 | 37,970 | 8,338 | 40,102 | 105,671 | (105,671 | ) | — | |||||||||
Total sales | 549,545 | 253,967 | 205,428 | 128,199 | 1,137,139 | (105,671 | ) | 1,031,468 | |||||||||
Operating expenses | 519,886 | 270,141 | 209,491 | 121,020 | 1,120,538 | (97,019 | ) | 1,023,519 | |||||||||
Operating income (loss) | 29,659 | (16,174 | ) | (4,063 | ) | 7,179 | 16,601 | (8,652 | ) | 7,949 | |||||||
(Reference) Fiscal year ended March 31, 2007 (From April 1, 2006 to March 31, 2007) | |||||||||||||||||
(In millions of yen) | |||||||||||||||||
IT/Network Solutions Business | Mobile/ Personal Solutions Business | Electron Devices Business | Others | Total before Eliminations/ Corporate | Eliminations/ Corporate | Consolidated total | |||||||||||
Sales | |||||||||||||||||
1. Sales to customers | 2,659,774 | 801,692 | 816,918 | 374,265 | 4,652,649 | — | 4,652,649 | ||||||||||
2. Intersegment sales and transfers | 99,032 | 163,311 | 44,083 | 174,401 | 480,827 | (480,827 | ) | — | |||||||||
Total sales | 2,758,806 | 965,003 | 861,001 | 548,666 | 5,133,476 | (480,827 | ) | 4,652,649 | |||||||||
Operating expenses | 2,604,742 | 998,493 | 884,036 | 530,928 | 5,018,199 | (435,526 | ) | 4,582,673 | |||||||||
Operating income (loss) | 154,064 | (33,490 | ) | (23,035 | ) | 17,738 | 115,277 | (45,301 | ) | 69,976 | |||||||
Three months ended June 30, 2007 (From April 1, 2007 to June 30, 2007) | |||||||||||||||||
(In millions of U.S. dollars) | |||||||||||||||||
IT/Network Solutions Business | Mobile/ Personal Solutions Business | Electron Devices Business | Others | Total before Eliminations/ Corporate | Eliminations/ Corporate | Consolidated total | |||||||||||
Sales | |||||||||||||||||
1. Sales to customers | 4,481 | 1,447 | 1,576 | 690 | 8,194 | — | 8,194 | ||||||||||
2. Intersegment sales and transfers | 173 | 271 | 98 | 261 | 803 | (803 | ) | — | |||||||||
Total sales | 4,654 | 1,718 | 1,674 | 951 | 8,997 | (803 | ) | 8,194 | |||||||||
Operating expenses | 4,527 | 1,640 | 1,710 | 941 | 8,818 | (716 | ) | 8,102 | |||||||||
Operating income (loss) | 127 | 78 | (36 | ) | 10 | 179 | (87 | ) | 92 |
(Notes)
* | The business segments are defined based on similarity of types, characteristics, and affinity of sales market of products and services. |
* | Major services and products for each business segment |
IT/Network Solutions Business | System Construction, Consulting, Outsourcing, Support (Maintenance), Servers, Storage products, Professional workstations, Business PCs, IT software, Enterprise network systems, Network systems for telecommunications carriers, Broadcast video systems, Control systems, Aerospace/Defense systems | |
Mobile/Personal Solutions Business | Mobile handsets, Personal computers, Personal communication devices, BIGLOBE | |
Electron Devices Business | System LSI and other semiconductors, Electronic components, LCD modules |
* | Unallocable operating expenses included in “Eliminations / Corporate “ for three months ended June 30, 2007, 2006 and fiscal year ended March 31, 2007 are ¥8,868 million ($72 million), ¥8,435 million, and ¥47,136 million respectively. The main components of such expenses are both general and administrative expenses incurred at headquarters of the Company and research and development expenses. |
SEGMENT INFORMATION (CONTINUED)
[Geographical segment]
Three months ended June 30, 2007 (From April 1, 2007 to June 30, 2007) | ||||||||||||||||||
(In millions of yen) | ||||||||||||||||||
Japan | Asia | Europe | Others | Total before Eliminations/ Corporate | Eliminations/ Corporate | Consolidated total | ||||||||||||
Sales | ||||||||||||||||||
1. Sales to customers | 801,574 | 63,716 | 65,063 | 77,448 | 1,007,801 | — | 1,007,801 | |||||||||||
2. Intersegment sales and transfers | 97,515 | 42,236 | 1,770 | 6,392 | 147,913 | (147,913 | ) | — | ||||||||||
Total sales | 899,089 | 105,952 | 66,833 | 83,840 | 1,155,714 | (147,913 | ) | 1,007,801 | ||||||||||
Operating expenses | 890,461 | 103,617 | 66,182 | 88,513 | 1,148,773 | (152,303 | ) | 996,470 | ||||||||||
Operating income (loss) | 8,628 | 2,335 | 651 | (4,673 | ) | 6,941 | 4,390 | 11,331 | ||||||||||
Three months ended June 30, 2006 (From April 1, 2006 to June 30, 2006) | ||||||||||||||||||
(In millions of yen) | ||||||||||||||||||
Japan | Asia | Europe | Others | Total before Eliminations/ Corporate | Eliminations/ Corporate | Consolidated total | ||||||||||||
Sales | ||||||||||||||||||
1. Sales to customers | 788,819 | 61,565 | 99,485 | 81,599 | 1,031,468 | — | 1,031,468 | |||||||||||
2. Intersegment sales and transfers | 105,964 | 39,052 | 2,690 | 7,010 | 154,716 | (154,716 | ) | — | ||||||||||
Total sales | 894,783 | 100,617 | 102,175 | 88,609 | 1,186,184 | (154,716 | ) | 1,031,468 | ||||||||||
Operating expenses | 888,746 | 100,878 | 103,675 | 88,787 | 1,182,086 | (158,567 | ) | 1,023,519 | ||||||||||
Operating income (loss) | 6,037 | (261 | ) | (1,500 | ) | (178 | ) | 4,098 | 3,851 | 7,949 | ||||||||
(Reference) Fiscal year ended March 31, 2007 (From April 1, 2006 to March 31, 2007) | ||||||||||||||||||
(In millions of yen) | ||||||||||||||||||
Japan | Asia | Europe | Others | Total before Eliminations/ Corporate | Eliminations/ Corporate | Consolidated total | ||||||||||||
Sales | ||||||||||||||||||
1. Sales to customers | 3,683,325 | 261,430 | 387,962 | 319,932 | 4,652,649 | — | 4,652,649 | |||||||||||
2. Intersegment sales and transfers | 418,520 | 176,751 | 17,255 | 28,357 | 640,883 | (640,883 | ) | — | ||||||||||
Total sales | 4,101,845 | 438,181 | 405,217 | 348,289 | 5,293,532 | (640,883 | ) | 4,652,649 | ||||||||||
Operating expenses | 4,024,759 | 434,941 | 409,139 | 350,335 | 5,219,174 | (636,501 | ) | 4,582,673 | ||||||||||
Operating income (loss) | 77,086 | 3,240 | (3,922 | ) | (2,046 | ) | 74,358 | (4,382 | ) | 69,976 | ||||||||
Three months ended June 30, 2007 (From April 1, 2007 to June 30, 2007) | ||||||||||||||||||
(In millions of U.S. dollars) | ||||||||||||||||||
Japan | Asia | Europe | Others | Total before Eliminations/ Corporate | Eliminations/ Corporate | Consolidated total | ||||||||||||
Sales | ||||||||||||||||||
1. Sales to customers | 6,517 | 518 | 529 | 630 | 8,194 | — | 8,194 | |||||||||||
2. Intersegment sales and transfers | 793 | 343 | 14 | 52 | 1,202 | (1,202 | ) | — | ||||||||||
Total sales | 7,310 | 861 | 543 | 682 | 9,396 | (1,202 | ) | 8,194 | ||||||||||
Operating expenses | 7,240 | 842 | 538 | 720 | 9,340 | (1,238 | ) | 8,102 | ||||||||||
Operating income (loss) | 70 | 19 | 5 | (38 | ) | 56 | 36 | 92 |
(Notes)
* | Geographical distances are considered in classification of country or region. |
* | Changes in geographic segmentation |
The figure in Asia is being segregated from this fiscal year as the importance of this area has increased. These figures were previously included in Others.
In the above geographical segmentation for the three months ended June 30, 2006 and the fiscal year ended March 31, 2007, the figures in Asia are categorized separately from Others accordingly.
* | Major countries and regions in segments other than Japan |
(1) Asia … China, Chinese Taipei, India, Singapore, and Indonesia
(2) Europe … U.K., France, the Netherlands, Germany, Italy, and Spain
(3) Others … U.S.A.
SEGMENT INFORMATION (CONTINUED)
[Overseas sales]
Three months ended June 30, 2007 (From April 1, 2007 to June 30, 2007) | ||||||||
(In millions of yen) | ||||||||
Asia | Europe | Others | Total | |||||
Overseas sales | 115,313 | 72,008 | 89,683 | 277,004 | ||||
Consolidated sales | — | — | — | 1,007,801 | ||||
Percentage of overseas sales to consolidated sales (%) | 11.4 | 7.1 | 9.0 | 27.5 | ||||
Three months ended June 30, 2006 (From April 1, 2006 to June 30, 2006) | ||||||||
(In millions of yen) | ||||||||
Asia | Europe | Others | Total | |||||
Overseas sales | 100,835 | 110,838 | 84,521 | 296,194 | ||||
Consolidated sales | — | — | — | 1,031,468 | ||||
Percentage of overseas sales to consolidated sales (%) | 9.8 | 10.7 | 8.2 | 28.7 | ||||
(Reference) Fiscal year ended March 31, 2007 (From April 1, 2006 to March 31, 2007) | ||||||||
(In millions of yen) | ||||||||
Asia | Europe | Others | Total | |||||
Overseas sales | 421,949 | 448,487 | 343,249 | 1,213,685 | ||||
Consolidated sales | — | — | — | 4,652,649 | ||||
Percentage of overseas sales to consolidated sales (%) | 9.1 | 9.6 | 7.4 | 26.1 | ||||
Three months ended June 30, 2007 (From April 1, 2007 to June 30, 2007) | ||||||||
(In millions of U.S. dollars) | ||||||||
Asia | Europe | Others | Total | |||||
Overseas sales | 938 | 585 | 729 | 2,252 | ||||
Consolidated sales | — | — | — | 8,194 |
(Notes)
* | Geographical distances are considered in classification of country or region. |
* | Changes in regional segmentation |
The figure in Asia is being segregated from this fiscal year as the importance of this area has increased. These figures were previously included
in Others. In the above geographical segmentation for the three months ended June 30, 2006 and the fiscal year ended March 31, 2007, the figures in Asia are categorized separately from Others accordingly.
* | Major countries and regions in segments other than Japan |
(1) Asia ...China, Chinese Taipei, India, Singapore, and Indonesia
(2) Europe...U.K., France, the Netherlands, Germany, Italy, and Spain
(3) Others ...U.S.A.
* | Overseas sales represent sales of the Company and its consolidated subsidiaries to countries and regions outside of Japan. |
CAUTIONARY STATEMENTS:
This material contains forward-looking statements pertaining to strategies, financial targets, technology, products and services, and business performance of NEC Corporation and its consolidated subsidiaries (collectively “NEC”). Written forward-looking statements may appear in other documents that NEC files with stock exchanges or regulatory authorities, such as the U.S. Securities and Exchange Commission, and in reports to shareholders and other communications. The U.S. Private Securities Litigation Reform Act of 1995 contains, and other applicable laws may contain, a safe-harbor for forward-looking statements, on which NEC relies in making these disclosures. Some of the forward-looking statements can be identified by the use of forward-looking words such as “believes,” “expects,” “may,” “will,” “should,” “seeks,” “intends,” “plans,” “estimates,” “targets,” “aims,” or “anticipates,” or the negative of those words, or other comparable words or phrases. You can also identify forward-looking statements by discussions of strategy, beliefs, plans, targets, or intentions. Forward-looking statements necessarily depend on currently available assumptions, data, or methods that may be incorrect or imprecise and NEC may not be able to realize the results expected by them. You should not place undue reliance on forward-looking statements, which reflect NEC’s analysis and expectations only. Forward-looking statements are not guarantees of future performance and involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those in the forward-looking statements. Among the factors that could cause actual results to differ materially from such statements include (i) uncertainty relating to NEC’s ongoing analysis necessary to prepare the financial statements for inclusion in the 2006 Form 20-F, (ii) global economic conditions and general economic conditions in NEC’s markets, (iii) fluctuating demand for, and competitive pricing pressure on, NEC’s products and services, (iv) NEC’s ability to continue to win acceptance of NEC’s products and services in highly competitive markets, (v) NEC’s ability to expand into foreign markets, such as China, (vi) regulatory change and uncertainty and potential legal liability relating to NEC’s business and operations, (vii) NEC’s ability to restructure, or otherwise adjust, its operations to reflect changing market conditions, and (viii) movement of currency exchange rates, particularly the rate between the yen and the U.S. dollar. Any forward-looking statements speak only as of the date on which they are made. New risks and uncertainties come up from time to time, and it is impossible for NEC to predict these events or how they may affect NEC. NEC does not undertake any obligation to update or revise any of the forward-looking statements, whether as a result of new information, future events, or otherwise.
The management targets, included in this material, are not projections, and do not represent management’s current estimates of future performance. Rather, they represent targets that management will strive to achieve through the successful implementation of NEC’s business strategies.
Finally, NEC cautions you that the statements made in this material are not an offer of securities for sale. The securities may not be offered or sold in any jurisdiction in which registration is required absent registration or an exemption from registration under the applicable securities laws. For example, any public offering of securities to be made in the United States must be registered under the U.S. Securities Act of 1933 and made by means of an English language prospectus that contains detailed information about NEC and management, as well as NEC’s financial statements.
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Contacts: Diane Foley/Makoto Miyakawa
Corporate Communications Division
NEC Corporation
+81-3-3798-6511