Exhibit 99.1
October 24, 2006
NEC Corporation
Kaoru Yano, President
(Tokyo Stock Exchange, 1st Section;
Code Number 6701)
NEC TO ADOPT JAPANESE ACCOUNTING PRINCIPLES FOR CONSOLIDATED
FINANCIAL STATEMENTS
NEC Corporation ("NEC") today announced that it has changed the accounting
principles for preparing its consolidated financial statements required under
the Securities and Exchange Law of Japan and the Company Law of Japan from U.S.
GAAP to Japan GAAP, effective for the first half of the fiscal year ending
March 31, 2007 (the 6 months ended September 30, 2006) and thereafter.
NEC obtained an audit report under Japanese GAAS regarding its consolidated
financial statements for the fiscal year ended March 31, 2006, which were
prepared in accordance with U.S. GAAP, from its independent auditors, Ernst &
Young ShinNihon, for the "Yukashoken Hokokusho" (securities report) required
under the Securities and Exchange Law of Japan for the fiscal year ended March
31, 2006, which was filed with the Japanese authorities on June 22, 2006.
Subsequently, the independent auditors requested further analysis to support
the relative fair value of maintenance and support services provided as part of
multiple element contracts with respect to IT solutions while in the process of
conducting the audit under U.S. Public Company Accounting Oversight Board
standards for NEC's consolidated financial statements to be included in its
annual report on Form 20-F to be filed with the U.S. Securities and Exchange
Commission ("SEC") for the fiscal year ended March 31, 2006. On September 28,
2006, NEC announced that it would delay the filing of its 2006 Form 20-F with
the SEC. Subsequently, NEC hired a U.S.-based accounting consultant and is
currently working with the consultant to prepare the necessary analyses.
In light of these circumstances, the preparation of consolidated financial
statements in accordance with U.S. GAAP for the first half of the fiscal year
ending March 31, 2007, may take considerable time. Therefore, NEC has elected
to provide, starting with the first half of the fiscal year ending March 31,
2007, separate financial information under Japan GAAP for the purposes of its
financial results announcement ("Kessan Tanshin") and disclosure under the
Securities and Exchange Law of Japan and the Company Law of Japan. NEC plans to
announce its financial results for the first half of the fiscal year ending
March 31, 2007 in mid-November 2006. In addition, NEC will prepare and file the
"Hanki Hokokusho" (semi-annual securities report) for the first half of the
same fiscal year required under the Securities and Exchange Law of Japan in
accordance with Japan GAAP by its due date. NEC plans to prepare its
consolidated financial statements under
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the Securities and Exchange Law of Japan and the Company Law of Japan in
accordance with Japan GAAP for future financial periods also.
NEC is continuing to complete its consolidated financial statements prepared in
accordance with U.S. GAAP and audited under U.S. Public Company Accounting
Oversight Board standards to enable filing of its 2006 Form 20-F with the SEC
as promptly as possible.
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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," "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) GLOBAL ECONOMIC
CONDITIONS AND GENERAL ECONOMIC CONDITIONS IN NEC'S MARKETS, (II) FLUCTUATING
DEMAND FOR, AND COMPETITIVE PRICING PRESSURE ON, NEC'S PRODUCTS AND SERVICES,
(III) NEC'S ABILITY TO CONTINUE TO WIN ACCEPTANCE OF NEC'S PRODUCTS AND
SERVICES IN HIGHLY COMPETITIVE MARKETS, (IV) NEC'S ABILITY TO EXPAND INTO
FOREIGN MARKETS, SUCH AS CHINA, (V) REGULATORY CHANGE AND UNCERTAINTY AND
POTENTIAL LEGAL LIABILITY RELATING TO NEC'S BUSINESS AND OPERATIONS, (VI) NEC'S
ABILITY TO RESTRUCTURE, OR OTHERWISE ADJUST, ITS OPERATIONS TO REFLECT CHANGING
MARKET CONDITIONS, AND (VII) 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.
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