Edgar Filing: MITSUI & CO LTD

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FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Report of Foreign Private Issuer

Consolidated Financial Results for the Year Ended March 31, 2003

Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934

For the month of May 9 , 2003

Commission File Number 09929

Mitsui & Co., Ltd.

(Translation of registrant’s name into English)

2-1, Ohtemachi 1-chome Chiyoda-ku, Tokyo 100-0004 Japan

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

Form 20-F [ü] Form 40-F [ ]

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): _______________

Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): _______________

Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.

Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes [ ] No [ü]

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- _________________

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: May 9, 2003


		MITSUI & CO., LTD.


	By:	/S/ Tasuku Kondo

		Name: Tasuku Kondo Title: Executive Director Senior Executive Managing Officer Chief Financial Officer

TABLE OF CONTENTS


Consolidated Financial Results for the Year Ended March 31, 2003
Statements of Consolidated Income
Consolidated Balance Sheets
Statements of Consolidated Shareholders’ Equity
Statements of Consolidated Cash Flows
Basis of Financial Statements and Summary of Significant Accounting Policies
Net Income per Share
Operating Segment Information
Marketable Securities
Retirement Benefits

Consolidated Financial Results for the Year Ended March 31, 2003
(Accounting Principles Generally Accepted in the United States of America)

Mitsui & Co., Ltd. and subsidiaries
(Web Site http://www.mitsui.co.jp)

President and Chief Executive Officer, Shoei Utsuda
Investor Relations Contacts Yuji Takagi, General Manager, Corporate Communications Division TEL (03) 3285-7533

Consolidated financial results for the year ended March 31, 2003
(from April 1, 2002 to March 31, 2003)

(1)

Consolidated operating results information


						Income from continuing operations
	Total trading					before income taxes, minority interests
	transactions					and equity in earnings

	Millions of Yen		%			Millions of Yen		%




Year ended March 31, 2003		13,236,683		4.8			62,409		(1.8	)
Year ended March 31, 2002		12,634,686		(3.0	)		63,573		(22.8	)

Income from

continuing

operations before

income taxes,

minority interests

Net income

and equity in

Net income per

per share,

Return on

earnings to total

Net income

share, basic

diluted

equity

assets ratio

trading transaction ratio

Millions of Yen

Yen

Year ended March 31, 2003

31,138

(43.8

)

19.68

18.69

3.5

0.9

0.5

Year ended March 31, 2002

55,371

7.3

34.97

32.85

6.3

1.0

0.5

	Notes:

	1.		Equity in earnings of associated companies — net for the fiscal years ended March 31, 2003 and 2002 were ¥13,405 million and ¥23,783 million, respectively.

	2.		Average number of outstanding shares during the years ended March 31, 2003 and 2002 were 1,582,278,485 and 1,583,427,407, respectively.

	3.		Change in accounting principles applied: No

	4.		Percentage figures for Total trading transactions, Income from continuing operations before income taxes, minority interests and equity in earnings, and Net income represent changes from the previous year.

	5.		Parentheses represent negative figures or decreases.

	6.		Effective April 1, 2002, Mitsui & Co., Ltd. and subsidiaries (the “companies”) adopted Statement of Financial Accounting Standards (“SFAS”) No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets.” The above-mentioned figures for the fiscal year ended March 31, 2002 have been reclassified to conform to the current year presentation of the statement of consolidated income.

	7.		Total trading transactions represents gross transaction volume for Revenue — gross trading profit reported in the Statements of Consolidated Income, and is a financial measure commonly used by similar Japanese trading companies. It is a voluntary disclosure as permitted by the Emerging Issues Task Force, Issue No. 99-19, “Reporting Revenue Gross as a Principal versus Net as an Agent.”

(2)

Consolidated financial position information


			Total Shareholders'		Shareholders'		Shareholders'
	Total assets		equity		equity ratio		equity per share

	Millions of Yen		Millions of Yen		%		Yen





March 31, 2003		6,540,520		862,147		13.2		545.19
March 31, 2002		6,668,366		914,970		13.7		577.93

Note: Number of outstanding shares at March 31, 2003 and 2002 were 1,581,376,992 and 1,583,179,977, respectively.

(3)

Consolidated cash flows information

Net cash provided

Net cash provided by

Cash and cash

by operating

Net cash used in

(used in) financing

equivalents at end

activities

investing activities

activities

of year

Millions of Yen

Year ended March 31, 2003

52,148

(13,244

)

17,824

660,216

Year ended March 31, 2002

133,712

(108,212

)

(126,076

)

607,987

Forecast of consolidated operating results for the fiscal year ending March 31, 2004
(fiscal year from April 1, 2003 to March 31, 2004)


	Total trading
	transactions		Net income

	Millions of Yen		Millions of Yen



Six-month period ending September 30, 2003		5,800,000		25,000
Fiscal year ending March 31, 2004		12,200,000		65,000

Note: Forecasted basic net income per share for the fiscal year ending March 31, 2004: Yen 41.10

A Cautionary Note on Forward-Looking Statements:

This report contains statements (including figures) regarding Mitsui & Co., Ltd. (“Mitsui”)’s views of future developments that are forward-looking in nature and are not simply reiterations of historical facts. These statements are presented to inform stakeholders of the views of Mitsui’s management but should not be relied on solely in making investment and other decisions. You should be aware that a number of important risk factors could lead to outcomes that differ materially from those presented in such forward-looking statements. These include, but are not limited to, (i) change in economic conditions that may lead to unforeseen developments in markets for products handled by Mitsui, (ii) fluctuations in currency exchange rates that may cause unexpected deterioration in the value of transactions, (iii) adverse political developments that may create unavoidable delays or postponement of transactions and projects, (iv) changes in laws, regulations, or policies in any of the countries where Mitsui conducts its operations that may affect Mitsui’s ability to fulfill its commitments, and (v) significant changes in the competitive environment. In the course of its operations, Mitsui adopts measures to control these and other types of risks, but this does not constitute a guarantee that such measures will be effective.

Statements of Consolidated Income

(Millions of Yen)


										Comparison with previous period

										Increase/(Decrease)
				Year ended			Year ended
				March 31, 2003			March 31, 2002			Amount			%

Revenue — Gross Trading Profit				¥	569,802		¥	546,549		¥	23,253			4.3
	Total Trading Transactions:
		2003 ¥13,236,683 million
		2002 ¥12,634,686 million
Expenses and Other:
	Selling, general and administrative				457,803			446,013			11,790
	Provision for doubtful receivables				14,293			21,191			(6,898	)
	Interest expense, net of interest income				2,868			12,876			(10,008	)
	Dividend income				(16,267	)		(18,192	)		1,925
	Gain on sales of securities — net				(11,026	)		(31,308	)		20,282
	Gain on securities contributed to an employee retirement benefit trust				(15,831	)		(29,242	)		13,411
	Loss on the write-down of securities				37,921			43,605			(5,684	)
	Loss on disposal or sale of property and equipment — net				1,765			2,577			(812	)
	Impairment loss of long-lived assets				24,558			24,732			(174	)
	Other expense — net				11,309			10,724			585
			Total		507,393			482,976			24,417
Income from Continuing Operations before Income Taxes, Minority Interests and Equity in Earnings					62,409			63,573			(1,164	)		(1.8	)
Income Taxes
	Current				39,208			32,545			6,663
	Deferred				(1,373	)		(1,010	)		(363	)
		Total income taxes			37,835			31,535			6,300
Income from Continuing Operations before Minority Interests and Equity in Earnings					24,574			32,038			(7,464	)		(23.3	)
Minority Interests in (Earnings) Losses of Subsidiaries					(4,365	)		3,070			(7,435	)
Equity in Earnings of Associated Companies — Net (After Income Tax Effect)					13,405			23,783			(10,378	)
Income from Continuing Operations					33,614			58,891			(25,277	)		(42.9	)
Loss from Discontinued Operations — Net (After Income Tax Effect)					(2,476	)		(3,520	)		1,044
Net Income				¥	31,138		¥	55,371		¥	(24,233	)		(43.8	)

Consolidated Balance Sheets

(Millions of Yen)

Assets


				March 31,			March 31,			Increase/
				2003			2002			(Decrease)

Current Assets:
	Cash and cash equivalents			¥	660,216		¥	607,987		¥	52,229
	Time deposits				37,702			78,211			(40,509	)
	Marketable securities				99,084			102,664			(3,580	)
	Trade receivables:
		Notes and loans, less unearned interest			467,820			532,708			(64,888	)
		Accounts			1,589,379			1,560,041			29,338
		Associated companies			195,411			152,537			42,874
		Allowance for doubtful receivables			(21,236	)		(20,625	)		(611	)
	Inventories				488,672			485,147			3,525
	Advance payments to suppliers				57,090			66,785			(9,695	)
	Deferred tax assets — current				35,819			31,120			4,699
	Other current assets				221,787			187,182			34,605
		Total current assets			3,831,744			3,783,757			47,987
Investments and Non-current Receivables:
	Investments in and advances to associated companies				584,511			459,797			124,714
	Other investments				525,063			741,934			(216,871	)
	Non-current receivables less unearned interest income				674,681			805,243			(130,562	)
	Allowance for doubtful receivables				(139,793	)		(139,478	)		(315	)
	Property leased to others — at cost less accumulated depreciation				240,304			270,274			(29,970	)
			Total investments and non-current receivables		1,884,766			2,137,770			(253,004	)
Property and Equipment — at Cost:
	Land, land improvements and timberlands				232,469			230,577			1,892
	Buildings, including leasehold improvements				347,408			334,445			12,963
	Equipment and fixtures				342,012			330,426			11,586
	Vessels				19,970			19,075			895
	Projects in progress				20,801			35,791			(14,990	)
			Total		962,660			950,314			12,346
	Accumulated depreciation				(391,733	)		(364,873	)		(26,860	)
			Net property and equipment		570,927			585,441			(14,514	)
Intangible Assets, less Accumulated Amortization					71,179			45,155			26,024
Deferred Tax Assets — Non-current					53,527			24,668			28,859
Other Assets					128,377			91,575			36,802

Total				¥	6,540,520		¥	6,668,366		¥	(127,846	)

(Millions of Yen)

Liabilities and Shareholders’ Equity


				March 31,			March 31,			Increase/
				2003			2002			(Decrease)

Current Liabilities:
	Short-term loans			¥	612,645		¥	567,413		¥	45,232
	Current maturities of long-term debt				495,299			454,787			40,512
	Trade payables
	Notes and acceptances				124,276			179,129			(54,853	)
		Accounts			1,417,472			1,407,512			9,960
		Associated companies			77,033			68,926			8,107
	Accrued expenses:
		Income taxes			23,076			18,588			4,488
		Interest			23,633			27,004			(3,371	)
		Other			39,681			41,735			(2,054	)
	Advances from customers				73,155			79,387			(6,232	)
	Other current liabilities				139,060			142,195			(3,135	)
		Total current liabilities			3,025,330			2,986,676			38,654
Long-term Debt, less Current Maturities					2,500,470			2,619,867			(119,397	)
Accrued Pension Costs and Liability for Severance Indemnities					53,148			41,561			11,587
Deferred Tax Liabilities — Non-current					31,459			47,093			(15,634	)
Minority Interests					67,966			58,199			9,767
Shareholders’ Equity:
	Common stock				192,487			192,487			—
	Capital surplus				287,756			287,756			—
	Retained earnings:
		Appropriated for legal reserve			36,382			35,873			509
		Unappropriated			494,038			476,074			17,964
	Accumulated other comprehensive income (loss):
		Unrealized holding gains and losses on available-for-sale securities			3,405			44,246			(40,841	)
		Foreign currency translation adjustments			(141,053	)		(118,669	)		(22,384	)
		Minimum pension liability adjustment			(6,731	)		(373	)		(6,358	)
		Net unrealized gains and losses on derivatives			(2,759	)		(2,122	)		(637	)
			Total accumulated other comprehensive loss		(147,138	)		(76,918	)		(70,220	)
	Treasury stock, at cost				(1,378	)		(302	)		(1,076	)
			Total shareholders’ equity		862,147			914,970			(52,823	)

			Total	¥	6,540,520		¥	6,668,366		¥	(127,846	)

Statements of Consolidated Shareholders’ Equity

(Millions of Yen)


				Year ended March 31, 2003			Year ended March 31, 2002

Common Stock:
		Balance at beginning of year		¥	192,487		¥	192,487

		Balance at end of year		¥	192,487		¥	192,487

Capital Surplus:
		Balance at beginning of year		¥	287,756		¥	287,756

		Balance at end of year		¥	287,756		¥	287,756

Retained Earnings:
	Appropriated for Legal Reserve:
			Balance at beginning of year	¥	35,873		¥	34,341
			Transfer from unappropriated retained earnings		509			1,532

		Balance at end of year		¥	36,382		¥	35,873

	Unappropriated:
			Balance at beginning of year	¥	476,074		¥	437,548
			Net income		31,138			55,371
			Cash dividends paid (annual rate per share: 2003 ¥8.0; 2002 ¥8.0)		(12,665	)		(12,669	)
		Transfer to retained earnings appropriated for legal reserve			(509	)		(1,532	)
		Effect of change in fiscal year-end of certain subsidiaries			—			(2,644	)

		Balance at end of year		¥	494,038		¥	476,074

Accumulated Other Comprehensive Income (Loss) (After Income Tax Effect):
		Balance at beginning of year		¥	(76,918	)	¥	(117,705	)
		Unrealized holding gains and losses on available-for-sale securities			(40,841	)		(51,384	)
		Foreign currency translation adjustments			(22,384	)		69,057
		Minimum pension liability adjustment			(6,358	)		24,514
		Net unrealized gains and losses on derivatives			(637	)		(2,950	)
		Effect of change in fiscal year-end of certain subsidiaries			—			1,550

		Balance at end of year		¥	(147,138	)	¥	(76,918	)

Treasury stock, at cost
		Balance at beginning of year		¥	(302)		¥	—
		Purchase of treasury stock			(1,076	)		(302	)

		Balance at end of year		¥	(1,378	)	¥	(302)

Note: Appropriations of retained earnings are reflected in the financial statements for the following year upon shareholders’ approval.

(Millions of Yen)


			Year ended March 31,			Year ended March 31,
			2003			2002

Summary of Changes in Equity from Nonowner Sources (Comprehensive Income (Loss)):
	Net income		¥	31,138		¥	55,371

	Other comprehensive income (loss) (after income tax effect):
		Unrealized holding gains and losses on available-for-sale securities		(40,841	)		(51,384	)
		Foreign currency translation adjustments		(22,384	)		69,057
		Minimum pension liability adjustment		(6,358	)		24,514
		Net unrealized gains and losses on derivatives		(637	)		(2,950	)

	Changes in equity from nonowner sources		¥	(39,082	)	¥	94,608

Note:

Changes in equity from nonowner sources (“comprehensive income (loss)”) for the fiscal year ended March 31, 2002, including the effect of a change in fiscal year-end of certain subsidiaries, was ¥93,514 million. The difference between the amount and comprehensive income stated in the above table consisted of a charge to retained earnings of ¥2,644 million and a credit to accumulated other comprehensive income of ¥1,550 million to record the effect of a change in fiscal year-end of certain subsidiaries.

Statements of Consolidated Cash Flows

(Millions of Yen)


				Year ended			Year ended
				March 31, 2003			March 31, 2002

Operating Activities:
Net income				¥	31,138		¥	55,371
Adjustments to reconcile net income to net cash provided by operating activities:
	Loss from discontinued operations — net (after income tax effect)				2,476			3,520
	Depreciation and amortization				58,547			56,974
	Provision for doubtful receivables				14,293			21,191
	Equity in earnings of associated companies, less dividends received				(368	)		(14,193	)
	Deferred income taxes				(1,373	)		(1,010	)
	Gain on sales of securities — net				(11,026	)		(31,308	)
	Gain on securities contributed to an employee retirement benefit trust				(15,831	)		(29,242	)
	Loss on the write-down of securities				37,921			43,605
	Loss on disposal or sale of property and equipment — net				1,765			2,577
	Impairment loss of long-lived assets				24,558			24,732
	(Increase) decrease in trade receivables				(42,115	)		148,412
	(Increase) decrease in inventories				(27,512	)		32,586
	Decrease in trade payables				(12,703	)		(166,813	)
	Net change in accrued pension costs and liability for severance indemnities				(9,660	)		(1,725	)
	Other — net				2,038			(10,965	)

			Net cash provided by operating activities		52,148			133,712

Investing Activities:
Net decrease (increase) in time deposits					40,220			(17,102	)
Investments in and advances to associated companies					(63,769	)		(38,008	)
Collection of advances to associated companies					10,111			25,377
Acquisition of other investments					(298,515	)		(164,684	)
Proceeds from sale of other investments					331,463			103,260
Increase in long-term loan receivables					(56,169	)		(40,424	)
Collection of long-term loan receivables					84,445			61,472
Additions to property leased to others and property and equipment					(123,216	)		(89,060	)
Proceeds from sale of property leased to others and property and equipment					62,186			50,957

		Net cash used in investing activities			(13,244	)		(108,212	)

Financing Activities:
Net increase(decrease) in short-term borrowings					54,972			(89,672	)
Proceeds from long-term debt					587,753			404,629
Repayment of long-term debt					(611,150	)		(428,227	)
Acquisition of treasury stock					(1,086	)		(137	)
Payment of cash dividends					(12,665	)		(12,669	)

			Net cash provided by (used in) financing activities		17,824			(126,076	)

Effect of Exchange Rate Changes on Cash and Cash Equivalents					(4,499	)		9,433

Effect of Change in Fiscal Year-End of Certain Subsidiaries					—			(6,201	)

Net Increase (Decrease) in Cash and Cash Equivalents					52,229			(97,344	)
Cash and Cash Equivalents at Beginning of Year					607,987			705,331

Cash and Cash Equivalents at End of Year				¥	660,216		¥	607,987

Effective April 1, 2002, the companies adopted SFAS No.144. The above-mentioned figures for the fiscal year ended March 31, 2002 have been reclassified to conform to the current year presentation.

Supplemental Information:

(Millions of Yen)


			Year ended		Year ended
			March 31, 2003		March 31, 2002

Cash paid during the year for:
	Interest		¥	55,211	¥	79,614
	Income taxes			31,002		59,017
Non-cash investing and financing activities:
	Exchange of shares in connection with a business combination of investees (EITF 91-5):
		Fair market value of shares received		7,110		35,874
		Cost of shares surrendered		2,635		18,649

	Acquisition of investment by business split-off:
		Transferred assets		—		43,450
		Transferred liabilities		—		39,365
		Acquired investments		—		4,085
	Contribution of securities to an employee retirement benefit trust		¥	27,343	¥	45,770

Basis of Financial Statements and Summary of
Significant Accounting Policies

I. Basis of Financial Statements

The accompanying consolidated financial statements of Mitsui & Co., Ltd. (the “Company”) and its subsidiaries (collectively, the “companies”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S.GAAP”). The presentation of certain prior year information has been reclassified to conform to the current year presentation.

II. Summary of Significant Accounting Policies

(1) Inventories

Inventories, consisting mainly of commodities and materials for resale, are stated at the lower of cost, principally on the specific-identification basis, or market.

(2) Marketable securities and investments

The companies classify debt and marketable equity securities, at acquisition, into one of three categories: held-to-maturity, available-for-sale or trading under provisions of Statement of Financial Accounting Standards (“SFAS”) No. 115.

Trading securities are carried at fair value and unrealized holding gains and losses are included in net income.

Debt securities are classified as held-to-maturity and measured at amortized cost in the Consolidated Balance Sheets only if the companies have the positive intent and ability to hold those securities to maturity. Premium and discount amortized in the period are included in interest income.

Debt and marketable equity securities other than those classified as trading or held-to-maturity securities are classified as available-for-sale securities and carried at fair value with such unrealized holding gains and losses reported as “Unrealized holding gains and losses on available-for-sale securities” in the Shareholders’ Equity after income tax effects.

(3) Depreciation

Depreciation of property and equipment (including property leased to others) is computed principally under the declining-balance method for assets located in Japan and under the straight-line method for assets located outside Japan, using rates based upon the estimated useful lives of the related property.

(4) Pension and severance indemnities plans

The companies have pension plans and/or severance indemnities plans covering substantially all employees other than directors. The costs of the pension plans and severance indemnities plans are accrued based on amounts determined using actuarial methods.

(5) Derivative instruments and hedging activities

All derivative instruments are recognized and measured at fair value as either assets or liabilities and changes in the fair value are currently recognized in earnings or reported as “Net unrealized gains and losses on delivatives” in the Shareholders’ Equity after income tax effects, depending on the intended use of the derivative instruments and its resulting hedge designation.

(6) Business combinations and intangible assets

On April 1, 2002, the companies fully adopted SFAS No. 141, “Business Combinations” and SFAS No.142, “Goodwill and Other Intangibles Assets.” All business combinations are accounted for using the purchase method, and goodwill acquired upon business combinations and indefinite-lived intangible assets are not amortized but instead tested for impairment annually or more frequently if impairment indicators arise. The cumulative effect of a change in accounting principle on the write-off of any unamortized deferred credit related to an excess of fair value of acquired net assets over cost arising from business combinations for which the acquisition date was before July, 1, 2001 and investments accounted for by the equity method acquired before July 1, 2001 was immaterial. The companies completed the transitional impairment test

for goodwill and indefinite-lived intangible assets at April 1, 2002 and determined that the fair value of these assets was in excess of the carrying amount.

(7) Discontinued operations

On April 1, 2002, the companies adopted SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets.” The companies report the results of the discontinued operations (including gain or loss related to subsidiaries that either have been disposed of or are classified as held for sale), less applicable income taxes (benefit), as a separate line item in the Statements of Consolidated Income under “Loss from Discontinued Operations — Net (After Income Tax Effect).” The amounts in the Statements of Consolidated Income and the Statements of Consolidated Cash Flows in the previous year have been reclassified to conform to the current period presentation.

Net Income per Share

The following is a reconciliation of basic net income per share to diluted net income per share for the years ended March 31, 2003 and 2002:

Year ended March 31, 2003 (from April 1, 2002 to March 31, 2003)


	Net income		Shares
	(numerator)		(denominator)		Per share amount

	Millions of Yen		In Thousands		Yen
Basic Net Income per Share:
Net income available to common shareholders		31,138		1,582,278		19.68
Effect of Dilutive Securities:
1.5% convertible bonds redeemed on March 31, 2003		189		19,266
1.05% convertible bonds due 2009		581		105,319

Diluted Net Income per Share:
Net income available to common shareholders after effect of dilutive securities		31,908		1,706,863		18.69

Year ended March 31, 2002 (from April 1, 2001 to March 31, 2002)


	Net income		Shares
	(numerator)		(denominator)		Per share amount

	Millions of Yen		In Thousands		Yen
Basic Net Income per Share:
Net income available to common shareholders		55,371		1,583,427		34.97
Effect of Dilutive Securities:
1.5% convertible bonds due 2003		150		19,266
1.05% convertible bonds due 2009		581		105,319

Diluted Net Income per Share:
Net income available to common shareholders after effect of dilutive securities		56,102		1,708,012		32.85

Operating Segment Information

Year ended March 31, 2003 (from April 1, 2002 to March 31, 2003)
(Millions of Yen)


				Machinery,								Consumer		Domestic
		Metal Products		Electronics &								Products		Branches
		& Minerals		Information			Chemical			Energy		& Services		and Offices

Total Trading Transactions:
External customers			1,612,401		2,294,414			1,099,142			2,837,166		2,077,329		1,547,002
Intersegment			265,050		162,294			322,658			68,397		127,811		237,165

	Total		1,877,451		2,456,708			1,421,800			2,905,563		2,205,140		1,784,167

Revenue — Gross Trading Profit			70,674		117,987			60,871			53,027		105,947		41,405

Operating Income (Loss)			25,722		10,607			16,248			25,541		19,897		6,760

Net Income (Loss)			14,944		(4,916	)		(5,850	)		22,605		3,983		6,994

Total Assets at March 31, 2003			887,517		1,250,695			484,628			572,660		803,842		488,026


						Other			Corporate and			Consolidated
		Americas		Europe		Overseas Areas			Eliminations			Total

Total Trading Transactions:
External customers			786,707		355,061		577,425			50,036			13,236,683
Intersegment			485,566		224,247		729,116			(2,622,304	)		—

	Total		1,272,273		579,308		1,306,541			(2,572,268	)		13,236,683

Revenue — Gross Trading Profit			44,584		22,470		23,503			29,334			569,802

Operating Income (Loss)			9,485		4,163		(1,931	)		(18,786	)		97,706

Net Income (Loss)			3,291		2,845		6,193			(18,951	)		31,138

Total Assets at March 31, 2003			412,659		218,304		208,318			1,213,871			6,540,520

Year ended March 31, 2002 (from April 1, 2001 to March 31, 2002)
(Millions of Yen)


				Machinery,							Consumer		Domestic
		Metal Products		Electronics &							Products		Branches
		& Minerals		Information		Chemical			Energy		& Services		and Offices

Total Trading Transactions:
External customers			1,501,933		2,335,049		1,019,745			2,367,078		2,034,648		1,633,061
Intersegment			282,948		170,725		292,098			87,215		139,398		272,492

	Total		1,784,881		2,505,774		1,311,843			2,454,293		2,174,046		1,905,553

Revenue — Gross Trading Profit			67,397		112,425		53,476			48,061		108,610		47,553

Operating Income (Loss)			19,847		10,027		8,185			16,661		5,082		8,873

Net Income (Loss)			9,449		13,377		(4,893	)		22,152		2,756		6,773

Total Assets at March 31, 2002			935,835		1,419,375		511,248			459,226		863,005		538,853


						Other			Corporate and			Consolidated
		Americas		Europe		Overseas Areas			Eliminations			Total

Total Trading Transactions:
External customers			691,271		414,857		590,622			46,422			12,634,686
Intersegment			492,620		179,837		798,560			(2,715,893	)		—

	Total		1,183,891		594,694		1,389,182			(2,669,471	)		12,634,686

Revenue — Gross Trading Profit			45,096		20,623		21,929			21,379			546,549

Operating Income (Loss)			11,750		4,484		(4,700	)		(864	)		79,345

Net Income (Loss)			6,461		3,911		5,271			(9,886	)		55,371

Total Assets at March 31, 2002			400,387		232,656		241,271			1,066,510			6,668,366

Notes: 1.		From the fiscal year beginning April 1, 2002, “Electronics & Information” is combined with “Machinery,” and “Transportation Logistics,” which was included in “Consumer Products & Services” before, is included in “Corporate and Eliminations.”

		The operating segment information for the fiscal year ended March 31, 2002 has been restated to conform to the presentation for the fiscal year ended March 31, 2003.

		“Electronics & Information” included in “Machinery, Electronics & Information” for the fiscal year ended March 31, 2003 is as follows:


Total Trading Transactions	437,884
Revenue-Gross Trading Profit	46,552
Operating Income	3,506
Net Loss	(3,130	)
Total Assets	230,164

	2.		Effective April 1, 2002, the companies adopted SFAS No.144. The figures of “Consolidated Total” for the fiscal year ended March 31, 2002 have been reclassified to conform to the current year presentation. The reclassifications to “Loss from Discontinued Operations — Net (After Income Tax Effect)” are included in “Corporate and Eliminations.”

	3.		Net loss of “Corporate and Eliminations” for the fiscal year ended March 31, 2003 includes, a) a charge of ¥7,485 million for an early retirement support program, b) ¥5,814million in losses on the write-down of marketable securities, c) ¥3,142 million in losses on sale of marketable securities (all amounts are after income tax effects). Net loss of “Corporate and Eliminations” for the fiscal year ended March 31, 2002 includes, a) ¥16,200 million in losses on the write-down of marketable securities, b) ¥10,084 million in impairment losses of long-lived assets, c) a gain of ¥9,375million from a nonmonetary exchange of shares in connection with a business combination of certain financial institutions, and d) a gain of ¥8,895 million from contribution of securities to an employee retirement benefit trust (all amounts are after income tax effects).

	4.		Total assets of “Corporate and Eliminations” at March 31, 2003 and 2002 include corporate assets, consisting primarily of cash and cash equivalents and time deposits maintained for corporate finance activities and similar assets of certain subsidiaries operating with corporate departments.

	5.		Transfers between operating segments are made at cost plus a markup.

	6.		Operating Income (Loss) reflects the companies’ a) Revenue — Gross Trading Profit, b) Selling, general and administrative expenses, and c) Provision for doubtful receivables.

Marketable Securities

Debt and Equity Securities

At March 31, 2003 and 2002, the aggregate cost, fair value and unrealized holding gains — net on available-for-sale securities and the amortized cost, fair value and unrealized holding gains — net on held-to-maturity debt securities were as follows:

March 31, 2003:

(Millions of Yen)


					Unrealized Holding
	Aggregate Cost		Fair Value		Gains — net

Available-for-sale:
Marketable equity securities		140,475		156,146		15,671
Foreign debentures, commercial paper and other debt securities		130,091		130,175		84

Unrealized Holding

Amortized Cost

Fair Value

Gains — net

Held-to-maturity debt securities, consisting principally of foreign debentures

16,793

16,804

March 31, 2002:

(Millions of Yen)


					Unrealized Holding
	Aggregate Cost		Fair Value		Gains — net

Available-for-sale:
Marketable equity securities		177,835		266,079		88,244
Foreign debentures, commercial paper and other debt securities		155,639		156,339		700

Unrealized Holding

Amortized Cost

Fair Value

Gains — net

Held-to-maturity debt securities, consisting principally of foreign debentures

23,356

23,381

Retirement Benefits

1. Summary of Pension and Other Severance Indemnities Plan

The Company had a non-contributory defined benefit pension plan (the Tax Qualified Pension Plan, “TQPP”) and participates in a contributory defined benefit Japanese government welfare pension program for its employees (the Employees’ Pension Fund, “EPF”) covering substantially all of its employees other than directors. Effective April 1, 1997, the Company merged TQPP into EPF. TQPP remained only for the retired employees with vested benefits as of March 31, 1997.

EPF is composed of a substitutional portion of Japanese Pension Insurance and a corporate portion of a contributory defined benefit plan. For the former, the benefits are based on a standard remuneration schedule under the Welfare Pension Insurance Law and the length of participation, and, for the latter, the benefits are based on the length of service.

EPF was approved by the government for an exemption from the obligation to pay benefits for future employee service related to the substitutional portion on October 01, 2002. In January 2003, the Emerging Issues Task Force reached a final consensus on Issue 03-2 (“EITF 03-2”), “Accounting for the Transfer to the Japanese Government of the Substitutional Portion of Employee Pension Fund Liabilities.” EITF 03-2 addresses accounting for a transfer to the Japanese government of a substitutional portion of EPF. EITF 03-2 requires employers to account for the entire separation process of a substitutional portion from a plan upon completion of the transfer to the government of the substitutional portion of the benefit obligation and related plan assets as the culmination of a series of steps in a single settlement transaction. Under this approach, the difference between the fair value of the obligation and the assets required to be transferred to the government should be accounted for and separately disclosed as a subsidy. The related gain or loss on the transfer of the substitutional portion is expected to be recorded during the year ending March 31, 2004 based on completion of the entire process.

The Company has unfunded severance indemnities plans accounted for in accordance with SFAS No. 87, “Employers’ Accounting for Pensions.”

Certain subsidiaries participate in other pension plans and/or have unfunded severance indemnities plans. Benefits under the plans are based on the level of compensation at retirement or earlier termination of employment and the length of services.

2.		Retirement Benefit Costs and Retirement Benefit Obligation Recognized in the Consolidated Balance Sheets

(1)		Pension and severance indemnities costs

		Pension and severance indemnities costs under defined benefit plans of the companies for the year ended March 31, 2003 and 2002 were as follows:

(Millions of Yen)


Year ended March 31, 2003	Year ended March 31, 2002
(April 1, 2002 — March 31, 2003)	(April 1, 2001 — March 31, 2002)

21,639		24,172

(2)		Pension and severance indemnities obligation recognized in the Consolidated Balance Sheets

		Pension and severance indemnities obligation of the companies recognized in the Consolidated Balance Sheets at March 31, 2003 and 2002 were as follows:

(Millions of Yen)


	March 31, 2003			March 31, 2002

Intangible assets		180			128
Other assets (prepaid pension costs)		119,727			80,410
Accrued pension costs and liability for severance indemnities		(53,148	)		(41,561	)
Accumulated other comprehensive loss (before income tax effect)		13,663			3,079

(3)

Actuarial Assumptions


	March 31, 2003	March 31, 2002

Discount rate	Primarily 2.25%	Primarily 3.00%
Expected long-term rate of return on plan assets	Primarily 3.50%	Primarily 3.50%

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