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FUJITSU LIMITED
Annual Report
2000

Table of contents

  • Page 1
    FUJITSU LIMITED Annual Report 2000

  • Page 2
    Consolidated Financial Highlights Fujitsu Limited and Consolidated Subsidiaries Years ended March 31 Yen U.S. Dollars (millions) (millions) (except per share data) (except per share data) 2000 1999 2000 For the year: Net sales Operating income Income before income taxes and minority interests Net...

  • Page 3
    ..., the Fujitsu Group is committed to aggressively introducing products and services that utilize the most advanced information technology, as well as to responding to our customers' diverse needs by providing solutions to their business problems. 2 Fujitsu. The Possibilities Are Infinite 3 Since...

  • Page 4
    ... with DMR (in North America), ICL (in Europe) and our other group companies around the globe, are combining our worldclass know-how and offering common services and products, while at the same time catering to local cultures and ways of doing business. â...· Promoting the Fujitsu corporate brand...

  • Page 5
    ... to achieving our goal of 10% ROE in the 2000 fiscal year. â...· Striving for even greater growth priority at Fujitsu, and our efforts include making products that are environmentally friendly and providing environmental management services. Through the kind of efforts and activities described above...

  • Page 6
    ...and communications, we are able to offer superior products optimized for the Internet. In technologies, we emphasize state-of-the-art products with high added value, including electronic devices such as system LSI (SOC), flash memory, system memory and compound semiconductors. 7 Services Platforms...

  • Page 7
    ... C transactions. 2 Number One Internet Service Provider â...· Helping make possible a richer network society for all 9 Our advanced Internet usage is changing not only the way we do business at the Fujitsu Group but also our management style and even our organizational structure. We firmly believe...

  • Page 8
    ... in Our Major Business Areas Services and Software â...· Growing our solutions and network services businesses In the services and software area, we have worked hard to place ourselves in our customers' shoes and strengthen Internet-based solutions that help solve their management problems, and we...

  • Page 9
    ... personal computers. Supported by the combined resources of Fujitsu and Siemens, the new company is quickly bringing to market products that have an edge in technology, performance and price. 11 In May 2000, the Fujitsu Group launched globally unified server brands (PRIMERGY IA Servers, PRIMEPOWER...

  • Page 10
    ...well placed to develop photonic systems business, based on our strengths in next-generation optical communications technology. Looking ahead, we expect growth in the optical transmission field to shift from SONET to WDM technology and demand to rise for next-generation OADM and OXC equipment. We are...

  • Page 11
    ... and SAW filters to fill the rapidly expanding needs of the cellular telephone market and compound semiconductors for the optical transmission equipment. We are proud to hold mounted consumer-use high definition televisions. Fujitsu Hitachi Plasma Display Ltd., in which Sony Corporation recently...

  • Page 12
    ... Vietnam that were purchased using company and employee contributions. We plan to plant an additional 250,000 seedlings in fiscal 2000. Separately, in September 1999, we received an award for our tree-planting activities in Thailand since 1998. â...· Establishing Corporate Environmental Affairs Group...

  • Page 13
    ... Promoting the International Mathematical Olympiad international perspective. A longstanding example of this is our continuing support of the Japan-America Institute of Management Science (JAIMS), which we founded in Hawaii in 1972. JAIMS' mission is to contribute to human and economic development...

  • Page 14
    Members of the Board and Auditors Tadashi Sekizawa Chairman and 16 Naoyuki Akikusa President and CEO

  • Page 15
    ... 3,072,698 Net sales by business segment (excluding intersegment sales): Services and software Information processing Telecommunications Electronic devices Financing Other operations Total Net sales by customers' geographic location: Japan Europe The Americas Asia & Oceania Africa & the Middle East...

  • Page 16
    ... to recover. At the same time, the business environment for the Fujitsu Group as a whole remained challenging, owing to global corporate efforts to rein in IT-related investments out of concern for the ramifications of Year 2000 (Y2K) problems. In this environment, consolidated net sales remained...

  • Page 17
    ... the status of Fujitsu Leasing Co., Ltd. during this period from an affiliated company to a consolidated subsidiary, we have added an additional business segment (Financing) to the previous five segments (Services and Software, Information Processing, Telecommunications, Electronic Devices and Other...

  • Page 18
    ... sales of corporate information systems, as well as increased competition in large-scale servers (especially in the US) and substantial price erosion in the small form factor hard disk drive and desktop products businesses. Telecommunications Domestic sales in the telecommunications segment rose...

  • Page 19
    ... 31 Services and software ...Information processing ...Telecommunications ...Electronic devices ...[Semiconductor production] ...Financing ...Other operations ...Corporate* ...Capital expenditure ...Domestic ...Overseas ...1999 ¥ 48 79 41 97 [80] - 9 11 ¥288 207 81 (¥ Billion) Increase (Decrease...

  • Page 20
    * Telecommunications - R&D and production equipment for optical transmission systems and next-generation mobile communications systems * Electronic devices - Advanced logic development line, logic and flash memory production facilities, and SAW filter mass-production facilities of convertible bonds...

  • Page 21
    ...2000 U.S. Dollars (thousands) (Note 3) 2000 Assets Current assets: Cash and cash equivalents Short-term investments (Note 4) Receivables, trade (Notes 9 and 16) Allowance for doubtful accounts Inventories (Note 5) Current portion of lease...Cumulative translation adjustments Discounts on bonds Total ...

  • Page 22
    ...Long-term debt (Note 9) Accrued severance benefits (Note 10) Provision for loss on repurchase of computers Other long-term liabilities (Note 11) ...) 1999-1,884,139,404 shares 2000-1,962,939,607 shares Capital surplus Retained earnings Treasury stock Total shareholders' equity 193,005 213,562 2,014,...

  • Page 23
    Consolidated Statements of Operations Years ended March 31 1998 1999 Yen (millions) 2000 U.S. Dollars (thousands) (Note 3) 2000 Net sales Operating costs and expenses: Cost of sales Selling, general and administrative expenses (Note 18) ¥4,985,382 ¥5,242,986 ¥5,255,102 $49,576,434 ...

  • Page 24
    Consolidated Statements of Shareholders' Equity Years ended March 31 1998 1999 Yen (millions) 2000 U.S. Dollars (thousands) (Note 3) 2000 Common stock: Balance at beginning of year Exercise of warrants Conversion of bonds Increase as a result of merger Balance at end of year ¥237,674 9,547 2,...

  • Page 25
    ..., plant and equipment Purchases of intangible assets (Increase) in investments and long-term loans (Increase) decrease in short-term investments Acquisition of Amdahl Corporation, net of cash acquired Other, net Net cash used in investing activities A+B ( ) Cash flows from financing activities...

  • Page 26
    ... Revenues from sales of communications products and computer systems are generally recognized upon acceptance by the customers, while revenues from sales of personal computers, peripherals, other equipment and electronic devices are recognized when the products are shipped. (f) Marketable securities...

  • Page 27
    ... defined benefit plans are calculated by a projected unit credit method. (l) Provision for loss on repurchase of computers Certain computers manufactured by the Group are sold to Japan Electronic Computer Company Limited ("JECC") and other leasing companies and financial institutions for leasing to...

  • Page 28
    ...27. For the year ended March 31, 2000, there was no difference from IAS No. 27, since Fujitsu Leasing Co., Ltd. was initially consolidated. Pension and Severance plans (Note 10) Accounting standards in Japan for retirement benefits adopted effective April 1, 2000, are analogous to the revised IAS No...

  • Page 29
    ...been applied, the significant effects on the consolidated financial statements would have been as follows. As the effect of pension and severance plans for the year ended March 31, 2000 was not computed, the effect for the year beginning on April 1, 2000 is estimated and disclosed in Note 10. Please...

  • Page 30
    ... in investments and long-term loans-other. The Company does not regard JECC as an affiliate as it is unable to exercise significant influence over JECC's affairs. JECC's principal business is the leasing of computers and peripherals which it purchases from its seven shareholders. At March 31, 2000...

  • Page 31
    Notes to Consolidated Financial Statements 7. Property, Plant and Equipment Changes in property, plant and equipment resulted from the following: Yen (millions) Years ended March 31 1999 2000 U.S. Dollars (thousands) 2000 Land Balance at beginning of year, net Additions Translation differences ...

  • Page 32
    ...,431 $ 5,472 4,036,330 9,434 $4,051,236 Long-term debt at March 31, 1998 and 1999 consisted of: Yen (millions) 1999 2000 U.S. Dollars (thousands) 2000 Loans, principally from banks and insurance companies, due from 2000 to 2024 at interest rates ranging from 0.08% to 11.7% at March 31, 1999 and...

  • Page 33
    .... 10. Pension and Severance Plans Upon retirement, employees of the Group are entitled to a lump-sum payment or annuity payments for life as described below. The Company and its consolidated subsidiaries in Japan adopt severance benefit plans, under which the cost of benefits is not funded and the...

  • Page 34
    ... service cost resulting from this shift is being amortized over 9 years. Most subsidiaries outside Japan have defined benefit pension plans and/or defined contribution pension plans covering substantially all employees. The major plan is the ICL Group Pension Plan, which is a defined benefit plan...

  • Page 35
    ...millions) 1999 2000 U.S. Dollars (thousands) 2000 Deferred tax assets: Tax loss carryforwards Accrued severance benefits Provision for loss on repurchase of computers Intercompany profits on inventories and property, plant and equipment Accrued employee benefits Accrued enterprise taxes Other Gross...

  • Page 36
    ... account after approval at the general shareholders' meeting held on June 29, 2000, and will be included in the following year's consolidated balance sheet. The increase arising from a merger during the year ended March 31, 1999 reflects the issuance of stock in connection with the merger of Fujitsu...

  • Page 37
    ... uncollectible minimum lease payments receivable, under finance leases operated by Fujitsu Leasing Co., Ltd. at March 31, 2000. Since Fujitsu Leasing Co., Ltd. was not a consolidated subsidiary but an affiliate during the year ended March 31, 1999, the Group, as a lessor, had no finance leases for...

  • Page 38
    ... the year ended March 31,1999, finance leases between the Group companies in Japan and Fujitsu Leasing Co., Ltd. were not eliminated for the year ended March 31, 1999 or before. As stated in Note 1 '(p) Change in significant accounting policy', these finance leases were treated in the same way as...

  • Page 39
    ... new segments: "Services & Software," "Information Processing," "Telecommunications," "Electronic Devices" and "Other Operations" in order to present more useful information regarding the Group's business. "Financing" has been newly added effective the year ended March 31, 2000, accompanied with the...

  • Page 40
    ... switching system, Optical transmission system, Optical undersea transmission system, Corporate information network system, Mobile telecommunication system, Cellular phone (4) Electronic Devices System LSI, Flash memory, SAW device, Compound semiconductor, PDP, LCD (5) Financing Leasing business...

  • Page 41
    ... than Japan: (1) Europe U.K., France, Spain, Sweden, Germany, Finland, the Netherlands (2) The Americas U.S.A., Canada (3) Others China, Thailand, Vietnam, the Philippines, Singapore, Taiwan, Australia 3. Unallocated operating costs and expenses reported in "Elimination & Corporate" for the years...

  • Page 42
    Independent Auditors' Report CERTIFIED PUBLIC ACCOUNTANTS The Board of Directors FUJITSU LIMITED We have examined the consolidated balance sheets of Fujitsu Limited and consolidated subsidiaries (the "Group") as of March 31, 1999 and 2000, and the related consolidated statements of operations, ...

  • Page 43
    ...100% Fujitsu Network Engineering Ltd. [Kawasaki] 100% Fujitsu Learning Media Ltd. [Tokyo] 100% Fujitsu Basic Software Corporation [Tokyo] 70% Shin-etsu Fujitsu Ltd. [Nagano] 88% Fujitsu Financial Solutions and Outsourcing Ltd. [Osaka] 100% Fujitsu LSI Technology Ltd. [Kawasaki] 100% Fujitsu Research...

  • Page 44
    ...% DMR Consulting Group, Inc. (Amdahl Group Company) [Edison (NJ)] U.S.A. 100% Fujitsu Microelectronics, Inc. [San Jose (CA)] U.S.A. 100% Fujitsu Systems Business of America, Inc. [Santa Clara (CA)] U.S.A. 100% Fujitsu Computer Packaging Technologies, Inc. [San Jose (CA)] U.S.A. 100% Fujitsu Software...

  • Page 45
    ... Group Companies Ross Technology, Inc. [Austin (TX)] U.S.A. 59% Fujitsu PC Corporation [Milpitas (CA)] U.S.A. 100% Reliance Computer Corp. [Santa Clara (CA)] U.S.A. 63% Fujitsu Business Communication Systems, Inc. [Anaheim (CA)] U.S.A. 100% Fujitsu Computer Products of America, Inc. [San Jose (CA...

  • Page 46
    ... 100-0005, Japan Stock Exchange Listings Japan: Tokyo, Osaka, Nagoya Overseas: Frankfurt, London, Swiss* (*) The original version stated Zurich, Basel and Geneva exchanges. Shareholder Information For further information, please contact: Fujitsu Limited Investor Relations Telephone: +81-3-3213-4160...