Konica Minolta 2004 Annual Report Download - page 41

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KONICA MINOLTA HOLDINGS, INC. 2004
Billions of yen
Impact of
Foreign Currency Integration
Exchange Rates Expenses
Business Technologies +8.5 –4.1
Optics –0.8 –0.2
Photo Imaging +1.8 –0.5
Medical & Graphic Imaging –0.6 –0.2
Sensing –0.1 –0.1
Other Businesses 0.0 –3.7
Cash Flows
In the fiscal year ended March 31, 2004, net cash provided by
operating activities totaled ¥86.1 billion, while net cash used in
investing activities, primarily for capital expenditure, was ¥31.9
billion. As a result, free-cash flows for the fiscal year ended
March 31, 2004 totaled ¥54.2 billion.
A portion of these funds were used to repay certain borrow-
ings and corporate bonds. Interest-bearing debt as of March 31,
2004 totaled at ¥268 billion, while the debt-to-equity ratio fell
from 0.84 to 0.80. Net cash used in financing activities in the
fiscal year ended March 31, 2004 was ¥55.3 billion.
After considering the cash flows from operating, investing,
and financing activities and the ¥1.6 billon decrease for the
effect of exchange rate changes, cash and cash equivalents at
March 31, 2004 declined ¥2.7 billion as compared to March
31, 2003. Due to the integration with Minolta Co., Ltd. and
new subsidiaries included in the Company’s scope of consolida-
tion, cash and cash equivalents increased by ¥33.5 billion and
¥1.0 billion, respectively. As a result, the balance of cash and
cash equivalents at March 31, 2004 was ¥83.7 billion.
Assets, Liabilities, and Equity
As of March 31, 2004, total assets were ¥969.6 billion and
included current assets of ¥535.8 billion and fixed assets of
¥433.8 billion.
The principal components of current assets were notes and
accounts receivable—trade of ¥223.0 billion, inventories of
¥173.9 billion, and cash and cash equivalents of ¥83.6 billion
before adding ¥0.1 billion of marketable securities.
The significant components in fixed assets at March 31,
2004 included property, plant and equipment, consolidation
goodwill, investment securities and noncurrent deferred tax assets
of ¥220.2 billion, ¥98.7 billion, ¥37.4 billion, and ¥31.9 bil-
lion, respectively. The consolidation goodwill account is being
amortized on a straight-line basis over 5 to 20 years.
Amortization expense of the consolidation goodwill amount in
the fiscal year ended March 31, 2004 was ¥2.4 billion.
As of March 31, 2004, total liabilities were ¥632.9 billion
and included current liabilities of ¥484.8 billion and long-term
liabilities of ¥148.1 billion. The balance of liabilities, as of
March 31, 2004, was impacted by repayments of interest-
bearing debt through free-cash flows generated for the period.
Current liabilities comprised mainly short-term debt, notes
and accounts payable—trade, and accrued expenses with bal-
ances of ¥182.4 billion, ¥141.8 billion, and ¥71.5 billion,
respectively. The principal components of long-term liabilities
included long-term debt of ¥52.9 billion and accrued retirement
benefits of ¥65.8 billion. Minority interests as of March 31,
2004 were ¥1.2 billion.
The primary components of shareholders’ equity at March
31, 2004 include common stock, additional paid-in capital,
and retained earnings, with balances of ¥37.5 billion, ¥226.1
billion and ¥77.3 billion, respectively. Additional shareholders’
equity components include unrealized gains on securities of
¥4.9 billion and foreign currency translation adjustments, which
reflect cumulative translation losses of ¥9.7 billion. The total
shareholders’ equity balance at the March 31, 2004 was
¥335.4 billion.
Driven by efforts to streamline assets, the equity ratio was
34.6%, while equity per share totaled ¥631.54.
Capital Expenditures and Research and Development
Expenditures
During the fiscal year ended March 31, 2004, the Company
incurred capital expenditures totaling ¥43.1 billion with the aim
of developing new products, increasing production capacity,
implementing rationalization measures, and promoting labor effi-
ciency and power conservation. These expenditures by business
segment include ¥15.2 billion for Business Technologies, ¥6.3
billion for Optics, ¥9.9 billion for Photo Imaging, ¥4.5 billion for
Medical and Graphic Imaging, ¥0.1 billion for Sensing and
¥7.1 billion for all other business segments combined.
Research and development expenditure totaled ¥63.2 billion
during the fiscal year ended March 31, 2004 and included
¥29.6 billion for the Business Technologies segment, ¥7.0 bil-
lion for Optics, ¥9.7 billion for Photo Imaging, ¥7.7 billion for
Medical and Graphic Imaging, and ¥1.0 billion for Sensing.
Expenditures not allocated to a specific business segment, but
used for the development of basic research totaled ¥8.2 billion.
Outlook
The outlook for future economic conditions remains mixed. On
the one hand, an overall global economic recovery is antici-
pated, fueled by a noticeable surge in U.S. business conditions.
This positive scenario is in part offset by concerns over the situa-
tion in the Middle East, and particularly Iraq, and the continued
appreciation of the yen against the U.S. dollar. Against this back-
drop, we will accelerate the implementation of business integra-
tion measures and work to quickly realize the underlying benefits.