Fujitsu 2003 Annual Report Download - page 28

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foregoing factors, operating income for fiscal 2002
increased by ¥174.8 billion over the previous year, to
¥100.4 billion ($837 million). The ratio of operating
income to net sales was 2.2%.
Other Income and Expenses, Net Income
Other income and expenses amounted to -¥248.0 billion
(-$2,067 million), compared to -¥520.3 billion in the previ-
ous year.
With a significant decline in sales volume, we continued
the business restructuring initiatives begun in the previous
year, recording restructuring charges of ¥151.4 billion
($1,262 million), compared to ¥417.0 billion in the previ-
ous year. The restructuring, which included workforce
reductions at our production facilities in Japan, was aimed
at a fundamental reform of our cost structure in the face of
the structural changes in the IT market following the burst-
ing of the IT bubble in the U.S. and the persistence of
worldwide deflationary trends.
In addition, we posted ¥30.6 billion ($255 million) for
charges to cover the costs of corrective measures for cer-
tain small form factor hard disk drives. We recorded ¥21.8
billion ($182 million) in valuation losses for investment
securities as a result of stock price declines, compared to
¥20.5 billion of such losses the previous year. We also
posted ¥29.3 billion ($245 million) in gains on the sale of
investment securities as well as a gain of ¥14.5 billion
($121 million) related to the sale of our printer business. As
a result of these factors, we posted a loss before income
taxes and minority interests of ¥147.6 billion ($1,230 mil-
lion). After factoring in income taxes of -¥28.7 billion
(-$240 million) and minority interests of ¥3.2 billion ($27
million), the net loss was ¥122.0 billion ($1,017 million).
This represented an improvement of ¥260.4 billion com-
pared to the previous year’s net loss. The net loss per share
was ¥61.3 ($0.511).
Business Segment Information
Software and Services
Fiscal 2002 sales of software and services declined from
the previous year by 2.9%, to ¥2,025.7 billion ($16,882
million).
Amid general weakness in IT spending, there were a
few bright spots. The spread of the e-Japan initiative helped
boost sales to the healthcare sector, overseas expansion
resulted in higher sales to the manufacturing sector, and
the expanding infrastructure for broadband networks
favorably impacted our outsourcing business. With the con-
tinuing curtailment of IT investments by
telecommunications carriers in Japan, the U.S. and Europe,
however, and fewer large-scale projects among financial
institutions, overall sales in this segment declined.
The restructuring of our overseas subsidiaries returned
our operations in the U.K. and the U.S. to a profitable foot-
ing. Business productivity also increased as a result of our
promotion of packaged solution offerings and the full-scale
utilization of Enterprise Java Beans component technology
in software development. As a result, operating income in
this segment was ¥176.5 billion ($1,471 million), an
improvement of ¥18.6 billion over the previous year.
Platforms
Platforms sales totaled ¥1,612.0 billion ($13,433 million), a
significant decrease of 20.0% over the previous year.
Although the overall number of personal computers
shipped in the Japanese market was down from the pre-
ceding year and price competition became more severe,
we increased our share, especially for consumer products.
In mobile telephones, sales were particularly strong for our
innovative, easy-to-use models.
On the other hand, reflecting the continuing major cut-
backs in spending by telecommunications carriers in North
America as well as Japan, sales of optical transmission sys-
tems fell significantly compared to the previous year.
Domestic sales of 3G mobile systems were also weak. A
FINANCIAL SECTION
Management’s Discussion and Analysis of Operations
Operating Income (¥ Billions)
Ratio of Operating Income to Net Sales (%)
(Years ended March 31)