Fujitsu 2007 Annual Report Download - page 87

U.S. Dollars (thousands)
Ubiquitous
Technology Product Device Other Elimination &
Years ended March 31 Solutions Solutions Solutions Operations Corporate Consolidated
2007 (in U.S. Dollars)
Sales
Unaffiliated customers $25,972,144 $8,417,220 $5,992,644 $2,839,712 $ — $43,221,720
Intersegment 782,432 1,060,093 470,703 1,316,026 (3,629,254) —
Total sales 26,754,576 9,477,313 6,463,347 4,155,738 (3,629,254) 43,221,720
Operating costs and expenses 25,368,068 9,124,347 6,302,245 4,066,221 (3,182,280) 41,678,601
Operating income (loss) 1,386,508 352,966 161,102 89,517 (446,974) 1,543,119
Total assets 15,934,152 3,054,161 6,165,653 3,552,678 4,714,746 33,421,390
Depreciation 1,027,415 197,330 786,305 110,390 103,331 2,224,771
Impairment loss 78,059 — 6,610 — — 84,669
Capital expenditure
(including intangible assets) 1,247,627 234,026 1,453,415 139,432 86,915 3,161,415
1. The business segments are classified based on similarity of products and services, and selling methods, etc.
2. The principal products and services of business segments are as follows:
(1) Technology Solutions ............................ Servers (mainframes, UNIX servers, mission-critical IA servers, PC servers), storage systems, software
(OS, middleware), network management systems, optical transmission systems, mobile phone base
stations, consulting, systems integration services (system construction), outsourcing services (one-stop
information system operational management), network services (network environments and networking-
related services for information systems), system support (information system and network maintenance
and monitoring services), information system and network construction, custom terminal installation
(ATMs, POS systems, etc)
(2) Ubiquitous Product Solutions ................ Personal computers, mobile phones, HDD (hard disk drives), magneto-optical drives, optical trans-
ceiver modules
(3) Device Solutions ................................... LSI (logic LSI devices), electronic components (semiconductor packages, SAW devices, etc), mechani-
cal components (relays, connectors, etc)
(4) Other Operations .................................. Audio/navigation equipment, automotive electronic devices, etc
3. Unallocated operating costs and expenses included in “Elimination & Corporate” for the years ended March 31, 2005, 2006 and 2007 were ¥44,004
million, ¥41,461 million and ¥54,965 million ($465,805 thousand), respectively. Most of these were strategic expenses such as basic research and
development expenses and Group management shared expenses incurred by the Company.
4. Corporate assets included in “Elimination & Corporate” at March 31, 2005, 2006 and 2007 amounted to ¥927,300 million, ¥932,190 million and
¥940,397 million ($7,969,466 thousand), respectively. The assets principally consisted of working capital (cash and cash equivalents and short-term
investments), long-term investments and others.
5. Accounting principles and practices were changed from the year ended March 31, 2006 as stated in Note 1. (a) Basis of presenting consolidated
financial statements and the principles of consolidation (d) Revenue recognition (k) Provision for product warranties. As a result of these changes, for
the year ended March 31, 2006, sales to unaffiliated customers and operating income for “Technology Solutions” increased by ¥5,367 million and
¥7,785 million, respectively, and operating income for “Ubiquitous Product Solutions” decreased by ¥2,977 million.
Segment information for the year ended March 31, 2005 has not been restated.
6. Change in method of allocating operating expenses
Expenses for the Company’s general administrative divisions were previously accounted for primarily as unallocated operating expenses under
“Elimination & Corporate.”
For the year ended March 31, 2007, the Group has changed the method of allocating operating expenses, assessing to each Business Unit (the
“BU”) on a services-rendered basis expenses that would be incurred if each BU were to operate independently.
The Group has been reforming its business performance management system to better reflect the position of various BUs as independent operating
entities under the consolidated framework and to delineate the responsibility of each to earn a return on investment. For the year ended March 31,
2007, further development of the business performance management system allowed the Group to better identify and categorize the expenses by
functional areas. The Group, therefore, changed the method to allocating expenses to each BU on a service-rendered basis in line with those incurred
if each BU were to operate independently to more clearly reflect the actual business situation.
Strategic expenses to be recovered by the Group as a whole, such as basic research, are recognized in “Elimination & Corporate,” the same as before.
In addition, the method of allocating expenses attributable to the sales activities of sales and system engineering units was changed from sales-
based allocation to a services-rendered approach for the same reasons stated above.
Segment information for the year ended March 31, 2006 and prior years has been restated.
Annual Report 2007 85