Fujitsu 2011 Annual Report Download - page 97

year, income before income taxes and minority interests declined
¥10.4 billion to ¥102.2 billion ($1,232 million) as a result of the gain
on sales of investment securities of ¥89.6 billion posted as other
income in the previous year for the sales of shares of FANUC Ltd. and
other securities. Income taxes increased ¥32.4 billion year-on-year to
¥48.1 billion ($580 million). The income tax rate against income
before income taxes and minority interests increased to 47% com-
pared with 14% in the previous year, when the gain on sales of
investment securities increased the amount of recoverable deferred
tax assets, leading to a reversal of the valuation allowance. Minority
interests totaled a loss of ¥1.0 billion ($12 million), a deterioration of
¥4.8 billion due to worsening performance of a subsidiary develop-
ing, manufacturing and selling automotive equipment.
The Group views profitability and efficiency of invested capital in
businesses as important management indicators. For fiscal 2010, the
return on equity, calculated by dividing net income by average
owners’ equity, was 6.8%, a decline of 5.2 percentage points from the
previous fiscal year.
Other comprehensive income totaled a loss of ¥15.2 billion
($184 million), primarily as a result of a foreign currency translation
adjustments loss stemming from the ongoing appreciation of the
yen. Because the Group’s global business development primarily
revolves around service businesses, foreign currency fluctuations in
the value of the net assets of subsidiaries outside Japan are recorded
in other comprehensive income. As a result of the fiscal 2009 sale of
shares in FANUC Ltd., the impact of stock price fluctuations on the
unrealized gain and loss on securities, net of taxes, was limited.
Comprehensive income, representing the total of other compre-
hensive income and income before minority interests, was ¥38.7
billion ($467 million).
2. Segment Information
Information by Operating Segment
Change in Segmentation
The Group is pursuing “a business growth strategy based on the
acceleration of its globalization” and “the creation of new services
businesses to support the realization of a Human Centric Intelligent
Society*2.” On the basis of this management strategy, the company
revised its operating segments from fiscal 2010. In addition, from
fiscal 2010 the company has implemented “Revised Accounting
Standard for Disclosures about Segments of an Enterprise and
Related Information” (Accounting Standards Board of Japan State-
ment No. 17, issued March 27, 2009) and “Accounting Standard for
Disclosures about Segments of an Enterprise and Related Informa-
tion (Accounting Standards Board of Japan Guidance No. 20, issued
March 21, 2008).
*2 A society where all people can benefit from the value created by ICT, without
needing to be aware of sophisticated technologies and operations.
Vast amounts of information generated by the behavior of people and
organizations can be collected by high-speed, high-capacity wireless net-
working technologies as well as a variety of information terminals and
sensing technologies that are permeating society, including corporate
activities and the daily lives of people. This information can be used to make
visible the movements of people and things that were, up until now, difficult
to track. By analyzing this information through utilizing ICT infrastructure,
such as cloud platforms and supercomputers, effective data can be gener-
ated. As a result, new value and business models can be created. Through
new discoveries on the issues facing society as a whole, including health-
care, the global environment, and energy problems, as well as business
activities, and through sophisticated human interfaces, the Group is commit-
ted to bringing about a prosperous, human-centric society that delivers the
benefits of ICT to as many people as possible.
Prior to fiscal 2010, the Group’s operating segments consisted of
“Technology Solutions,” “Ubiquitous Product Solutions,” “Device
Solutions,” and “Other Operations,” based on the similarity of the
products and services and sales methods. From fiscal 2010, the
reportable segments were consolidated into the three segments of
“Technology Solutions,” “Ubiquitous Solutions,” and “Device Solutions,”
based on organizational structure, the characteristics of the products
and services, and the similarities in sales markets. “Other Operations/
Elimination & Corporate” covers items not included in the above
three reportable segments, including Japan’s Next-Generation
Supercomputer project, facility services and the development of
information systems for the Group companies, and welfare benefits
for Fujitsu Group employees. The main changes in segmentation are
described below.
(Car audio and navigation systems, mobile communication equip-
ment, and automotive electronic equipment)
In the “Human Centric Intelligent Society” that the Group is seeking to
bring about, car audio and navigation systems will, along with PCs
and mobile phones, play an important role as ubiquitous terminals
and sensors in collecting and utilizing information and knowledge
generated from the patterns of movements of people and organiza-
tions. Prior to fiscal 2010, these products were included in the “Other
Operations/Elimination & Corporate” segment, but they are now
included in the “Ubiquitous Solutions” segment. At the same time,
the name of the segment was revised from “Ubiquitous Product
Solutions” to “Ubiquitous Solutions.”
(Optical transceiver modules, printed circuit boards)
In accordance with the internal management reorganization associ-
ated with the segments, a subsidiary manufacturing, developing and
selling optical transceiver modules previously included in the
“ Ubiquitous Product Solutions” segment and a subsidiary manufac-
turing printed circuit boards previously included in the “Other
Operations/Elimination and Corporate” segment are now included in
the “Device Solutions” segment.
(HDD business transferred in fiscal 2009)
The HDD business was included in the “Ubiquitous Product Solutions”
segment prior to its transfer. Figures for fiscal 2009 were reclassified
into the “Other Operations/ Elimination & Corporate” segment for
comparison purposes.
Sales and Operating Income by Segment
Sales (including intersegment sales) and operating income by segment
for fiscal 2010 are shown on the following pages. Due to the changes in
segmentation from the current year, figures for fiscal 2009 have been
reclassified into the new segments for comparison and analysis purposes.
095FUJITSU LIMITED ANNUAL REPORT 2011
FACTS & FIGURES
MANAGEMENT’S DISCUSSION AND ANALYSIS OF OPERATIONS