Mitsubishi 2000 Annual Report Download - page 43

Financial review
41
Depreciation expenses
Depreciation expenses (leased vehicle assets excluded) were
¥117.6 billion, a 7.9% decrease on the previous year. Depreciation
expenses decreased in Japan, but increased elsewhere.
Interest-bearing liabilities
At the end of March 2000, interest-bearing liabilities (short- and
long-term loans payable, commercial paper and bonds), including
those at the Company's financing subsidiaries in North America,
stood at ¥1,473.3 billion, a 17% reduction over the previous year.
This reduction was realized by trimming inventories, selling off
fixed assets, and liquidating trade receivables.
Cash flows
Cash flows from operating activities increased by ¥214 billion,
while cash flows from acquisition or disposal of tangible assets
and other investing activities decreased by ¥81.7 billion. After
subtracting the issue of new shares for AB Volvo and the repay-
ment of loans and other such disbursements, cash flows relating to
financial service activities decreased by ¥162.4 billion. The year-
end balance of cash and cash equivalents after foreign currency
translation adjustments was ¥87.3 billion, a ¥36 billion decrease
over the previous fiscal year.
Consolidated companies
The number of consolidated subsidiaries included in the consoli-
dated statements at the end of March 2000 was 189, an increase of
24 over the previous year. The total decreased by 8 and increased
by 32. The total number of companies accounted for by the equity
method was 32, with 2 additions and 18 deletions.
Exchange rates
The foreign currency exchange rates applied in calculating the
revenues, expenses, assets and liabilities of the Company's princi-
pal foreign subsidiaries in fiscal 1999 are as follows:
• Revenues and expenses: USD 1 = ¥113.66 (¥131.87 in fiscal 1998)
• Assets and liabilities: USD 1 = ¥115.70 (¥115.70 in fiscal 1998)
Equity participation
After reaching agreement with AB Volvo on an equity tie-up in
October last year, MMC issued 48,516,000 new shares to AB
Volvo, this being equivalent to a 5% holding after issue of the
new shares.
MMC reached agreement on a business alliance, which in-
cludes equity participation, with DaimlerChrysler AG in March
this year.
Dividend payment
MMC regrets to announce that it intends once again to cancel pay-
ment of the year-end dividend in order to increase its retained
earnings for future purposes. The Company apologizes sincerely
to its shareholders and asks for their continuing understanding and
patience.
Consolidated forecast for fiscal 2000
Looking ahead to fiscal 2000, the first year of the new mid-term
management plan Heart-Beat 21, the Company finds it difficult to
make accurate predictions due to many indeterminate factors.
These include prospects for the American economy, for economic
recovery in Europe and Asia, and the degree of economic recov-
ery in Japan.
While fluctuations in the major currencies, price reductions
required due to intensifying market competition, the degree to
which domestic consumption in Japan will recover and other fac-
tors make accurate forecasting difficult, the Company offers the
following forecast for its consolidated operations in fiscal 2000.
It should be noted that the major reason for the consolidated
net loss forecast for fiscal 2000 is the one-time charge of ¥140 bil-
lion that the Company plans to take to cover pension fund liabili-
ties consequent upon changes in accounting standards for postre-
tirement benefits.
Change from
Consolidated forecast previous year
Sales ¥3,550 billion 6.4%
Operating income ¥20 billion
Net income – ¥70 billion
Cautionary statement:
The fiscal 2000 forecasts are based on management assumptions
and predictions made in the light of the information currently
available. Undue reliance should not be placed on these forecasts.
A number of factors, including, but not limited to, changes in the
busines environment surrounding MMC operations, market trends
and currency fluctuations could cause actual results to differ ma-
terially from those discussed in the forecasts.
152.2 109.9 129.0 127.7
'95 '96 '97 '98
(¥ billion)
0
100
200
117.6
'99
Total
Depreciation & amortization
Excluding leased vehicles