Trend Micro 2014 Annual Report Download - page 8

(Japan GAAP)
(Note)
Shareholder’s Equity Ratio : (Total shareholder’s Equity)/(Total Assets)
Capital Adequacy Ratio on Market Value : (Total Market Value of Shares)/(Total Assets) Basis
Debt Redemption Period : (Interest-bearing Debt)/(Operating Cash Flow)
Interest Coverage Ratio : (Operating Cash Flow)/(Interest Payment)
*All indexes are calculated from the financial statement amounts on a consolidated basis.
*Total Market Value of Shares is calculated as follows; closing share price at the term end multiplies by
number of shares issued at the term end (net of treasury shares).
*Operating Cash Flow is Net cash flows from operating activities in the consolidated statement of cash
flows.
Interest-bearing Debt is all debts with interest payments among the debts reported in the consolidated
balance sheet.
Interest Payment is the amount of payment for interest expense in the consolidated statement of cash flows.
(4) BASIC POLICY OF PROFIT SHARING
We intend to continue to return profits to shareholders based on the net profit on a consolidated basis
while striving to enhance financial strength and secure internal reserve in order to deal with
significantly changing business environment and maintain competitive edge against competitors.
As our basic policy on dividend, we plan to pay a year-end dividend on the basis of the dividend ratio of
70%.
Accordingly a year-end dividend on the basis of a dividend ratio of 70.1% of net income of 22,303 million
yen in FY2014, we have planned to pay total dividends of 15,629 million yen, which is 116 yen per share in
this term.
We also plan to pay dividend in next term based on our above mentioned basic policy on dividend.
(5) RISK FACTORS
The occurrence of any of the following risks could affect the Trend Micro group's business, financial
condition, and operating results. If this should happen, the trading price of shares of Trend Micro
Incorporated, Trend Micro group's parent company, could decline and its investors/shareholders could lose
all or part of their investment. Other risks and uncertainties unknown to us, the Trend Micro group, or
that we, the Trend Micro Group, think are immaterial may also impair our business.
MAJOR SOFTWARE AND HARDWARE VENDORS MAY INCORPORATE ANTIVIRUS PROTECTION IN THEIR PRODUCT OFFERINGS, WHICH
COULD RENDER OUR PRODUCTS AND SERVICES OBSOLETE OR UNMARKETABLE.
There is a possibility of facing significant changes in the competitive environment, if major vendors of
operating system software and other software such as firewall, e-mail software or computer hardware, decide
to enhance or bundle their products to include antivirus and other computer security functions. These
companies may offer antivirus protection as a standard feature in their products, at minimal or no
additional cost to customers, which could render our wide range of products and services obsolete or
unmarketable, particularly if antivirus products offered by these vendors were comparable or superior to
our wide range of products and services. In addition, even if these vendors’ antivirus products offered
fewer functions than our wide range of products and services, or were less effective in detecting and
cleaning virus-infected files, customers could still choose them over our wide range of products and
services due to lower cost or for any other reasons.
Microsoft Corp., a major operating system vendor, has acquired several security vendors. If antivirus and
other computer security functions were to be included in its operating system products by Microsoft Corp.,
this could have a material adverse effect on our business, financial condition and results of operations.
[Trends of Cash Flow Indexes]
FY2010 FY2011 FY2012 FY2013 FY2014
Shareholder’s equity
Ratio (%) 47.4 49.9 49.9 53.6 53.8
Capital Adequacy Ratio
on Market Value Basis
(%)
173.7 150.0 155.8 189.8 160.8
Debt Redemption Period
(years) - - - - -
Interest Coverage Ratio 8,424.1 13,846.0 7,300.7 4845.8 1,872.1
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