Earnings Release
FINANCIAL HIGHLIGHTS FOR THE YEAR ENDED MARCH 31, 1999
(Mitsubishi Corporation and subsidiaries based on US GAAP)
1. Trading transactions and income
Total trading transactions | Operating income | Net income | |
---|---|---|---|
For the year ended March 31, 1999 March 31, 1998 |
Millions of Yen 13,700,556 15,825,653 |
Millions of Yen 28,130 51,028 |
Millions of Yen 31,186 47,636 |
Net income per share |
Net income per share (diluted basis) |
Return on equity | |
---|---|---|---|
For the year ended March 31, 1999 March 31, 1998 |
Yen 19.90 30.40 |
Yen - - |
% 3.2 4.5 |
2. Assets and shareholders' equity
Total assets | Shareholders' equity |
Shareholders' equity to total assets |
Shareholders' equity per share |
|
---|---|---|---|---|
For the year ended March 31, 1999 March 31, 1998 |
Millions of Yen 8,843,388 9,522,309 |
Millions of Yen 949,514 1,009,383 |
% 10.7 10.6 |
Yen 605.88 644.08 |
3. Projections for the year ending March 31, 2000
Total trading transactions |
Net income | |
---|---|---|
For the six months ending September 30, 1999 For the year ending March 31, 2000 |
Millions of Yen 6,300,000 13,200,000 |
Millions of Yen 8,000 20,000 |
(Forecast of Net income per share for the year ending March 31, 2000 : 12.76 Yen)
4. Number of consolidated subsidiaries : 433
Number of affiliated companies accounted for by equity method : 181
The consolidated financial statements have been prepared on the basis of accounting principles generally accepted in the United States of America.
Mitsubishi Corporation and subsidiaries
STATEMENTS OF CONSOLIDATED INCOME (US GAAP)
Years ended March 31, 1999 and 1998
Millions of yen | Millions of U.S. dollars |
||||
---|---|---|---|---|---|
1999 | 1998 | Increase or [-]decrease |
1999 | ||
Total trading transactions |
13,700,556 |
15,825,653 |
-2,125,097 |
% -13.4 |
116,106 |
Gross trading profit |
582,938 |
588,225 |
-5,287 |
-0.9 |
4,940 |
Gross profit ratio | 4.25% | 3.72% | |||
Selling, general and administrative expenses | (527,509) | (515,067) | -12,442 | 2.4 | (4,471) |
Provision for doubtful receivables | (27,299) | (22,130) | -5,169 | / | (231) |
Operating income | 28,130 | 51,028 | -22,898 | -44.9 | 238 |
Other income (expenses) : | |||||
Interest expense - net | (20,060) | (14,385) | -5,675 | 39.5 | (170) |
Dividends | 22,994 | 28,230 | -5,236 | -18.5 | 195 |
Gain (loss) on marketable securities and investments - net | 3,752 | (3,026) | 6,778 | / | 32 |
Gain (loss) on property and equipment - net | 3,217 | 6,179 | -2,962 | / | 27 |
Other | (4,125) | (4,791) | 666 | / | (35) |
Other income - net | 5,778 | 12,207 | -6,429 | / | 49 |
Income from consolidated operations before income taxes | 33,908 | 63,235 | -29,327 | -46.4 | 287 |
Income taxes: | |||||
Current | (35,982) | (41,146) | 5,164 | / | (305) |
Deferred | 15,101 | 7,896 | 7,205 | / | 128 |
Total | (20,881) | (33,250) | 12,369 | / | (177) |
Income from consolidated operations | 13,027 | 29,985 | -16,958 | -56.6 | 110 |
Equity in earnings of affiliated companies - net (less applicable income taxes) |
18,159 | 17,651 | 508 | 2.9 | 154 |
Net income | 31,186 | 47,636 | -16,450 | -34.5 | 264 |
(1)The consolidated financial statements have been prepared on the basis of accounting principles generally accepted in the United States of America.
(2)The U.S. dollar amounts represent translations, for convenience, of yen amounts at the rate of JPY 118 =$1.
(3)Mitsubishi Corporation adopted SFAS No.130 "Reporting Comprehensive Income" in 1998. The company's comprehensive income comprises net income plus other comprehensive income representing changes in net unrealized gains on securities available for sale, and foreign currency translation and other adjustments.
Total comprehensive loss for the years ended March 31,1999 and 1998 was 47,332 million yen ($401million) and 77,665 million yen, respectively.
Mitsubishi Corporation and subsidiaries
CONSOLIDATED BALANCE SHEETS (US GAAP)
March 31, 1999 and 1998
ASSETS | Millions of yen | Millions of U.S. dollars |
||
---|---|---|---|---|
1999 | 1998 | Increase or [-]decrease |
1999 | |
Current assets: | ||||
Cash | 83,525 | 80,765 | 2,760 | 708 |
Time deposits | 1,154,670 | 1,109,805 | 44,865 | 9,786 |
Short-term investments | 380,213 | 514,546 | -134,333 | 3,222 |
Receivables-trade: | ||||
Notes and loans | 583,019 | 716,267 | -133,248 | 4,941 |
Accounts | 1,620,642 | 1,822,506 | -201,864 | 13,734 |
Affiliated companies | 308,087 | 334,365 | -26,278 | 2,611 |
Allowance for doubtful receivables | (29,300) | (34,031) | 4,731 | (248) |
Inventories | 453,275 | 491,983 | -38,708 | 3,841 |
Advance payments to suppliers | 224,568 | 284,492 | -59,924 | 1,903 |
Other current assets | 73,408 | 92,418 | -19,010 | 622 |
Total current assets | 4,852,107 | 5,413,116 | -561,009 | 41,120 |
Investments and non-current receivables: | ||||
Investments in and advances to affiliated companies | 451,575 | 463,929 | -12,354 | 3,827 |
Other investments | 1,547,374 | 1,778,071 | -230,697 | 13,113 |
Non-current notes, loans and accounts receivable-trade | 1,085,606 | 1,095,743 | -10,137 | 9,200 |
Allowance for doubtful receivables | (119,770) | (105,664) | -14,106 | (1,015) |
Total investments and non-current receivables | 2,964,785 | 3,232,079 | -267,294 | 25,125 |
Property and equipment-At cost less accumulated depreciation | 876,444 | 718,825 | 157,619 | 7,427 |
Other assets | 150,052 | 158,289 | -8,237 | 1,272 |
Total | 8,843,388 | 9,522,309 | -678,921 | 74,944 |
LIABILITIES AND SHAREHOLDERS' EQUITY | Millions of yen | Millions of U.S. dollars |
||
1999 | 1998 | Increase or [-]decrease |
1999 | |
Current liabilities: | ||||
Short-term debt | 1,845,842 | 2,314,957 | -469,115 | 15,643 |
Current maturities of long-term debt | 459,056 | 481,077 | -22,021 | 3,890 |
Payables-trade: | ||||
Notes and acceptances | 311,438 | 372,419 | -60,981 | 2,639 |
Accounts | 1,464,234 | 1,568,285 | -104,051 | 12,409 |
Affiliated companies | 61,024 | 80,701 | -19,677 | 517 |
Accrued income taxes | 17,059 | 19,160 | -2,101 | 145 |
Other accrued expenses | 68,697 | 73,800 | -5,103 | 582 |
Advances from customers | 145,050 | 208,623 | -63,573 | 1,229 |
Other current liabilities | 85,408 | 92,424 | -7,016 | 724 |
Total current liabilities | 4,457,808 | 5,211,446 | -753,638 | 37,778 |
Long-term debt, less current maturities | 3,078,621 | 2,893,111 | 185,510 | 26,090 |
Accrued pension and severance liabilities | 132,170 | 134,149 | -1,979 | 1,120 |
Deferred income taxes | 165,348 | 225,749 | -60,401 | 1,401 |
Minority interests | 59,927 | 48,471 | 11,456 | 508 |
Shareholders' equity: | ||||
Common stock | 126,609 | 126,609 | - | 1,073 |
Capital surplus | 179,491 | 179,491 | - | 1,521 |
Retained earnings: | ||||
Appropriated for legal reserve | 32,346 | 30,815 | 1,531 | 274 |
Unappropriated | 684,425 | 667,307 | 17,118 | 5,800 |
Accumulated other comprehensive income: | ||||
Net unrealized gains on securities available for sale | 156,290 | 182,418 | -26,128 | 1,325 |
Foreign currency translation and other adjustments | (229,647) | (177,257) | -52,390 | (1,946) |
Total shareholders' equity | 949,514 | 1,009,383 | -59,869 | 8,047 |
Total | 8,843,388 | 9,522,309 | -678,921 | 74,944 |
The consolidated financial statements have been prepared on the basis of accounting principles generally accepted in the United States of America.
Mitsubishi Corporation
and subsidiaries
SEGMENT INFORMATION (US GAAP)
Years ended March 31, 1999 and 1998
In 1999, Mitsubishi Corporation adopted SFAS No.131 "Disclosures about Segments of an Enterprise and Related Information". It requires the company to report information about operating segments in financial statements. Operating segments are defined as components of an enterprise about which separate information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The companies' business activities are managed internally by commodity group for which the executive management also decides how to allocate resources and assess performance. The companies' operating segments information for the years ended March 31, 1999 and 1998 were as follows;
Year ended March 31,1999
[SEGMENT INFORMATION BY COMMODITIES]
Millions of yen | |||||||||
---|---|---|---|---|---|---|---|---|---|
Information Systems & Services |
Fuels | Metals | Machinery | Chemicals | Living Essentials |
Total | Eliminations or Unallocated |
Consolidated | |
Trading transactions: |
|||||||||
Outside customers |
709,957 | 1,953,811 | 2,967,373 | 2,893,133 | 1,321,161 | 3,770,420 | 13,615,855 | 84,701 | 13,700,556 |
Inter- segment |
575 | 24,448 | 85,972 | 4,945 | 1,802 | 2,455 | 120,197 | (120,197) | - |
Total | 710,532 | 1,978,259 | 3,053,345 | 2,898,078 | 1,322,963 | 3,772,875 | 13,736,052 | (35,496) | 13,700,556 |
Net income |
1,909 | 9,613 | 1,044 | 2,925 | 2,453 | 10,075 | 28,019 | 3,167 | 31,186 |
Segment assets |
330,098 | 571,083 | 1,043,847 | 1,968,032 | 577,470 | 1,223,809 | 5,714,339 | 3,129,049 | 8,843,388 |
Depreciation and amortization |
2,958 | 8,427 | 7,473 | 10,399 | 8,157 | 12,069 | 49,483 | 16,216 | 65,699 |
Capital expenditures for long-lived segment assets |
42,380 | 22,014 | 13,324 | 10,675 | 32,779 | 18,160 | 139,332 | 35,401 | 174,733 |
[GEOGRAPHIC INFORMATION]
Millions of yen | |
---|---|
Trading Transactions | |
Japan | 11,381,171 |
U.S.A. | 936,400 |
United Kingdom | 627,881 |
Others | 755,104 |
Total | 13,700,556 |
Millions of yen | |
---|---|
Long-lived Assets | |
Japan | 603,843 |
U.S.A. | 123,772 |
Others | 235,393 |
Total | 963,008 |
Year ended March 31,1999
[SEGMENT INFORMATION BY COMMODITIES]
Millions of U.S. dollars | |||||||||
---|---|---|---|---|---|---|---|---|---|
Information Systems & Services |
Fuels | Metals | Machinery | Chemicals | Living Essentials |
Total | Eliminations or Unallocated |
Consolidated | |
Trading transactions: |
|||||||||
Outside customers |
6,016 | 16,558 | 25,147 | 24,518 | 11,196 | 31,953 | 115,388 | 718 | 116,106 |
Inter- segment |
5 | 207 | 729 | 42 | 15 | 21 | 1,019 | (1,019) | - |
Total | 6,021 | 16,765 | 25,876 | 24,560 | 11,211 | 31,974 | 116,407 | (301) | 116,106 |
Net income |
16 | 81 | 9 | 25 | 21 | 85 | 237 | 27 | 264 |
Segment assets |
2,798 | 4,840 | 8,846 | 16,678 | 4,894 | 10,371 | 48,427 | 26,517 | 74,944 |
Depreciation and amortization |
25 | 72 | 63 | 88 | 69 | 102 | 419 | 138 | 557 |
Capital expenditures for long-lived segment assets |
359 | 187 | 113 | 90 | 278 | 154 | 1,181 | 300 | 1,481 |
[GEOGRAPHIC INFORMATION]
Millions of U.S. dollars | |
---|---|
Trading Transactions | |
Japan | 96,451 |
U.S.A. | 7,935 |
United Kingdom | 5,321 |
Others | 6,399 |
Total | 116,106 |
Millions of U.S. dollars | |
---|---|
Long-lived Assets | |
Japan | 5,117 |
U.S.A. | 1,049 |
Others | 1,995 |
Total | 8,161 |
Year ended March 31,1998
[SEGMENT INFORMATION BY COMMODITIES]
Millions of yen | |||||||||
---|---|---|---|---|---|---|---|---|---|
Information Systems & Services |
Fuels | Metals | Machinery | Chemicals | Living Essentials |
Total | Eliminations or Unallocated |
Consolidated | |
Trading transactions: |
|||||||||
Outside customers |
642,712 | 2,511,045 | 3,938,550 | 3,347,623 | 1,467,617 | 3,951,169 | 15,858,716 | (33,063) | 15,825,653 |
Inter- segment |
973 | 40,088 | 101,549 | 15,511 | 1,252 | 6,191 | 165,564 | (165,564) | - |
Total | 643,685 | 2,551,133 | 4,040,099 | 3,363,134 | 1,468,869 | 3,957,360 | 16,024,280 | (198,627) | 15,825,653 |
Net income |
4,427 | 16,154 | 8,781 | 24,345 | 1,544 | 5,686 | 60,937 | (13,301) | 47,636 |
Segment assets |
273,925 | 589,003 | 1,148,237 | 1,901,323 | 626,174 | 1,219,253 | 5,757,915 | 3,764,394 | 9,522,309 |
Depreciation and amortization |
2,020 | 7,318 | 6,053 | 10,922 | 8,659 | 9,008 | 43,980 | 19,796 | 63,776 |
Capital expenditures for long-lived segment assets |
21,519 | 5,789 | 9,696 | 13,847 | 17,941 | 25,459 | 94,251 | 71,368 | 165,619 |
[GEOGRAPHIC INFORMATION]
Millions of yen | |
---|---|
Trading Transactions | |
Japan | 12,673,226 |
United Kingdom | 1,282,908 |
U.S.A. | 993,424 |
Others | 876,095 |
Total | 15,825,653 |
Millions of yen | |
---|---|
Long-lived Assets | |
Japan | 527,791 |
U.S.A. | 115,865 |
Others | 167,036 |
Total | 810,692 |
- "Eliminations or Unallocated" include income and expense that are not allocated to the individual operating segments.
- Unallocated common assets included in the column of "Eliminations or Unallocated" for the years ended March 31, 1999 and 1998 were 3,421,458 million yen ($28,995 million) and 4,052,293 million yen, respectively. The assets mainly consist of cash, time deposits and securities for financial activities.
- Trading transactions are attributed to geographic areas based on the locations of the assets producing revenues.
MITSUBISHI CORPORATION REPORTS
DECLINE IN PERFORMANCE
Further Cost Reduction Support Plans for Earnings Recovery
TOKYO, May 20, 1999.....Mitsubishi Corporation today announced consolidated results, using accounting principles generally accepted in the United States, for the year ended March 31,1999.
Commenting on the performance for the year, Mr. Koji Furukawa, executive vice president said, "Our stable source of earnings in the natural resources and retail areas, where we have strong market shares and competitive advantage, has supported our consolidated performance. However the overall result was a decline in net sales and gross trading profit, reflecting the state of the Japanese economy and conditions in Asia. Management is taking further steps to change the corporate structure to strengthen competitive advantage not only by continuing to reduce costs but also encouraging the selective shift of corporate resources. Thus when the economy recovers, we expect a sharp rebound in net income within two years to a level, around 100 billion yen, that management finds more acceptable."
Results for March 1999 fiscal year
The 2,125.1 billion yen decrease, to 13.700.6 billion yen, in total trading transactions was due primarily to declines in both the domestic market and in international markets, principally Asia where demand for capital goods fell sharply.
Gross trading profit declined 0.9% to 582.9 billion yen. The growing profits of consolidated operations, both domestic and international, was not sufficient to offset the decline for the parent company. From another perspective, the 5.3 billion yen decline was the net result of increases for living essentials and metals and declines for machinery and chemicals.
Selling, general and administrative expenses rose 2.4%, to 527.5 billion yen, with higher expenses incurred by consolidated subsidiaries as their revenues expanded.
The provision for doubtful receivables was 27.3 billion yen for the current period and 22.1 billion yen for the previous year.
Operating income declined 44.9% to 28.1 billion yen.
Among other income and expenses, there was an increase in net interest expenses and declines for dividend income and gains on property and equipment. These were offset in part by higher gains on marketable securities and investments.
Income from consolidated operations before income taxes declined 46.4% to 33.9 billion yen.
Equity in earnings of affiliated operations was 18.2 billion yen with contributions mainly from LNG projects.
Net income declined 34.5% to 31.2 billion yen and net income per share was 19.90 yen, compared with 30.40 yen the previous year.
For the fiscal year ending in March 2000, management foresees a relatively unchanged environment, with adverse conditions in Japan and Asia. The forecasts are net income of 20 billion yen, with interim net income of 8 billion yen, and total trading transactions of 13.2 trillion yen, with an interim level of 6.3 trillion yen. Net income per share is forecast at 12.76 yen.
Prospects for March 2000 and 2001 fiscal years
The projected decline in net income for the current fiscal year is due to steps being taken by the parent company to significantly reduce compensation expenses and set the stage for a sharp upturn in the March 2001 year when net income is forecast to reach 100 billion yen.
During the next year the parent company will abolish early retirement allowances as part of the early retirement program that is projected to cost 50 billion yen and to reduce the number of employees over two years by 1,000 from the current 8,000. Along with the continuing effort to eliminate seniority system, compensation costs will also become more flexible, with the introduction of a bonus system for managers and employees that links their bonuses to the operating performance of the businesses for which they are responsible.
Over the next two years, management also projects an upturn in the profitability of resource development projects as the prices of LNG, nonferrous metals and steel-related raw materials are expected to recover from their currently depressed levels. We also foresee a renewed stream of orders for plants and capital goods from Asia. An upturn in the market for motor vehicles in ASEAN and Europe should also contribute to a rebound in earnings. This period should also see rapid growth for the aerospace sector, including rockets and digital satellite information. A sharp rebound in these areas will be strengthened by finesse and muscle created from combined advantages, that is, expanded customer networks and applications for finance and electronic commerce, and new logistic systems relying on continued advances in information technology.
Given the outlook for performance for the next two years, management anticipates that it will maintain annual dividends at 8 yen per share.
These forecasts are based on current expectations that are subject to risks and uncertainties. These forecasts are forward-looking and actual results may differ materially.
# # #
For further information contact:
Mitsubishi Corporation
Investor Relations Office
Yoshihiro Kuroi (Mr.)
Phone 81-3-3210-8580
Fax 81-3-3210-8583
e-mail ir@tk.mitsubishi.co.jp