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Fujitsu Records Valuation Loss on Investment and Revises Fiscal 2005 Full-Year Unconsolidated Financial Results Forecast
Fujitsu Limited
Tokyo, January 31, 2006
Fujitsu Limited today announced that, with respect to its unconsolidated financial results, it has recorded a valuation loss on investment in its U.S.-based affiliated company, Spansion Inc. (hereafter, "Spansion"), resulting from its initial public offering on the NASDAQ stock market last December. Along with this, as described below, Fujitsu has revised its unconsolidated earnings forecast for the full-year fiscal period ending March 2006, which it had previously announced on October 27, 2005. Fujitsu's full-year consolidated earnings forecast remains unchanged.
| 1. |
Valuation Loss on Investment |
|
| Because the fair market value of the Spansion shares at the time of the IPO was notably lower than the book value of the shares recorded on Fujitsu's unconsolidated balance sheet*, and in light of the ensuing movement in the market price of Spansion shares until now, Fujitsu has recorded a valuation loss on investment. |
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|
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| *Refers to the book value of the shares of Fujitsu's stock in a U.S.-based wholly owned subsidiary that held Fujitsu's part of the ownership in Spansion. Upon Spansion's IPO, Fujitsu made a contribution of the shares of said U.S.-based subsidiary and received the shares of the newly established Spansion Inc. in exchange for such contribution. |
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| The impact of the above on Fujitsu's unconsolidated profit and loss is a valuation loss on investment of 39.2 billion yen, and a reduction of 23.3 billion yen in net income. In regard to consolidated financial results, the company has recorded a loss of 8.4 billion yen on change in ownership interest at the time of Spansion's IPO. |
| 2. |
Revised FY 2005 Full-Year Unconsolidated Financial Results Forecast
(April 1, 2005 – March 31, 2006) |
|
|
Net Sales |
Operating Income
(Loss) |
Net Income
(Loss) |
| Previous Forecast* (A) |
2,830.0 |
45.0 |
30.0 |
| Revised Forecast (B) |
2,830.0 |
30.0 |
15.0 |
| Increase or Decrease (B – A) |
-- |
- 15.0 |
-15.0 |
| Percentage of Increase or Decrease |
-- |
-33.3% |
-50% |
FY 2004 Results
(For full year ended March 2005) |
2,846.2 |
30.6 |
(39.8) |
| * Previous projection as of October 27, 2005 |
Explanation
With respect to projected unconsolidated operating income, due to decreased profits mainly on system products as a result of intensified competition both inside and outside Japan, Fujitsu has reduced its full-year forecast by 15.0 billion yen from the forecast previously issued last October. This reduction in operating income is expected to be offset by an increase in dividend earnings and currency transaction gains under other income (expenses). Regarding projected unconsolidated net income, due to the abovementioned loss on investment, the forecast has been revised downward by 15.0 billion yen.
As previously planned, the company intends to issue a 3 yen per share year-end dividend.
About Fujitsu
Fujitsu is a leading provider of customer-focused IT and communications solutions for the global marketplace. Pace-setting device technologies, highly reliable computing and communications products, and a worldwide corps of systems and services experts uniquely position Fujitsu to deliver comprehensive solutions that open up infinite possibilities for its customers' success. Headquartered in Tokyo, Fujitsu Limited (TSE: 6702) reported consolidated revenues of 4.7 trillion yen (US$44.5 billion) for the fiscal year ended March 31, 2005. For more information, please see www.fujitsu.com
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Company:Fujitsu Limited
Date: 31 January, 2006
City: Tokyo
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