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Home | Investors | Financial information | Annual Report 2006

Annual Report 2006

Notes to Consolidated Financial Statements

19. Segment Information

The Company and its subsidiaries are primarily engaged in the manufacture and sales of products in the industrial machinery bearings segment, the automotive products segment and the precision machinery and parts segment. The main products in each segment are as follows:

Industrial machinery bearings segment:	which includes standard ball bearings (miniature and small-sized ball bearings, normal-sized ball bearings) and bearings for general industrial use (tapered and cylindrical roller bearings, large-sized ball bearings)
Automotive products segment:	which includes hub unit bearings, needle roller bearings, small-sized tapered roller bearings, standard ball bearings, steering columns, electric power steering systems and automatic transmission components
Precision machinery and parts segment:	which includes ball screws, linear guides, XY tables and megatorque motors
Other segment:	which includes plant and equipment, steel balls and other products.

The business segment information for the Company and its consolidated subsidiaries for the years ended March 31, 2006 and 2005 is summarized as follows:

Year ended March 31, 2006	Industrial machinery bearings	Automotive products	Precision machinery and parts	Other	Total	Eliminations and other	Consolidated
Millions of yen
Sales to third parties	¥195,556	¥353,124	¥65,831	¥13,962	¥628,474	¥ -	¥628,474
Intersegment sales and transfers	-	-	-	9,562	9,562	(9,562)	-
Total	195,556	353,124	65,831	23,525	638,037	(9,562)	628,474
Operating expenses	173,496	335,735	60,263	22,220	591,717	(5,794)	585,922
Operating income (loss)	¥ 22,060	¥ 17,388	¥ 5,567	¥ 1,304	¥ 46,320	¥ (3,768)	¥ 42,552
Total assets	¥227,506	¥263,429	¥60,889	¥87,698	¥639,552	¥103,509	¥743,032
Depreciation	¥ 11,662	¥ 15,455	¥ 3,868	¥ 298	¥ 31,284	¥ (1,185)	¥ 30,099
Capital expenditures	¥ 17,088	¥ 30,048	¥ 2,700	¥ 397	¥ 50,236	¥ (1,452)	¥ 48,784

Year ended March 31, 2006	Industrial machinery bearings	Automotive products	Precision machinery and parts	Other	Total	Eliminations and other	Consolidated
Thousands of U.S. dollars
Sales to third parties	$1,671,419	$3,018,154	$562,658	$119,333	$5,371,573	$ -	$5,371,573
Intersegment sales and transfers	-	-	-	81,726	81,726	(81,726)	-
Total	1,671,419	3,018,154	562,658	201,068	5,453,308	(81,726)	5,371,573
Operating expenses	1,482,872	2,869,530	515,068	189,915	5,057,410	(49,521)	5,007,880
Operating income (loss)	$ 188,547	$ 148,615	$ 47,581	$ 11,145	$ 395,897	$(32,205)	$ 363,692
Total assets	$1,944,496	$2,251,530	$520,419	$749,556	$5,466,000	$ 884,692	$6,350,701
Depreciation	$ 99,675	$ 132,094	$ 33,060	$ 2,547	$ 267,385	$(10,128)	$ 257,256
Capital expenditures	$ 146,051	$ 256,821	$ 23,077	$ 3,393	$ 429,368	$(12,410)	$ 416,957

Year ended March 31, 2005	Industrial machinery bearings	Automotive products	Precision machinery and parts	Other	Total	Eliminations and other	Consolidated
Millions of yen
Sales to third parties	¥185,473	¥316,169	¥64,186	¥15,160	¥580,989	¥ -	¥580,989
Intersegment sales and transfers	-	-	-	8,078	8,078	(8,078)	-
Total	185,473	316,169	64,186	23,239	589,067	(8,078)	580,989
Operating expenses	165,523	300,420	59,420	21,395	546,760	(4,054)	542,706
Operating income (loss)	¥ 19,949	¥ 15,748	¥ 4,765	¥ 1,844	¥ 42,307	¥(4,024)	¥ 38,283
Total assets	¥238,574	¥233,148	¥66,178	¥20,107	¥558,009	¥ 70,574	¥628,583
Depreciation	¥ 10,900	¥ 13,759	¥ 3,659	¥ 314	¥ 28,633	¥(1,197)	¥ 27,435
Capital expenditures	¥ 13,845	¥ 19,614	¥ 5,659	¥ 192	¥ 39,312	¥(1,152)	¥ 38,160

a) As described in Note 1(i), the Company and domestic consolidated subsidiaries have early adopted amended provisions to the accounting standard for retirement benefits effective the year ended March 31, 2005. As a result of the early adoption of these amendments, operating income for “Industrial machinery bearings” segment, “Automotive products” segment and “Precision machinery and parts” segment increased by ¥167 million, ¥162 million and ¥9 million, respectively, for the year ended March 31, 2005 over the corresponding amounts which would have been recorded if the previous method had been followed.

b) As described in Note 1(i), the Company’s consolidated subsidiaries in the United Kingdom have implemented early adoption of a new accounting standard for retirement benefits effective the year ended March 31, 2005. The effect of this change was to increase operating income for “Industrial machinery bearings” segment, “Automotive products” segment and “Precision machinery and parts” segment by ¥186 million, ¥30 million and ¥12 million, respectively, for the year ended March 31, 2005 over the corresponding amounts which would have been recorded if the previous method had been followed.

The geographical segment information for the Company and its consolidated subsidiaries for the years ended March 31, 2006 and 2005 is summarized as follows:

Year ended March 31, 2006	Japan	The Americas	Europe	Asia	Total	Eliminations and other	Consolidated
Millions of yen
Sales to third parties	¥379,103	¥89,879	¥97,457	¥62,034	¥628,474	¥ -	¥628,474
Interarea sales and transfers	97,063	484	7,479	13,746	118,772	(118,772)	-
Total	476,166	90,363	104,936	75,780	747,247	(118,772)	628,474
Operating expenses	440,610	87,954	100,699	70,635	699,900	(113,978)	585,922
Operating income (loss)	¥ 35,556	¥ 2,408	¥ 4,236	¥ 5,145	¥ 47,347	¥ (4,794)	¥ 42,552
Total assets	¥631,829	¥65,243	¥78,207	¥82,245	¥857,526	¥(114,494)	¥743,032

Year ended March 31, 2006	Japan	The Americas	Europe	Asia	Total	Eliminations and other	Consolidated
Thousands of U.S. dollars
Sales to third parties	$3,240,197	$768,197	$832,966	$530,205	$5,371,573	$ -	$5,371,573
Interarea sales and transfers	829,598	4,137	63,923	117,487	1,015,145	(1,015,145)	-
Total	4,069,795	772,333	896,889	647,692	6,386,726	(1,015,145)	5,371,573
Operating expenses	3,765,897	751,744	860,675	603,718	5,982,051	(974,171)	5,007,880
Operating income (loss)	$ 303,897	$ 20,581	$ 36,205	$ 43,974	$ 404,675	$ (40,974)	$ 363,692
Total assets	$5,400,248	$557,632	$668,436	$702,949	$7,329,282	$(978,581)	$6,350,701

Year ended March 31, 2005	Japan	The Americas	Europe	Asia	Total	Eliminations and other	Consolidated
Millions of yen
Sales to third parties	¥355,179	¥79,871	¥93,343	¥52,595	¥580,989	¥ -	¥580,989
Interarea sales and transfers	84,280	644	6,825	11,610	103,361	(103,361)	-
Total	439,460	80,515	100,168	64,205	684,350	(103,361)	580,989
Operating expenses	408,042	77,973	95,378	60,942	642,337	(99,631)	542,706
Operating income (loss)	¥ 31,417	¥ 2,542	¥ 4,790	¥ 3,262	¥ 42,013	¥ (3,730)	¥ 38,283
Total assets	¥571,460	¥55,257	¥73,906	¥62,985	¥763,609	¥(135,025)	¥628,583

c) As described in Note 1 (i), the Company and domestic consolidated subsidiaries have early adopted amended provisions to the accounting standard for retirement benefits effective the year ended March 31, 2005. As a result of the early adoption of these amendments, operating income for “Japan” segment increased by ¥339 million for the year ended March 31, 2005 over the corresponding amount which would have been recorded if the previous method had been followed.

d) As described in Note 1 (i), the Company’s consolidated subsidiaries in the United Kingdom have implemented early adoption of a new accounting standard for retirement benefits effective the year ended March 31, 2005. The effect of this change was to increase operating income for “Europe” segment by ¥229 million for the year ended March 31, 2005 over the corresponding amount which would have been recorded if the previous method had been followed.

Overseas sales, which include export sales of the Company and its domestic consolidated subsidiaries and sales (other than exports to Japan) of the foreign consolidated subsidiaries, for the years ended March 31, 2006 and 2005 are summarized as follows:

Year ended March 31, 2006	The Americas	Europe	Asia	Total
Millions of yen
Overseas sales	¥92,367	¥98,165	¥107,880	¥298,413
Consolidated net sales				¥628,474

Year ended March 31, 2006	The Americas	Europe	Asia	Total
Thousands of U.S. dollars
Overseas sales	$789,462	$839,017	$922,051	$2,550,538
Consolidated net sales				$5,371,573
Overseas sales as a percentage of consolidated net sales	14.7%	15.6%	17.2%	47.5%

Year ended March 31, 2005	The Americas	Europe	Asia	Total
Millions of yen
Overseas sales	¥82,279	¥93,625	¥94,838	¥270,743
Consolidated net sales				¥580,989
Overseas sales as a percentage of consolidated net sales	14.2%	16.1%	16.3%	46.6%


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