Notes to Consolidated Financial Statements
NSK Ltd. and Consolidated Subsidiaries For the year ended March 31, 2007
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: 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: 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: includes ball screws, linear guides, XY tables, and megatorque motors, photofabrication equipment for LCD color filter production
- Other segment: 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, 2007 and 2006 is summarized as follows:
| Millions of yen | |||||||
| Year ended March 31, 2007 | Industrial machinery bearings |
Automotive products |
Precision machinery and parts |
Other | Total | Eliminations and other |
Consolidated |
|---|---|---|---|---|---|---|---|
| Sales to third parties | ¥216,338 | ¥397,863 | ¥77,719 | ¥25,303 | ¥717,225 | ¥ - | ¥717,225 |
| Intersegment sales and transfers |
- | - | - | 19,812 | 19,812 | (19,812) | - |
| Total | 216,338 | 397,863 | 77,719 | 45,116 | 737,037 | (19,812) | 717,225 |
| Operating expenses | 186,786 | 375,175 | 66,179 | 42,717 | 670,858 | (16,016) | 654,842 |
| Operating income (loss) |
¥ 29,551 | ¥ 22,687 | ¥11,540 | ¥ 2,398 | ¥ 66,178 | ¥ (3,795) | ¥ 62,383 |
| Total assets | ¥228,627 | ¥291,650 | ¥64,177 | ¥84,748 | ¥669,203 | ¥146,585 | ¥815,788 |
| Depreciation | ¥ 13,144 | ¥ 17,564 | ¥ 3,436 | ¥ 2,375 | ¥ 36,519 | ¥ (1,202) | ¥ 35,316 |
| Capital expenditures | ¥ 12,174 | ¥ 19,550 | ¥ 3,402 | ¥ 3,038 | ¥ 38,164 | ¥ (475) | ¥ 37,689 |
| Thousands of U.S. dollars | |||||
| Year ended March 31, 2007 | Industrial machinery bearings |
Automotive products |
Precision machinery and parts |
Other | Total |
|---|---|---|---|---|---|
| Sales to third parties | $1,833,373 | $3,371,720 | $658,636 | $214,432 | $6,078,178 |
| Intersegment sales and transfers | - | - | - | 167,898 | 167,898 |
| Total | 1,833,373 | 3,371,720 | 658,636 | 382,339 | 6,246,076 |
| Operating expenses | 1,582,932 | 3,179,449 | 560,839 | 362,008 | 5,685,237 |
| Operating income (loss) | $ 250,432 | $ 192,263 | $ 97,797 | $ 20,322 | $ 560,831 |
| Total assets | $1,937,517 | $2,471,610 | $543,873 | $718,203 | $5,671,212 |
| Depreciation | $ 111,390 | $ 148,847 | $ 29,119 | $ 20,127 | $ 309,483 |
| Capital expenditures | $ 103,169 | $ 165,678 | $ 28,831 | $ 25,746 | $ 323,424 |
| Year ended March 31, 2007 | Eliminations and other |
Consolidated | |||
| Sales to third parties | $ - | $6,078,178 | |||
| Intersegment sales and transfers | (167,898) | - | |||
| Total | (167,898) | 6,078,178 | |||
| Operating expenses | (135,729) | 5,549,508 | |||
| Operating income (loss) | $ (32,161) | $ 528,669 | |||
| Total assets | $1,242,246 | $6,913,458 | |||
| Depreciation | $ (10,186) | $ 299,288 | |||
| Capital expenditures | $ (4,025) | $ 319,398 | |||
a) As described in Note 1(i), effective the year ended March 31, 2007, the Company’s consolidated subsidiaries in the United Kingdom have changed their method of accounting for retirement benefit plans to accounting for such plans in accordance with accounting principles generally accepted in Japan, from accounting for them in accordance with those in the United Kingdom. The effect of this change was to increase operating income for “Industrial machinery bearings” segment by ¥14 million ($119 thousand), to decrease operating income for “Automotive products” segment and “Precision machinery and parts” segment by ¥15 million ($127 thousand) and ¥4 million ($34 thousand), respectively, for the year ended March 31, 2007 as compared with the corresponding amounts which would have been recorded under the previous method.
| Millions of yen | |||||||
| Year ended March 31, 2006 | Industrial machinery bearings |
Automotive products |
Precision machinery and parts |
Other | Total | Eliminations and other |
Consolidated |
|---|---|---|---|---|---|---|---|
| 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 | ¥639,522 | ¥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 |
The geographical segment information for the Company and its consolidated subsidiaries for the years ended March 31, 2007 and 2006 is summarized as follows:
| Millions of yen | |||||||
| Year ended March 31, 2007 | Japan | The Americas | Europe | Asia | Total | Eliminations and other |
Consolidated |
|---|---|---|---|---|---|---|---|
| Sales to third parties |
¥416,479 | ¥102,349 | ¥121,101 | ¥77,294 | ¥717,225 | ¥ - | ¥717,225 |
| Interarea sales and transfers |
105,858 | 571 | 6,479 | 21,399 | 134,309 | (134,309) | - |
| Total | 522,338 | 102,921 | 127,581 | 98,694 | 851,534 | (134,309) | 717,225 |
| Operating expenses | 474,943 | 99,114 | 120,927 | 89,241 | 784,227 | (129,384) | 654,842 |
| Operating income (loss) |
¥ 47,394 | ¥ 3,806 | ¥ 6,653 | ¥ 9,453 | ¥ 67,307 | ¥ (4,924) | ¥ 62,383 |
| Total assets | ¥639,878 | ¥ 69,466 | ¥ 89,871 | ¥94,528 | ¥893,744 | ¥(77,955) | ¥815,788 |
| Thousands of U.S. dollars | |||||
| Year ended March 31, 2007 | Japan | The Americas | Europe | Asia | Total |
|---|---|---|---|---|---|
| Sales to third parties |
$3,529,483 | $867,364 | $1,026,280 | $655,034 | $6,078,178 |
| Interarea sales and transfers | 897,102 | 4,839 | 54,907 | 181,347 | 1,138,212 |
| Total | 4,426,593 | 872,212 | 1,081,195 | 836,390 | 7,216,390 |
| Operating expenses | 4,024,941 | 839,949 | 1,024,805 | 756,280 | 6,645,992 |
| Operating income (loss) | $ 401,644 | $ 32,254 | $ 56,381 | $ 80,110 | $ 570,398 |
| Total assets | $5,422,695 | $588,695 | $ 761,619 | $801,085 | $7,574,102 |
| Year ended March 31, 2007 | Eliminations and other |
Consolidated | |||
| Sales to third parties |
$ - | $6,078,178 | |||
| Interarea sales and transfers | (1,138,212) | - | |||
| Total | (1,138,212) | 6,078,178 | |||
| Operating expenses | (1,096,475) | 5,549,508 | |||
| Operating income (loss) | $ (41,729) | $ 528,669 | |||
| Total assets | $(660,636) | $6,913,458 | |||
b) As described in Note 1(i), effective the year ended March 31, 2007, the Company’s consolidated subsidiaries in the United Kingdom have changed their method of accounting for retirement benefit plans to accounting for such plans in accordance with accounting principles generally accepted in Japan, from accounting for them in accordance with those in the United Kingdom. The effect of this change was to decrease operating income for “Europe” segment by ¥5 million ($42 thousand) for the year ended March 31, 2007 from the corresponding amount which would have been recorded under the previous method.
| Millions of yen | |||||||
| Year ended March 31, 2006 | Japan | The Americas | Europe | Asia | Total | Eliminations and other |
Consolidated |
|---|---|---|---|---|---|---|---|
| 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 |
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, 2007 and 2006 are summarized as follows:
| Millions of yen | ||||
| Year ended March 31, 2007 | The Americas | Europe | Asia | Total |
|---|---|---|---|---|
| Overseas sales | ¥105,111 | ¥121,698 | ¥126,021 | ¥352,830 |
| Consolidated net sales | ¥717,225 | |||
| Thousands of U.S. dollars | ||||
| Year ended March 31, 2007 | The Americas | Europe | Asia | Total |
|---|---|---|---|---|
| Overseas sales | $890,771 | $1,031,339 | $1,067,975 | $2,990,085 |
| Consolidated net sales | $6,078,178 | |||
| Overseas sales as a percentage of consolidated net sales |
14.6% | 17.0% | 17.6% | 49.2% |
| Millions of yen | ||||
| Year ended March 31, 2006 | The Americas | Europe | Asia | Total |
|---|---|---|---|---|
| Overseas sales | ¥92,367 | ¥98,165 | ¥107,880 | ¥298,413 |
| Consolidated net sales | ¥628,474 | |||
| Overseas sales as a percentage of consolidated net sales |
14.7% | 15.6% | 17.2% | 47.5% |