FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
REPORT OF FOREIGN ISSUER
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the month of May, 2001
COMMISSION FILE NUMBER: 1-7239
KOMATSU LTD.
...............................................
Translation of registrant's name into English
3-6 Akasaka 2-chome, Minato-ku, Tokyo, Japan
............................................
Address of principal executive offices
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INFORMATION TO BE INCLUDED IN REPORT
------------------------------------
1. Three company announcements made on May 7, 2001.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
KOMATSU LTD.
-----------------------------
(Registrant)
Date: May 7, 2001 By: /s/ Masaru Fukase
------------------------
Masaru Fukase
Senior Executive Officer
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NEWS RELEASE
Komatsu Ltd.
2-3-6 Akasaka, Minato-ku,
Tokyo 107-8414, Japan
Public Relations Section
Tel: +81-3-5561-2616
0012(1689)
May 7, 2001
URL: http://www.komatsu.com/
KOMATSU ANNOUNCES CONSOLIDATED RESULTS FOR FISCAL 2001
AND OUTLOOK FOR FISCAL 2002
--------------------------------------------------------------------------------
The accompanying consolidated financial information is prepared in accordance
with generally accepted accounting principles in the United States of America.
Komatsu Ltd. posted consolidated net sales of (Yen)1,096.3 billion (US$8,701
million, at US$1=(Yen)126) for fiscal 2001 ended March 31, 2001, up 3.9% over
the previous fiscal year. Operating income for the fiscal year advanced 60.6%,
to (Yen)27.8 billion (US$221 million). Net income for the fiscal year declined
48.4%, to (Yen)6.9 billion (US$55 million).
Millions of yen and US dollar, except per share amounts
----------------------------------------------------------------------------------------------------------------
2001 2000 2001
----------------------------------------------------------------------------------------------------------------
Net sales (Yen)1,096,369 (Yen)1,055,654 $ 8,701
Japan 586,865 553,822 4,658
Overseas 509,504 501,832 4,043
Operating income 27,815 17,318 221
Net income 6,913 13,395 55
Net income per share --- Basic (Yen) 7.24 (Yen) 13.85 (cents) 5.75
----------------------------------------------------------------------------------------------------------------
1. Business Performance
Management Environment
----------------------
During the fiscal year under review, the Japanese economy accommodated some
signs of moderate autonomous recovery centering on private-sector corporations
in the first half period. In the last half period, however, signs of slowing
capital investment coupled with reduced exports and industrial production made
the Japanese economic mindset less positive. Overseas, the United States
economy, which had maintained the record-high length of buoyancy, began to slow
down. European economies remained strong in general, albeit with uncertainty of
the depreciation of the euro. The recovery pace of overall Asian economies
slowed down, leaving their uncertainty intact.
Under such an environment, Komatsu Ltd. positioned the fiscal year
under review as a year of further strides under the "G" to the 21/st/ mid-range
management strategy (see page 8 for more information) and worked to improve
performance.
For its construction and mining equipment business, the Company
completed the restructuring program for Japanese production initiated in 1998
with the closings of Tachikawa and Saitama plants of Komatsu Zenoah for
consolidation of production at the Kawagoe Plant (formerly Kawagoe Plant of
Komatsu). The Company also worked to expand its business domain by adding IT
utilization to its competitive advantages of global sales, service and
production networks, "Quality and Reliability"-backed brand power and in-house
production of key components.
Back on a recovery track, Komatsu's electronics business continued to
facilitate differentiation of products and technologies. The Company also worked
to promote operations designed to make effective and timely responses to drastic
changes in the business environment.
Komatsu also worked to reinforce its businesses where it can
demonstrate its technological superiority, including sale of shares held in
Komatsu Construction Co., Ltd., establishment of GIGAPHOTON INC. with USHIO INC.
in the area of Excimer laser business, and acquisition of Hensley Industries,
Inc., a U.S. manufacturer of parts and components for construction and mining
equipment.
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2. Business Results by Operation
Construction and Mining Equipment
Sales of construction and mining equipment for fiscal 2001 declined 3.9% from
the previous fiscal year, to (Yen)718.1 billion (US$5,700 million), consisting
of (Yen)305.5 billion (US$2,425 million), up 4.7% in Japan and (Yen)412.5
billion (US$3,274 million), down 9.5% outside of Japan.
In fiscal 2001 under review, Japanese demand for construction equipment
declined slightly, and Komatsu teamed up with its distributors and affiliated
rental companies across the country and worked to expand earnings by effectively
utilizing information networks for sales, rental and service. The Company
concerted its efforts to step up sales of major products such as minimal
rear-swing radius hydraulic excavators, large machines and equipment for
environmental conservation, such as the mobile crusher/recycler series. The
Company also focused on delivering value to customers by holding the Komatsu
Management Strategy Seminar and through the E-KOMATSU Net for information and
service provision on the Internet.
In the area of Information Technology (IT) utilization, the Company
continued to introduce the "KOMTRAX," a construction equipment operation
management system designed to improve overall business efficiency of the rental
business, to affiliated rental companies. The Company also developed new,
original business models in fiscal 2001. Such initiatives include joint
operation of a new service for construction equipment customers on the Internet
with RICOH Co., Ltd. and a web site (www.anahori.com) dedicated to sales of mini
excavators, the first one by the Japanese construction equipment manufacturing
industry.
In North America, while new construction investment expanded in 2000,
new housing starts of the private sector declined from 1999. As a result, demand
for construction equipment dropped for the second consecutive year. Komatsu
shortened production lead-time considerably, restructured its distributor
network and reinforced sales capability. However, North American sales decreased
from the previous year.
In Europe, while demand for construction equipment continued to grow,
Komatsu companies carried out aggressive marketing and promoted further
reorganization and reinforcement of their distributors. As a result, major
European units of the Company registered improved sales on a local currencies
basis. In response to the depreciated euro, Komatsu worked to secure earnings
through further reduction of costs by expanding local procurement of parts and
components and implementing rationalization measures, while expanding the
product range for local production.
In Southeast Asia, while demand for equipment began to recover,
centering on the mining and forestry industries, recovery of overall demand
remained delayed. As a result, sales of construction and mining equipment were
about the same level from the previous year. Meanwhile, Komatsu made steady
gains in sales in the infrastructure investment-driven Chinese market. In
February 2001, Komatsu established Komatsu (China) Ltd. in Shanghai as regional
headquarters to coordinate operations in China. With this regional headquarters,
Komatsu is now better positioned to more effectively utilize the functions of
its production, sales and service foundations built over the years and respond
to the Chinese market with great potential for growth.
Utility equipment business continued to expand sales from steady growth
in North American and European demand. Sales growth was supported by brisk sales
of backhoe loaders in North America where Komatsu launched full-scale sales of
backhoe loaders two years ago. Komatsu has begun construction of a new plant for
utility equipment in South Carolina, U.S.A. With an initial plan to launch
production in 2002, Komatsu is well prepared to accelerate sales in this
promising market.
Mining equipment business saw some signs of recovery in demand for
off-highway dump trucks against the backdrop of improved price for copper.
However, this stopped short of full recovery for demand, leaving the difficult
management environment in place.
In the area of parts business for construction and mining equipment,
Komatsu acquired Hensley Industries, Inc., a leading manufacturer of buckets,
teeth and adapters for construction and mining equipment, in December 2000. With
Hensley Industries in the Komatsu Group, Komatsu is positioned to expand a
line-up of parts and supply their competitive products mainly in the North
American market.
Electronics
-----------
Sales from the electronics business improved 30.3% over the previous fiscal
year, to (Yen)117.7 billion (US$934 million). Komatsu Electronic Metals Co.,
Ltd. experienced a dramatic increase in demand for 200mm silicon wafers in the
first half period of fiscal 2001 and falling demand in the second half period.
Under such an environment, the company worked to improve quality of and
technology development for 200mm silicon wafers in both Japan and Taiwan, while
undertaking aggressive sales in Japan and overseas. The company also facilitated
restructuring including reinforcement of the discrete wafer business and
expanded efforts to reduce total costs and expand sales in order to improve
profits. Formosa Komatsu Silicon Corporation, a joint-venture
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entity with a local partner, expanded its production facilities and accelerated
sales to major customers, thereby establishing its solid presence in the
Taiwanese market.
Advanced Silicon Materials LLC. expanded sales over the previous year
by focusing on sales of monosilane gas and monosilane gas-based, unique
polycrystalline silicon against the backdrop of market growth. However, the
company continued to face difficult conditions for earnings, including increased
amortization of the Butte Plant as accompanied by its full-scale production.
Meanwhile, Komatsu Electronics, Inc. made a significant gain in sales
over the previous fiscal year by taking advantage of expanded demand for micro
modules for use in fiber optic communication networks. To meet further growth in
demand more flexibly, the company expanded production capacity with new
facilities and reached an alliance agreement with Ferrotec Corporation, a
competitive manufacturer of thermoelectric modules. The agreement centers on the
production of micro modules by a Chinese subsidiary of Ferrotec.
In the Excimer laser business, Komatsu established GIGAPHOTON INC., a
50-50 joint venture with USHIO INC. in August 2000. The joint venture engages in
overall Excimer laser business, from research and development, production, and
sales to service. Against the backdrop of an improved market supported by
aggressive investment by semiconductor manufacturers, the company delivered the
number of units at a rate higher than market growth and accomplished larger
sales than initially planned.
Others
------
Sales of the industrial machinery, logistics and other businesses for fiscal
2001 increased 19.7% to (Yen)260.4 billion (US$2,067 million).
With respect to the large press business, Komatsu expanded sales for
the fiscal year with good sales of the WS-3TR series standard-type transfer
press for manufacturers of automotive body components and sales to overseas
automobile manufacturers for retrofitting their equipment. In the defense
equipment business where Komatsu integrated development and production for
improved efficiency, sales to Japan's Self Defense Agency remained strong. In
the environmental business, the Company delivered three full-scale comprehensive
recycling plants for construction wastes in Japan, developing a new business
domain.
Komatsu Forklift Co., Ltd., a consolidated subsidiary since this fiscal
year, introduced renewed models of the "LEO Plus" engine-powered and
battery-powered reach-type "AR" series. The company also promoted the "Proposal
for Total Logistics" campaign to customers in fiscal 2001. While market demand
increased in North America and Europe, the company expanded both sales and
market share in the United States where it had reinforced its sales network. As
a result, the company's sales and ordinary profits for the fiscal year improved
over the previous fiscal year. Also during the fiscal year, the company built a
cooperative global relationship with Linde AG of Germany in production and
sales. Under this arrangement, Komatsu Forklift began sales of Linde-made
forklift trucks in Japan and Linde's subsidiary launched production of Komatsu
Forklift-brand trucks in Europe.
Komatsu Industries Corporation, in charge of sheet metal forming
machinery and small and medium-sized presses, posted profits for fiscal 2001
according to the restructuring plan undertaken since 1999. Also during the
fiscal year, the company further reinforced the sales alliance with TRUMPF GmbH
+ Co. KG of Germany, expanded sales of TRUMPF-made products in Japan and
embarked on supply of its "PAS" series AC servomotor-driven press brake models
to TRUMPF by targeting U.S. and European markets.
3. Conditions of Consolidated Cash Flows
Net cash provided by operating activities for fiscal 2001 amounted to (Yen)69.9
billion (US$555 million), net cash used in investing activities to (Yen)35.1
billion (US$279 million), and net cash used in financing activities to (Yen)75.8
billion (US$602 million). As a result, cash and cash equivalents at the end of
fiscal 2001 totaled (Yen)39.7 billion (US$316 million), down (Yen)40.7 billion
(US$323 million) from the previous year.
4. Important Decisions Made or Important Facts during the Fiscal Year
Share Repurchase
----------------
In May 2000, Komatsu repurchased and retired 10 million par-value common shares
by appropriating (Yen)6,341 million of retained earnings in compliance with
"Article 3 of the Law Concerning Special Exceptions to the Commercial Code
Relating to the Procedures for Cancellation of Shares" of the Commercial Code of
Japan.
Komatsu Soft Shares Transferred to Toyo Information Systems
-----------------------------------------------------------
As part of its efforts to strengthen involvement in IT, the Company has decided
to establish a partnership relation with Toyo Information Systems Co., Ltd. in
the area of core systems. In April 2000, the Company transferred 65% of the
outstanding shares of Komatsu Soft Ltd. to Toyo Information Systems. As a
result,
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Komatsu Soft changed its status for the Company from a consolidated subsidiary
to a company accounted for by the equity method.
Komatsu Forklift Becomes Consolidated Subsidiary
------------------------------------------------
To strengthen the relationship with Komatsu Forklift Co., Ltd., Komatsu
converted Komatsu Forklift to a subsidiary in June 2000 by increasing its equity
holding in Komatsu Forklift to 50.8% through such means as underwriting part of
third-party allotment. In order to enhance competitiveness of the forklift truck
business, earlier in February 2000, Komatsu and Komatsu Forklift had signed a
basic agreement with Linde AG of Germany to establish a global cooperative
relationship in the manufacture and sales of forklift trucks and related
products. Now that Komatsu Forklift is its subsidiary, Komatsu is working to
accelerate business expansion of the forklift truck business as part of the
Komatsu Group. Komatsu is also working to reinforce the management base of
Komatsu Forklift and improve their earnings.
(Ref.: Komatsu held 51.5% equity in Komatsu Forklift as of March 31, 2001.)
Excimer Laser Joint Venture Established with USHIO
--------------------------------------------------
In August 2000, Komatsu and USHIO INC. jointly established GIGAPHOTON INC. to
engage in overall business of Excimer lasers used in lithography tools for
semiconductor manufacturing. GIGAPHOTON is strategically positioned to integrate
leading-edge technologies and superior production facilities owned by Komatsu
and an industrial reputation for high reliability as well as sales and service
networks built by USHIO. It is promoting integrated efficiency and speeding up
development through technological synergy. While working to enhance its global
competitiveness, GIGAPHOTON is aiming to launch new products sooner than
competitors in its pursuit of the top global market share of Excimer lasers.
GIGAPHOTON is accounted for by the equity method.
Komatsu Construction Shares Transferred to TAKAMATSU
----------------------------------------------------
In October 2000, Komatsu complied with a takeover bid by TAKAMATSU CORPORATION
and transferred its equity shares in Komatsu Construction Co., Ltd. to
TAKAMATSU. As a result, Komatsu Construction became a subsidiary of TAKAMATSU.
By introducing the management know-how of TAKAMATSU with its strong earning
power, Komatsu Construction should reinforce its management base through
enhanced efficiency, and improve business performance. As a result of the
transfer of shares, Komatsu is better positioned to concentrate its management
resources on the mainstay business of construction and mining equipment for
implementation of the growth strategy and other businesses in which the Company
can maintain a technological edge in order to increase the corporate value of
the Komatsu Group.
5. Outlook for Fiscal 2002
United States and European economies slowed down in the second half period of
fiscal 2001, and the Japanese economy remained slack throughout fiscal 2001. In
this light, there is a concern over sluggish economies prolonging worldwide in
fiscal 2002. Under such an environment, Komatsu is going to deliver technology
innovation-differentiated products and services to customers for their
diversified expectations. To accomplish the goals of the "G" to the 21/st/
mid-range management strategy, the Company is determined to win the mega
competition and ensure continued growth.
In the construction and mining equipment business, the Company is going
to secure earnings and new growth by undertaking regional and market-specific
activities based on globalized operations it had established in different parts
of the world. Transcending the boundaries of conventional business styles, the
Company is committed to delivering total solutions that customers look for by
deploying IT and expanding the environmental business.
In the electronics and other businesses, the Company is going to focus
its management resources on business areas where it can maintain a technological
edge on a global scale in order to foster their business growth and improve
profitability.
For fiscal 2002 ending March 31, 2002, under the "G" to the 21/st/
strategy, the Company projects consolidated net sales of (Yen)1,120.0 billion
and net income of (Yen)8.0 billion. Foreign exchange rates are premised at
(Yen)118 to US$1 and (Yen)108 to EUR1 for fiscal 2002.
6. Redistribution of Profits for Fiscal 2001 and 2002
In accordance with its basic policy on redistribution of profits,
Komatsu plans to set (Yen)3 cash dividends per share for fiscal year-end. The
Company already paid (Yen)3 for interim cash dividends per share. Cash dividends
of (Yen)6 per share are being planned for fiscal 2001. As a result, it is
projected that the payout ratio for fiscal 2001 will be 79.4%.
Similarly for fiscal 2002, the Company anticipates (Yen)3 each for
interim and fiscal year-end cash
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dividends per share ((Yen)6 for fiscal 2002), based on its policy on
redistribution of profits and projected business results.
-8-
Management Policy
Basic Management Policy
-----------------------
The cornerstone of Komatsu's management lies in its commitment to Quality and
Reliability in order to maximize the corporate value of the Company. This
commitment is not limited to delivering safe and innovative products and
services, which incorporate the viewpoints of customers. Komatsu is continuing
its efforts to enhance the Quality and Reliability of all organizations,
businesses, employees and management of the entire Komatsu Group. It is the top
management task of Komatsu to continue improving the Quality and Reliability of
these mentioned above.
Mid- and Long-Range Management Strategy and Issues Ahead
--------------------------------------------------------
Last year, Komatsu launched the "G" to the 21/st/ mid-range management strategy
for a period of three years, extending to fiscal year ending March 31, 2003, in
which we have defined the future directions of the Company.
The Company is determined to become a trusted partner for its customers
by delivering smart solutions to their problems by leveraging its integrated
strength and world-class technological expertise. The "G" to the 21/st/ strategy
specifies the following four strategies.
1) New growth strategy for the construction and mining equipment business,
2) Reduction of environmental stress and expansion of environmental business,
3) Focused attention to businesses in which Komatsu can maintain a technological
edge on a global scale, and 4) Attainment of competitive advantage by
deploying IT or e-KOMATSU.
While further facilitating its globalization, Komatsu will work to
expand sales and profits by incorporating new perspectives of dynamic progress
of IT and conservation of the natural environment and by emphasizing the new
strategy for the construction and mining equipment business.
With respect to environmental concerns, Komatsu has attained important
results from sincere efforts to reduce environmental impact in production.
Meanwhile, it should become a lucrative business opportunity for Komatsu when
the Company delivers solutions to the environmental problems of its customers
with its technologies and systems. By capitalizing on its previous achievements,
the Company is going to aggressively expand the environmental business in the
following three areas.
1) Environmentally harmonious products: Environment-related technology
development (such as exhaust emission control, reduction of noise and
vibration, engine systems for water-emulsion fuel) and remanufacturing
(recycling of parts and components),
2) Construction equipment designed for environmental conservation (on-site
recycling machinery such as mobile crusher/recycler series), and
3) Recycling plants for wastes.
Use of IT not only brings about a higher efficiency in business and
information sharing but also changes the way of doing business fundamentally.
Komatsu offers networking advantages of our organizations and talented people.
The Company demonstrates such advantages in research and development, marketing,
customer support, as well as creativity, action and speedy teamwork worldwide.
With its unique IT, the Company is well prepared to meet a diverse range of
expectations of customers.
Komatsu has celebrated its 80/th/ anniversary this year. Eighty years
ago, Meitaro Takeuchi, Founder of Komatsu, identified the issues for the Company
as "innovation of industrial technologies," the development of human resources
to support the technology innovation, and an "advance into the international
business arena." This founding spirit has been passed down to all Komatsu
employees around the world in the form of DNA, driving the Company toward growth
in this age of technology innovation and globalization. Komatsu will continue to
bank upon these DNA and carry out self-initiated innovation of management and
technologies to enrich its growth and prosperity.
Management Goals
----------------
Under the "G" to the 21/st/ mid-range management strategy, Komatsu has the
following figures as management goals for the fiscal year ending March 31, 2003.
In addition to net sales and income, the Company is going to emphasize
redistribution of profits to its shareholders by working to build a sound and
stable financial position. To this end, the Company has also set specific goals
for ROE, ROA and free cash flows.
The "G" to the 21/st/ is positioned as a point of transit for the
Company to accomplish the goals of 10% for ROE and 8% for ROA as a must in the
future. The Company is going to allocate its management resources to its core
business of construction and mining equipment by translating the new growth
strategy into action as well as other businesses where it can maintain its
technological edge on a global scale. In this way, the
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Company is determined to produce results.
Goals of the "G" to the 21/st/ (Consolidated Basis)
------------------------------------------------------------
2003
Year ending March 31
------------------------------------------------------------
Sales (Yen)1,180 billion
------------------------------------------------------------
Operating income (Yen)84 billion
------------------------------------------------------------
Net income (Yen)34 billion
------------------------------------------------------------
Free cash flows (Yen)37 billion
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ROE 6.5%
------------------------------------------------------------
ROA 6.0%
------------------------------------------------------------
Notes: ROE = Net income / Shareholders' equity
ROA = Income before income taxes / Total assets
Basic Policy for Dividends
--------------------------
Komatsu works to build a sound and stable financial position and flexible and
agile corporate strength. Concerning cash dividends to shareholders, the Company
maintains the basic policy of redistributing profits by taking payout ratios
into account and linking with business results, as it secures sufficient
internal reserves for reinvestment.
------------------------------------------------------------------------
Cautionary Statement
The announcement set forth herein contains forward-looking statements
which reflect management's current views with respect to certain
future events, including expected financial position, operating
results, and business strategies. These statements can be identified
by the use of terms such as "will," "believes," "should," "projects"
and similar terms and expressions that identify future events or
expectations. Actual results may differ materially from those
projected, and the events and results of such forward-looking
assumptions cannot be assured.
Factors that may cause actual results to differ materially from
those predicted by such forward-looking statements include, but are
not limited to, unanticipated changes in demand for the Company's
principal products, owing to changes in the economic conditions in the
Company's principal markets; changes in exchange rates or the impact
of increased competition; unanticipated cost or delays encountered in
achieving the Company's objectives with respect to globalized product
sourcing and new Information Technology tools; uncertainties as to the
results of the Company's research and development efforts and its
ability to access and protect certain intellectual property rights;
and, the impact of regulatory changes and accounting principles and
practices.
------------------------------------------------------------------------
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Consolidated Financial Highlights
(For fiscal years ended March 31, 2001 and 2000)
Millions of yen & US dollars
except per share amounts
--------------------------------------------------------------------------------------------------------------------
Changes(2001-2000)
2001 2000 Increase(Decrease)
----------------------------------------------------------------------------------------------
Yen Dollar Yen Yen (%)
--------------------------------------------------------------------------------------------------------------------
Net sales 1,096,369 8,701 1,055,654 40,715 3.9
Japan 586,865 4,658 553,822 33,043 6.0
Overseas 509,504 4,043 501,832 7,672 1.5
--------------------------------------------------------------------------------------------------------------------
Income before 20,064 159 19,395 669 3.4
Income taxes
--------------------------------------------------------------------------------------------------------------------
Net income 6,913 55 13,395 (6,482) (48.4)
--------------------------------------------------------------------------------------------------------------------
Net income
per share
Basic (Yen) 7.24 (cents) 5.75 (Yen) 13.85 (Yen) (6.61) -
Diluted --- --- (Yen) 13.76 --- -
--------------------------------------------------------------------------------------------------------------------
Notes:
1) . Number of consolidated subsidiaries : 128 companies
. Number of affiliated companies : 174 companies (including a
parent company and 45 companies accounted for by the equity
method)
2) The translation of Japanese yen amounts into US dollar amounts is
included solely for convenience and has been made for fiscal 2001
at the rate of (Yen)126 to $1, the approximate rate of exchange at
March 31, 2001.
3) The diluted net income per share computations for fiscal 2001 were
not disclosed because of anti-dilutive effect.
Financial Position
(As of March 31, 2001 and 2000)
-------------------------------------------------------------------------------------------------------------
2001 2000
-------------------------------------------------------------------------------------------------------------
Total assets (Millions of yen) 1,403,195 1,375,280
-------------------------------------------------------------------------------------------------------------
Shareholders' equity (Millions of yen) 474,257 490,454
-------------------------------------------------------------------------------------------------------------
Equity ratio (%) 33.8 35.7
-------------------------------------------------------------------------------------------------------------
Shareholders' equity per share (Yen) 497.12 507.26
-------------------------------------------------------------------------------------------------------------
Projections for FY2002
(From April 1, 2001 to March 31, 2002)
Millions of yen
-------------------------------------------------------------------------------------------------------------
Net sales Income before income taxes Net income
-------------------------------------------------------------------------------------------------------------
The first half of FY2002 550,000 8,000 3,500
-------------------------------------------------------------------------------------------------------------
The entire FY2002 1,120,000 21,000 8,000
-------------------------------------------------------------------------------------------------------------
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Consolidated Balance Sheets
(As of March 31, 2001 and 2000)
Millions of yen
------------------------------------------------------------------
2001 2000 Changes
Increase(Decrease)
-------------------------------------------------------------------------------------------------------------------------
(A) (B) (A)-(B)
Assets
Current assets:
Cash and cash equivalents (Yen) 39,760 (Yen) 80,476 (Yen) (40,716)
Time deposits 1,110 915 195
Trade notes and accounts receivable 394,658 368,452 26,206
Inventories 255,801 209,089 46,712
Other current assets 94,799 93,347 1,452
-------------------------------------------------------------------------------------------------------------------------
Total current assets 786,128 752,279 33,849
-------------------------------------------------------------------------------------------------------------------------
Investments 95,179 150,982 (55,803)
-------------------------------------------------------------------------------------------------------------------------
Property, plant, and equipment -
Less accumulated depreciation 438,795 397,534 41,261
-------------------------------------------------------------------------------------------------------------------------
Other assets 83,093 74,485 8,608
-------------------------------------------------------------------------------------------------------------------------
Total 1,403,195 1,375,280 27,915
-------------------------------------------------------------------------------------------------------------------------
Liabilities and Shareholders' Equity
Current liabilities:
Short-term debt (including current 230,137 214,970 15,167
Maturities of long-term debt)
Trade notes and accounts payable 209,526 184,624 24,902
Income taxes payable 11,598 12,792 (1,194)
Other current liabilities 131,634 118,376 13,258
-------------------------------------------------------------------------------------------------------------------------
Total current liabilities 582,895 530,762 52,133
-------------------------------------------------------------------------------------------------------------------------
Long-term liabilities 296,776 324,195 (27,419)
-------------------------------------------------------------------------------------------------------------------------
Minority interests 49,267 29,869 19,398
-------------------------------------------------------------------------------------------------------------------------
Shareholders' equity:
Common stock 67,870 68,370 (500)
Capital surplus 117,418 117,366 52
Retained earnings 321,217 325,914 (4,697)
Accumulated other (29,204) (19,590) (9,614)
Comprehensive income (*)
Treasury stock (3,044) (1,606) (1,438)
-------------------------------------------------------------------------------------------------------------------------
Total shareholders' equity - net 474,257 490,454 (16,197)
=========================================================================================================================
Total (Yen) 1,403,195 (Yen) 1,375,280 (Yen) 27,915
=========================================================================================================================
------------------------------------------------------------------
2001 2000 Changes
Increase(Decrease)
-------------------------------------------------------------------------------------------------------------------------
(*)Accumulated other comprehensive income:
Foreign currency translation adjustments (Yen) (29,340) (Yen) (39,724) (Yen) 10,384
Net unrealized holding gains on securities available 7,249 23,467 (16,218)
for sale
Pension liability adjustments (Yen) (7,113) (Yen) (3,333) (Yen) (3,780)
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Consolidated Statements of Income
(For the fiscal years ended March 31, 2001 and 2000)
Millions of yen
---------------------------------------------------------------------
2001 2000 Changes
Increase(Decrease)
----------------------------------------------------------------------------------------------------------------------------
(A) (B) (A)-(B) %
Revenues
Net sales (Yen) 1,096,369 (Yen) 1,055,654 (Yen) 40,715 3.9
Interest and other income 30,718 55,857 (25,139)
----------------------------------------------------------------------------------------------------------------------------
Total 1,127,087 1,111,511 15,576 1.4
----------------------------------------------------------------------------------------------------------------------------
Costs and expenses
Cost of sales 804,700 796,820 7,880
Selling, general and administrative expenses 263,854 241,516 22,338
Interest expense 22,194 24,392 (2,198)
Other expense 16,275 29,388 (13,113)
----------------------------------------------------------------------------------------------------------------------------
Total 1,107,023 1,092,116 14,907 1.4
----------------------------------------------------------------------------------------------------------------------------
Income before income taxes, minority interests, and 20,064 19,395 669 3.4
equity in earnings
----------------------------------------------------------------------------------------------------------------------------
Income taxes 13,715 9,950 3,765
----------------------------------------------------------------------------------------------------------------------------
Minority interests in income (losses) of consolidated 179 (88) 267
subsidiaries - net
----------------------------------------------------------------------------------------------------------------------------
Equity in earnings of affiliated companies - net 385 4,038 (3,653)
============================================================================================================================
Net income (Yen) 6,913 (Yen) 13,395 (Yen) (6,482) (48.4)
============================================================================================================================
Note: Komatsu's comprehensive income (loss) consists of net income, change in
foreign currency translation adjustments, change in net unrealized
holding gains on securities available for sale, and change in pension
liability adjustments. Comprehensive income (loss) for the years ended
March 31, 2001 and 2000 were (2,701) million yen and 1,241 million yen,
respectively.
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Consolidated Statements of Cash Flows
(For fiscal years ended March 31, 2001 and 2000)
Millions of yen
--------------------------------------------------------------------------------------------------------------------
2001 2000
--------------------------------------------------------------------------------------------------------------------
Net cash provided by operating activities (Yen) 69,976 (Yen) 34,224
--------------------------------------------------------------------------------------------------------------------
Net cash provided by (used in) investing activities (35,142) 18,880
--------------------------------------------------------------------------------------------------------------------
Net cash used in financial activities (75,863) (61,565)
--------------------------------------------------------------------------------------------------------------------
Effect of exchange rate change on cash and cash
equivalents 313 1,636
--------------------------------------------------------------------------------------------------------------------
Net decrease in cash and cash equivalents (40,716) (6,825)
--------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents, beginning of year 80,476 87,301
--------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents, end of year (Yen) 39,760 (Yen) 80,476
--------------------------------------------------------------------------------------------------------------------
-14-
Business Information
1. Information by Business Unit
(1) Sales and Operating Profit (Loss)
(For fiscal years ended March 31, 2001 and 2000)
Millions of yen
------------------------------------------------------------------------------------------------------------------------
2001 2000
---------------------------------------------------------------------------------------------
Operating Margin Operating Margin
Sales Profit(Loss) % Sales Profit(Loss) %
------------------------------------------------------------------------------------------------------------------------
Construction &
Mining Equipment 725,547 22,203 3.1 760,132 28,489 3.7
------------------------------------------------------------------------------------------------------------------------
Electronics 118,237 2,887 2.4 90,415 (9,839) (10.9)
For reference purpose
only:
Komatsu Electronics
Metals (Note 2) 78,525 5,813 7.4 63,862 (3,331) (5.2)
------------------------------------------------------------------------------------------------------------------------
Others 309,698 6,450 2.1 277,654 1,171 0.4
For reference purpose
only:
Komatsu Forklift (Note 3) 104,649 1,894 1.8 --- --- ---
Industrial machinery
Segment (Note 3) 38,260 245 0.6 33,785 (1,719) (5.1)
------------------------------------------------------------------------------------------------------------------------
Subtotal 1,153,482 31,540 2.7 1,128,201 19,821 1.8
------------------------------------------------------------------------------------------------------------------------
Corporate &
Elimination (57,113) (3,725) --- (72,547) (2,503) ---
------------------------------------------------------------------------------------------------------------------------
Total 1,096,369 27,815 2.5 1,055,654 17,318 1.6
------------------------------------------------------------------------------------------------------------------------
Notes: 1) Sales amount of each business unit includes inter-unit transactions.
2) Public information of an electronic segment company, Komatsu
Electronic Metals Co., Ltd., is disclosed based on Japanese standard
for consolidation purpose. These public information are disclosed
solely for convenience and do not include elimination within the
same business unit segment.
3) Public information of Komatsu Forklift Co., Ltd., a company that
belongs to others segment, is disclosed based on Japanese standard
for consolidation purpose. These public information are disclosed
solely for convenience and do not include elimination within the
same business unit segment. Also, information concerning industrial
segment is disclosed as part of others.
-15-
(2) Assets, Depreciation, and Capital Expenditures
Millions of yen
-------------------------------------------------------------------------------------------------------------------------
2001 2000
----------------------------------------------------------------------------------------------
As of Mar. For the fiscal year ended As of Mar. For the fiscal year ended
31, 2001 Mar. 31, 2001 31, 2000 Mar. 31, 2000
-------------------------------------------------------------------------------------------------------------------------
Assets Depreciation Capital Assets Depreciation Capital
and Expenditures and Expenditures
Amortization Amortization
-------------------------------------------------------------------------------------------------------------------------
Construction &
Mining Equipment 868,611 32,317 47,380 672,031 32,166 37,989
-------------------------------------------------------------------------------------------------------------------------
Electronics 240,592 20,210 16,476 231,317 20,860 13,089
-------------------------------------------------------------------------------------------------------------------------
Others 254,960 11,388 15,454 231,989 8,474 6,650
-------------------------------------------------------------------------------------------------------------------------
Subtotal 1,364,163 63,915 79,310 1,135,337 61,500 57,728
-------------------------------------------------------------------------------------------------------------------------
Corporate &
Elimination 39,032 --- --- 239,943 --- ---
-------------------------------------------------------------------------------------------------------------------------
Total 1,403,195 63,915 79,310 1,375,280 61,500 57,728
-------------------------------------------------------------------------------------------------------------------------
Note: In fiscal 2001 and 2000, the Company recorded impairment losses on
assets in the electronics segment.
-16-
2. Geographic Information
(1) Net Sales Recognized By Sales Destination
(For fiscal years ended March 31, 2001 and 2000)
Millions of yen
---------------------------------------------------------------------------
2001 2000
---------------------------------------------------------------------------
Japan 586,865 553,822
---------------------------------------------------------------------------
Americas 241,091 242,609
---------------------------------------------------------------------------
Europe 126,479 123,633
---------------------------------------------------------------------------
Asia (excluding Japan) 117,136 99,558
And Oceania
---------------------------------------------------------------------------
Middle East and Africa 24,798 36,032
---------------------------------------------------------------------------
Consolidated net sales 1,096,369 1,055,654
---------------------------------------------------------------------------
(2) Net Sales Recognized By Geographic Origin and Long-lived Assets
Millions of yen
----------------------------------------------------------------------------------------------------------------------
2001 2000
------------------------------------------------------------------------------------------------------
As of Mar. 31, For the fiscal year ended As of Mar. 31, For the fiscal year ended
2001 Mar. 31, 2001 2000 Mar. 31, 2000
------------------------------------------------------------------------------------------------------
Net Sales Long-lived Assets Net Sales Long-lived Assets
----------------------------------------------------------------------------------------------------------------------
Japan 662,025 320,194 615,580 277,693
----------------------------------------------------------------------------------------------------------------------
U.S.A 241,745 139,132 245,002 134,991
----------------------------------------------------------------------------------------------------------------------
Europe 112,257 9,664 114,742 9,032
----------------------------------------------------------------------------------------------------------------------
Others 80,342 32,670 80,330 26,087
----------------------------------------------------------------------------------------------------------------------
Total 1,096,369 501,660 1,055,654 447,803
----------------------------------------------------------------------------------------------------------------------
-17-
3. Information by Region
(1) Sales and Operating Profit (Loss)
(For fiscal years ended March 31, 2001 and 2000)
Millions of yen
---------------------------------------------------------------------------------------------------------------
2001 2000
-----------------------------------------------------------------------------------------
Sales Operating Margin Operating Margin
Profit(Loss) % Sales Profit %
---------------------------------------------------------------------------------------------------------------
Japan 804,670 29,253 3.6 759,149 955 0.1
---------------------------------------------------------------------------------------------------------------
Americas 252,376 (2,302) (0.9) 253,991 12,354 4.9
---------------------------------------------------------------------------------------------------------------
Europe 125,808 5,945 4.7 129,407 4,284 3.3
---------------------------------------------------------------------------------------------------------------
Others 83,557 364 0.4 84,715 2,202 2.6
---------------------------------------------------------------------------------------------------------------
Subtotal 1,266,411 33,260 2.6 1,227,262 19,795 1.6
---------------------------------------------------------------------------------------------------------------
Corporate &
Eliminations (170,042) (5,445) --- (171,608) (2,477) ---
---------------------------------------------------------------------------------------------------------------
Total 1,096,369 27,815 2.5 1,055,654 17,318 1.6
---------------------------------------------------------------------------------------------------------------
Note: Sales amount of each region segment includes inter-segment transactions.
(2) Assets
(As of March 31, 2001 and 2000)
Millions of yen
-------------------------------------------------------------------------------------------------
2001 2000
---------------------------------------------------------------------------
Assets Ratio(%) Assets Ratio(%)
-------------------------------------------------------------------------------------------------
Japan 1,030,872 73.5 941,282 68.4
-------------------------------------------------------------------------------------------------
Americas 343,967 24.5 289,123 21.0
-------------------------------------------------------------------------------------------------
Europe 83,389 5.9 73,560 5.4
-------------------------------------------------------------------------------------------------
Others 98,057 7.0 83,760 6.1
-------------------------------------------------------------------------------------------------
Subtotal 1,556,285 110.9 1,387,725 100.9
-------------------------------------------------------------------------------------------------
Corporate &
Eliminations (153,090) (10.9) (12,445) (0.9)
-------------------------------------------------------------------------------------------------
Total 1,403,195 100.0 1,375,280 100.0
-------------------------------------------------------------------------------------------------
-18-
4. Overseas Sales
(1) Fiscal year ended March 31, 2001
Millions of yen
-----------------------------------------------------------------------------------------------------
Americas Europe Others Total
-----------------------------------------------------------------------------------------------------
Overseas sales 241,091 126,479 141,934 509,504
-----------------------------------------------------------------------------------------------------
Consolidated net sales --- --- --- 1,096,369
-----------------------------------------------------------------------------------------------------
Ratio of overseas sales to 22.0% 11.5% 12.9% 46.5%
consolidated net sales
-----------------------------------------------------------------------------------------------------
(2) Fiscal year ended March 31, 2000
Millions of yen
-----------------------------------------------------------------------------------------------------
Americas Europe Others Total
-----------------------------------------------------------------------------------------------------
Overseas sales 242,609 123,633 135,590 501,832
-----------------------------------------------------------------------------------------------------
Consolidated net sales --- --- --- 1,055,654
-----------------------------------------------------------------------------------------------------
Ratio of overseas sales to 23.0% 11.7% 12.8% 47.5%
consolidated net sales
-----------------------------------------------------------------------------------------------------
Note: Overseas sales represent the sales of the Company and its consolidated
subsidiaries to areas other than Japan.
-19-
Consolidated Sales by Operation
(For fiscal years ended March 31, 2001 and 2000)
----------------------------------------------------------------------------------------------------------------------
2001 2000 Changes
Increase (Decrease)
-----------------------------------------------------------------------------------
(Yen) Million Ratio(%) (Yen) Million Ratio(%) (Yen) Million (%)
----------------------------------------------------------------------------------------------------------------------
Construction Japan 305,593 27.9 291,804 27.6 13,789 4.7
------------------------------------------------------------------------------------------------
& Mining Overseas 412,554 37.6 455,843 43.2 (43,289) (9.5)
------------------------------------------------------------------------------------------------
Equipment 718,147 65.5 747,647 70.8 (29,500) (3.9)
----------------------------------------------------------------------------------------------------------------------
Electronics Japan 74,455 6.8 62,530 5.9 11,925 19.1
------------------------------------------------------------------------------------------------
Overseas 43,290 3.9 27,805 2.6 15,485 55.7
------------------------------------------------------------------------------------------------
117,745 10.7 90,335 8.6 27,410 30.3
----------------------------------------------------------------------------------------------------------------------
Others Japan 206,817 18.8 199,488 18.9 7,329 3.7
------------------------------------------------------------------------------------------------
Overseas 53,660 5.0 18,184 1.7 35,476 195.1
------------------------------------------------------------------------------------------------
260,477 23.8 217,672 20.6 42,805 19.7
----------------------------------------------------------------------------------------------------------------------
Total Japan 586,865 53.5 553,822 52.5 33,043 6.0
------------------------------------------------------------------------------------------------
Overseas 509,504 46.5 501,832 47.5 7,672 1.5
------------------------------------------------------------------------------------------------
1,096,369 100.0 1,055,654 100.0 40,715 3.9
----------------------------------------------------------------------------------------------------------------------
-20-
Financial Instruments
(As of March 31, 2001 and 2000)
1. Derivative Financial Instruments
Millions of Yen
----------------------------------------------------------------------------------------------------------------------------
2001 2000
--------------------------------------------------------------------------
Contract, Carrying Estimated Contract, Carrying Estimated
Notional Amounts Fair Value Notional Amounts Fair Value
Amounts Amounts
----------------------------------------------------------------------------------------------------------------------------
Foreign exchange contracts and
option contacts 7,941 25 (367) 9,559 96 133
FY 2000
Purchase of foreign currencies
the equivalent of yen 19,196
Sale of foreign currencies
the equivalent of yen 28,755
FY 2001
Purchase of foreign currencies
the equivalent of yen 28,528
Sale of foreign currencies
the equivalent of yen 33,074
Option contracts (Purchased)
the equivalent of yen 3,395
Interest rate swap, currency swap and
Interest rate cap agreements 295,448 (738) (564) 250,615 45 14,704
----------------------------------------------------------------------------------------------------------------------------
2. Marketable Securities
Millions of yen
---------------------------------------------------------------------------------------------------------------------
2001 2000
---------------------------------------------------------------------------------------------------------------------
Investment Securities available for sale
Marketable equity securities
Cost 39,876 61,239
Fair value 54,574 105,393
Gross unrealized holding gains 14,698 44,154
Marketable debt securities
Cost 965 110
Fair value 965 118
Gross unrealized holding gains 0 8
---------------------------------------------------------------------------------------------------------------------
-21-
Financial Highlights of the Parent Company
The following financial information is prepared based on the non-consolidated
financial results of the parent company in accordance with generally accepted
accounting principles and practices in Japan.
(For fiscal years ended March 31, 2001 and 2000) Millions of yen & US dollars
except per share amounts
--------------------------------------------------------------------------------------------------------------------
2001 2000 Changes(2001-2000)
Increase(Decrease)
-----------------------------------------------------------------------------------------------
Yen Dollar Yen Yen (%)
--------------------------------------------------------------------------------------------------------------------
Net sales 430,270 3,414 441,423 (11,153) (2.5)
Domestic 283,148 2,247 281,029 2,118 0.8
Overseas 147,122 1,167 160,393 (13,271) (8.3)
--------------------------------------------------------------------------------------------------------------------
Operating income 14,181 112 12,912 1,269 9.8
--------------------------------------------------------------------------------------------------------------------
Ordinary income 11,281 89 9,936 1,345 13.5
--------------------------------------------------------------------------------------------------------------------
Net income 7,222 57 13,612 (6,390) (46.9)
--------------------------------------------------------------------------------------------------------------------
Earnings per
Share
Basic (Yen) 7.52 (cent) 5.97 (Yen) 14.05 (Yen)( 6.53) ---
Diluted --- --- (Yen) 13.95 --- ---
--------------------------------------------------------------------------------------------------------------------
Notes: 1) The translation of Japanese yen amounts into United States dollar
amounts is included solely for convenience and has been made for
2001 at the rate of(Yen)126 to $1, the approximate rate of
exchange at March 31, 2001.
2) The average numbers of shares for fiscal 2001 and 2000 are as
follows:
Fiscal 2001: 960,181,975
Fiscal 2000: 968,921,701
3) The diluted earnings per share computations for fiscal 2001 were
not dilutive.
Dividends
(For fiscal years ended March 31, 2001 and 2000)
----------------------------------------------------------------------------------------------------
2001 2000
----------------------------------------------------------------------------------------------------
Cash dividends per share (yen)
per annum 6.00 6.00
----------------------------------------------------------------------------------------------------
Financial Position
(As of March 31, 2001 and 2000)
----------------------------------------------------------------------------------------------------
2001 2000
----------------------------------------------------------------------------------------------------
Total assets ((Yen) million) 765,446 746,871
----------------------------------------------------------------------------------------------------
Shareholders' equity ((Yen) million) 473,794 469,167
----------------------------------------------------------------------------------------------------
Equity ratio (%) 61.9 62.8
----------------------------------------------------------------------------------------------------
Shareholders' equity per share (Yen) 494.09 484.22
----------------------------------------------------------------------------------------------------
Note: The numbers of shares issued and outstanding as of the end of fiscal
2001 and 2000 are as follows:
Fiscal 2001: 958,921,701
Fiscal 2000: 968,921,701
-22-
Sales by Operation
(For fiscal years ended March 31, 2001 and 2000)
Increase (Decrease)
--------------------------------------------------------------------------------------------------------------------
Changes
2001 2000 (2001-2000)
---------------------------------------------------------------------------------
(Yen) million Ratio(%) (Yen) million Ratio(%) (Yen) million (%)
--------------------------------------------------------------------------------------------------------------------
Construction Domestic 221,757 51.5 221,538 50.2 219 0.1
------------------------------------------------------------------------------------------------
& Mining Overseas 139,177 32.3 153,853 34.9 (14,676) (9.5)
------------------------------------------------------------------------------------------------
Equipment 360,935 83.9 375,392 85.0 (14,457) (3.9)
--------------------------------------------------------------------------------------------------------------------
Electronics Domestic 8,484 2.0 11,195 2.5 (2,710) (24.2)
------------------------------------------------------------------------------------------------
Overseas 58 0.0 --- --- 58 ---
------------------------------------------------------------------------------------------------
8,542 2.0 11,195 2.5 (2,652) (23.7)
--------------------------------------------------------------------------------------------------------------------
Others Domestic 52,906 12.3 48,296 10.9 4,610 9.5
------------------------------------------------------------------------------------------------
Overseas 7,886 1.8 6,540 1.5 1,346 20.6
------------------------------------------------------------------------------------------------
60,792 14.1 54,836 12.4 5,956 10.9
--------------------------------------------------------------------------------------------------------------------
Total Domestic 283,148 65.8 281,029 63.7 2,118 0.8
------------------------------------------------------------------------------------------------
Overseas 147,122 34.2 160,393 36.3 (13,271) (8.3)
------------------------------------------------------------------------------------------------
430,270 100.0 441,423 100.0 (11,153) (2.5)
--------------------------------------------------------------------------------------------------------------------
Projection for FY2002
(From April 1, 2001 to March 31, 2002)
Millions of yen
--------------------------------------------------------------------------------------------------------------------
Net Sales Ordinary Income Net Income
--------------------------------------------------------------------------------------------------------------------
The first half of FY2002 200,000 6,000 4,000
--------------------------------------------------------------------------------------------------------------------
The entire FY2002 430,000 14,000 8,000
--------------------------------------------------------------------------------------------------------------------
-23-
NEWS RELEASE
Komatsu Ltd.
2-3-6 Akasaka, Minato-ku,
Tokyo 107-8414, Japan
Public Relations Section
Tel: +81-3-5561-2616
May 7/th/, 2001
URL: http://www.komatsu.com/
ANNOUNCEMENT OF CHANGE OF TOP MANAGEMENT
----------------------------------------
Please be advised that Komatsu's Board of Directors has resolved the change of
its representative directors as follows:
1) The newly appointed are:
-----------------------------------------------------------------------------------------------------------
Name New Post Present Post
-----------------------------------------------------------------------------------------------------------
Satoru Anzaki Chairman of the Board President
-----------------------------------------------------------------------------------------------------------
Masahiro Sakane President Executive Vice President
-----------------------------------------------------------------------------------------------------------
* According to this change, Tetsuya Katada, present Chairman of the Board,
will assume the position of Counselor.
2) Curriculum Vitae
Title: Chairman of the Board
Name: Satoru Anzaki
-------------------
Date of Birth: March 3rd, 1937
Education: Graduated from Hitotsubashi
Faculty of Sociology in 1959
Faculty of Economics in 1961
----------------------------
Business Career: June 2001 Chairman of the Board
June 1995 - June 2001 President
June 1991 - June 1995 Executive Managing Director
November 1988 - June 1991 Managing Director
March 1985 - November 1988 Director
April 1961 Joined Komatsu Ltd.
Title: President
Name: Masahiro Sakane
Date of Birth: January 7/th/, 1941
Education: Graduated from Osaka City University
Faculty of Engineering in 1963
Business Career: June 2001 President
June 1999 - June 2001 Executive Vice President
June 1997 - June 1999 Executive Managing Director
June 1994 - June 1997 Managing Director
November 1990 -June 1994 COO of Komatsu Dresser Company
(Currently, Komatsu America International Company)
June 1989 - October 1990 Director
April 1963 Joined Komatsu Ltd.
3) Appointment Date
On June 27/th/, 2001, after the annual shareholders' meeting.
-24-
NEWS RELEASE
Komatsu Ltd.
2-3-6 Akasaka, Minato-ku,
Tokyo 107-8414, Japan
Public Relations Section
Tel: +81-3-5561-2616
0013(1690)
May 7, 2001
URL: http://www.komatsu.com/
Stock Option Scheme and Acquisition of Own Shares
-------------------------------------------------
Komatsu Ltd. presents the following notification of the decision made at its
Board of Directors meeting held on May 7, 2001, to propose a stock options
scheme and to acquire its own shares in order to carry out the stock options
scheme. The implementation of this decision by the Board of Directors is
conditional on approval of the proposal at the 132nd regular general meeting of
the shareholders to be held on Wednesday, June 27, 2001.
Comments
1. Description of the Share Acquisition
---------------------------------------
(1) Type of shares to be acquired: par value common shares
(2) Total number of shares to be acquired: 1.1 million shares
(3) Total value of the share acquisition
price ceiling: 1.0 billion yen
2. Outline of the Transfer
--------------------------
(1) Subjects of the Transfer
The subjects of the transfer shall include all current members of the
Board of Directors as of the 132nd general meeting (7 persons), 18 of
Executive Officers, 1 of Global Financial Officer and 6 of Global
Officers as of the 132nd general meeting, and those employees who hold a
rank equivalent to director (15 persons), based on the Company's
compensation system, and who are in office as of the 132nd general
meeting.
(2) Number of Shares to be Transferred
A total of 410 thousand shares to the above-mentioned 7 directors and a
total of 690 thousand shares to the above-mentioned 40 officers and
employees, amounting to a combined total of 1.1 million shares, shall be
transferred. A breakdown of the number of shares to be transferred is
given on the attachment.
(3) Value of Shares to be Transferred
The value of the shares to be transferred shall be the average closing
value, multiplied by 1.05, of the Company's par value common shares
averaged over every business day of the month on the Tokyo Stock Exchange
(with the exception of days on which the Stock Exchange was closed) prior
to the month in which the grant of right was made (figures under one yen
shall be counted as one yen). However, the closing value on the date of
the grant of right may not be lower than the above average.
If the Company issues new shares at a price that is lower than the stock
split or the market price (excluding cases in which the right exercised
involves the conversion of a convertible bond or a subscription right),
the transfer price shall be adjusted according to the following formula
(figures under one yen shall be counted as one yen).
-25-
No. of new shares issued x amount paid per share
No. of existing shares + ------------------------------------------------------
Price prior to stock split or issuance of new shares
Transfer price
after adjustment = transfer price prior adjustment x ---------------------------------------------------
No. of existing shares + increased no. of shares
due to stock spilt or issuance of new shares
(4) Method of Transfer
The "Contract Granting the Right to Demand the Transfer of Shares of the
Company's Stock Valued at a Certain Amount to be Set" (hereinafter the
"Grant Contract") shall be in accordance with the provisions stipulated in
sub-paragraph 3, paragraph 2, section 2 of Article 210 of the Commercial
Code of Japan. The Grant Contract shall be concluded between the Company
and the Subjects of the Transfer, in accordance with the previously
mentioned decisions of the general meeting of the shareholders and
decisions to be made in the future by the Board of Directors.
(5) Term of Exercise of Right
The term of exercise of right shall be from August 1, 2002, to July 31, 2007.
In cases in which the grantee of the right dies prior to the end of the term
of the exercise of the right, the right of exercise shall pass to the
successor (heir) of the decedent; however, the right may only be exercised
within a period not longer than 24 months from the date of death of the
decedent, notwithstanding the previous provisions.
(6) Conditions on the Right of Exercise
1) The grantee of the right may exercise this right according to the
provisions of the Grant Contract even after the grantee loses his/her
position as a director of the Company, an officer, or an employee. In
cases in which the grantee of the right dies, the successor of the grantee
may exercise this right according to the provisions of the Grant Contract.
2) It will be impermissible to transfer or pledge the right granted.
3) Any other conditions governing the exercise of rights shall be in
accordance with the provisions of the Grant Contract.
3. Reasons for Transfer
-----------------------
To further raise the enthusiasm and morale of the Company's directors,
officers and employees, thereby improving its business results.
4. Others
---------
If it is not possible for the Company to acquire "the total number of
shares to be acquired" at the "total value of the share acquisition price,"
then the Company shall be empowered, at the decision of the Board of
Directors, to reduce "the total number of shares to be acquired" and the
"number of shares to be transferred."
(end)
-26-
Attachment
Individuals Eligible for Stock Options & the Number of Shares to be
Transferred
1. Members of the Board of Directors in office at the time of the 132nd General
Shareholders' Meeting (7 persons)
Satoru Anzaki 80,000 shares Kazuhiro Aoyagi 60,000 shares
Masahiro Sakane 80,000 shares Kunio Noji 40,000 shares
Toshitaka Hagiwara 70,000 shares Tetsuya Katada 20,000 shares
Koji Ogaki 60,000 shares
2. Executive Officers, Global Financial Officer, Global Officers, and employees
at the rank of director-equivalent according to the Company's compensation
system, at the time of the 132nd General Shareholders' Meeting (40 persons)
Naomi Anesaki 60,000 shares Masatsugu Nagatomo 10,000 shares
Kunihiko Komiyama 40,000 shares Tetsuya Nakayama 10,000 shares
Hisashi Wada 40,000 shares Takeyuki Sakata 10,000 shares
Teruo Nakahara 40,000 shares Masayuki Satou 10,000 shares
Shuji Sugi 20,000 shares Yasuo Suzuki 10,000 shares
Susumu Isoda 20,000 shares Yuzo Suzuki 10,000 shares
Teruo Nagayasu 20,000 shares Tashiro Takeda 10,000 shares
Kanetake Nakatani 20,000 shares Tetsuo Takiguchi 10,000 shares
Yuzo Tsumura 20,000 shares Kanenobu Yoshida 10,000 shares
Masahiro Yoneyama 20,000 shares
Shigeki Fujimori 20,000 shares
Munenori Nakao 20,000 shares
Yuji Watanabe 20,000 shares
Kenji Kinoshita 20,000 shares
Makoto Nakamura 20,000 shares
Hiroshi Suzuki 20,000 shares
Mamoru Hironaka 20,000 shares
Masao Fuchigami 20,000 shares
Keith Sheldon 20,000 shares
Junro Kawanabe 10,000 shares
Yoshinori Komamura 10,000 shares
Kenichi Nakamura 10,000 shares
Teruaki Noda 10,000 shares
Yoshitaka Ohmura 10,000 shares
Toshiji Onuma 10,000 shares
Yoshio Funabiki 10,000 shares
Kanichi Kadotani 10,000 shares
Akifumi Katsushima 10,000 shares
Toshiyuki Kawaguchi 10,000 shares
Yasuo Kimura 10,000 shares
Yoshito Maeyama 10,000 shares