ロボット ロボマシン

ANNUAL REPORT 2018Year ended March 31, 2018

FANUC’s Symbol “Keyaki” – Zelkova tree

CONTENTS
Financial Highlights (Consolidated)･････････････2
A Message To Our Shareholders･･･････････････3
Summary of FANUC Business･･････････････････4
Business Report･･･････････････････････････････5
Management Policy･･･････････････････････････9
History of FANUC･･･････････････････････････ 10
Corporate Governance･･････････････････････ 11
Financial Section････････････････････････････ 13
Global Service Network･････････････････････ 36

Forward-looking statements
Statements contained in this report that relate to the future operating activities, business performance, events or conditions of
FANUC are forward-looking statements. Forward-looking statements are based on judgments made by FANUC’s management
based on information available at the time of publishing this report and are subject to significant assumptions. As such, theseforward-looking statements are subject to various risks and uncertainties and actual business results may vary substantially fromthe forecasts expressed or implied in forward-looking statements. Accordingly, you are cautioned not to place undue relianceon forward-looking statements. FANUC disclaims any obligation to revise forward-looking statements in light of new information,
future events or other findings.

1

Financial Highlights (Consolidated)Thousands of
U.S. dollars

Millions of yen

Years ended March 31

2016

2017

2018

2018

¥ 623,418¥ 536,942¥ 726,596$ 6,854,679

159,700

127,697

181,957

1,716,575

Total assets¥1,512,895¥1,564,769¥1,729,080$16,312,075

Net assets

1,334,910

1,369,457

1,467,630

13,845,566

For the year:
Net sales
Net income attributable to owners of parent
At the year end:

Yen

U.S. dollars

Per share data:
Net income¥Cash dividends

816.78¥

490.07658.63395.18¥

938.66$

8.86

563.205.31

Note : The U.S. dollar amounts shown above and elsewhere in this annual report are converted from yen, for convenience only, atthe rate of ¥106 = U.S.$1.00.

Net Sales

Net income attributable to owners of parent(Millions of yen)

(Millions of yen)

726,596

181,957
159,700

623,418

536,942

2016

2

2017

Total Assets(Millions of yen)

1,729,080
1,564,769
1,512,895

127,697

2018

2016

2017

2018

2016

2017

2018

FANUC CORPORATION ANNUAL REPORT 2018

A Message To Our Shareholders

During this period, demands generally remained favorable in all regions, such as Japan, the Americas, Europe, and Asia. Particularly, demands
for capital investment were robust in China.
Under these circumstances, the FANUC Group promoted initiatives allowing our customers to easily build and maintain a highly reliable, efficient, and innovative production system with our products and services, by uniting as one group under the slogans “one FANUC,” “Reliable”“Predictable” “Easy to Repair,” and “Service First.” In addition, while proceeding with the application of AI technology to our products, in October 2017, we started operation in Japan of the FIELD system (FANUC Intelligent Edge Link and Drive system), an open platform in which various
companies can participate, as an IoT initiative.
During the fiscal year ended March 31, 2018, FANUC posted consolidated net sales totaling ¥726,596 million, up 35.3%, consolidated operating income totaling ¥229,604 million, up 49.9%, and consolidated net income totaling ¥181,957 million, up 42.5%, compared with the previous
fiscal year.
It is anticipated that the active IT-related short-term demand in fiscal year 2017 will slow down in fiscal year 2018. Due to this and a variety offactors for uncertainty, including international trade friction and its impacts, and foreign exchange movements, the situation is expected to remain challenging and unpredictable as a whole.
Even under these circumstances, the FANUC Group, looking ahead to the future, will continue management based on a long-term perspectivethat is not affected by short-term events.
Based on this fundamental approach and the slogan of “one FANUC,” the FANUC Group shall take maximum advantage of our unique strength
in uniting our FA, ROBOT and ROBOMACHINE Divisions to jointly provide total solutions and take care of customers throughout the world.
In addition, the FANUC Group will adhere to its origins as a producer of equipment to be used in manufacturing sites, and shall be thorough in
implementing our slogan of “Reliable” “Predictable” “Easy to Repair” in product development, in order to minimize downtime in our customers’
factories and improve the operation rate. At the same time, as a supplier of capital goods, we will fulfill our supplier responsibility to customers
by ensuring a production system that customers can rely on even in the event of contingency.
Furthermore, we shall practice our basic policy of “Service First” in providing high-level services pursuant to FANUC’s global standard anywherein the world, and “lifetime maintenance” for as long as our customers use our products.
FANUC believes that AI and IoT are indispensable technologies in order for FANUC to continue developing and launching highly competitive
products in the market. By proactively adopting these technologies in all areas of the FA, ROBOT and ROBOMACHINE products, we will further
promote customers’ production efficiency.
In addition to the above policies focused on the long term, the FANUC Group will do its utmost to improve its research and development capabilities, boost the production capacity of its factories, and enhance its service system with the aim of strengthening the competitiveness ofthe FANUC Group as a whole and increasing its market share.
United as one group in the promotion of these measures, we will continue to ensure the practice of “Strict Preciseness and Transparency,” theprinciple of FANUC since its foundation, and make efforts to earn customer confidence and trust to an even greater extent in the FANUC Groupand become a company that will last forever.
Thank you for your continued support and assistance to FANUC.

Yoshiharu Inaba
Chairman & CEO

Kenji Yamaguchi
President & COO

3

Summary of FANUC Business

FA Business Division
Main Products

Results for Fiscal 2017

●

CNC

●

SERVO MOTOR

Consolidated net sales was ¥222,254
million, up 27.0% compared with the

●

LASER

previous fiscal year, accounting for 30.6%
of consolidated net sales.
Refer to page 5 for details

ROBOT Business Division
Main Products

Results for Fiscal 2017

Consolidated net sales was ¥227,827
million, up 19.9% compared with the● Handling Robot● Collaborative Robot previous fiscal year, accounting for 31.3%
of consolidated net sales.
●

Welding Robot

Refer to page 6 for details

ROBOMACHINE Business Division
Main Products

Results for Fiscal 2017●

ROBODRILL

Consolidated net sales was ¥190,182●

ROBOSHOT●ROBOCUT●ROBONANO

million, up 102.5% compared with theprevious fiscal year, accounting for 26.2%
of consolidated net sales.

Refer to page 7 for details

Service Division
Results for Fiscal 2017
Consolidated net sales was ¥86,333 million, up 10.8% compared with the previous fiscal year, accounting for 11.9% ofconsolidated net sales.

Refer to page 8 for details

4

FANUC CORPORATION ANNUAL REPORT 2018

Business Report

FA Business Division
Demand in the machine tool industry, the primarymarket for FANUC CNC systems, remained favorable
mainly in Japan, China, Europe, India, and othercountries. Demand was also steady in other Asian
economies. As a result, net sales of CNC systemsof the FANUC Group increased sharply comparedwith the previous fiscal year. In March 2018, thetotal accumulated CNC shipment volume surpassed
4,000,000 units.
In terms of development, “Fast Cycle-time Technology,” a control technology group capable of reducing cycle time, was developed for the nano CNC“FANUC 30i series” that delivers high-speed, highquality machining, and for FANUC’s global-standard
CNC “FANUC 0i series.” In addition, various otherfunctions were also developed to improve machining performance and the operability of machines.
Furthermore, we proactively worked to improve operation rates with IoT technology by upgrading andadding functions to “MT-LINKi,” software that aggregates and visualizes information from factory equipment, and “SERVO Viewer,” software that enables
monitoring of machines and machining operation
status from motor movement.
In the servo field, an ultra-large model was added to
the “Servo Motor αi-B series.” This is expected to
expand sales in the large servo press market. Furthermore, the lineup was enhanced and new features were developed to expand sales in various
markets.

CNC Series

SERVO MOTOR, SERVO AMPLIFIER

Although FANUC laser sales were sluggish domestically and abroad, efforts were continued to expand
sales of fiber laser oscillators.
In terms of development, for the fiber laser oscillator“FANUC FIBER LASER series,” a Fiber Selector wasdeveloped which splits laser light to allow a single
laser oscillator to supply laser light to two robots.
This is expected to help make FANUC’s laser robot
systems more competitive.
LASER

5

ROBOT Business Division
Sales of robots remained favorable in the Americas,
Europe, and China, with particularly strong demandin China. Sales were also steady in Japan. As a result,net sales by the ROBOT Business Division as a wholeincreased sharply compared with the previous fiscal
year. In November 2017, the total accumulated robot
production volume surpassed 500,000 units.
New developments included an addition to the
product lineup of the new “FANUC Robot SR series”
of SCARA robots, which feature high accuracy andhigh-duty performance and are optimized for assembling electronics and high-speed handling of electronic components.

R-2000iC

A 15 kg payload model was also added to the lineup of our green “Collaborative Robots,” which do not
require a safety fence and enable robots and humans to work together.
The new “3D Vision Sensor 3DV/400” was also developed, which is small-sized and light-weighted andcan be mounted on robots. It helps reduce cycle
time by greatly reducing imaging time compared toconventional sensors.
With such new products and new functions, therange of application of FANUC robots is anticipated
to expand further.

SCARA robot

Collaborative Robot

6

FANUC CORPORATION ANNUAL REPORT 2018

ROBOMACHINE Business Division
Sales of the ROBODRILL (small machining center),
ROBOSHOT (electric injection molding machine),and ROBOCUT (wire-cut electric discharge machine)
were steady for the automobile industry. IT-related
sales were also steady in general, with particularly
active short-term demand in China and other countries. As a result, net sales grew significantly compared with the previous fiscal year.
On the development front, for the “FANUC ROBODRILL α-DiB series” and wire-cut electric dischargemachine “FANUC ROBOCUT α-CiB series,” an “AI
thermal displacement compensation function” wasdeveloped, which uses machine learning technology
to predict and compensate for thermal displacement based on data from multiple heat sensors
placed on machine components. This function improves machining stability amid changes in ambient
temperature, and will help expand sales of related
ROBOMACHINE products. Furthermore, for the electric
injection molding “FANUC ROBOSHOT α-SiA series,”a “backflow monitoring function” was developed,
which predicts wear on check valves using deeplearning technology. This function will enhance preventive maintenance functions.

ROBODRILLROBOSHOTAs for the ROBONANO (ultra-precision machine),sale of the ultra-precision “FANUC ROBONANO
α-NMiA,” a machining system to which FANUC’s latest FA technology was applied, was launched in
September 2017 in Japan. Conformity with overseas
safety standards was also completed in preparation
for launch in overseas markets.
ROBOCUTROBONANO

7

Service Division
The Service Division, under the slogan of “Service
First,” offered rapid maintenance services in order tominimize downtime at customers’ factories in ourmaintenance service areas covering 108 countries
worldwide (as of June 30, 2018), while strengthening
our service system, improving service technologies,
enhancing service tools, and improving efficiency
through the adoption of IT.
As part of our efforts to strengthen our service system, the new Nagoya Service Center was opened.
Together with Hino Branch, this gives FANUC site redundancy for its call centers and parts centers, creating a system that enables swift service support forour customers even in the event of a disaster or other contingency.

Nagoya Service Center

Efforts for AI and IoTFANUC is pushing the application of AI technology,
with the cooperation of Preferred Networks, Inc. inall product groups of the FA, ROBOT and ROBOMACHINE Divisions. Going forward, FANUC will further
promote the introduction of intelligence to its products by more specifically utilizing AI technology inorder to differentiate itself from other companies
and to add value.
As for support for IoT, new features are added to theexisting LINKi function of the FA and ROBOMACHINE, and the operation of the FIELD system (FANUC Intelligent Edge Link and Drive system), an open
platform in which a wide range of companies canparticipate, began in October 2017 in Japan. The
FIELD system is an IoT product that connects various
equipment in manufacturing sites to improve productivity, and its major characteristic is that the system is able to process information on a real-timebasis at the edge (machining site, assembly site) of
manufacturing sites.
The combination of the FIELD system and AI technology is expected to have an even greater synergy
effect. In other words, the application of the AI technology (deep learning technology) of Preferred Networks to the FIELD system will further enhance theperformance of intelligent functions of products andallow the result thereof to be shared by IoT.

8

FIELD system

FANUC CORPORATION ANNUAL REPORT 2018

Management Policy

Basic Management Policy
FANUC was the first private company to succeed in the development of NC’s and servomechanism inJapan, and ever since this success in 1956, has consistently pursued automation in factories.
With its three pillars consisting of the FA business, which encompasses FANUC’s basic technologyof NC (numerical control) and servos, the ROBOT and ROBOMACHINE businesses which apply thisbasic technology, and the open platform, “FIELD system,” which is a manifestation of IoT, FANUC
contributes to the manufacturing industry in Japan and overseas by promoting automation andefficiency in manufacturing.
We ensure the practice of the principle, “preciseness and transparency,” which has been the principle of
FANUC since its foundation. We think it is important for the practical functioning of governance to share suchan easy-to-understand and simple principle among all officers and employees of the Group.

About “Preciseness and Transparency”
PrecisenessThe permanence and soundness of a company are created by preciseness.
Transparency
The corruption of an organization and the collapse of a company start from opacity.

The Three Philosophies of FANUC
The three businesses of FA, ROBOT and
ROBOMACHINE are unified with SERVICE
as “one FANUC,” to provide innovation andreassurance to manufacturing sites around theworld.

Reliable
Predictable
Easy to repair

FANUC aims
to minimize downtime
in all factories all over the world.
Conforming to the spirit of “Service First,”
FANUC provides lifetime maintenance toits products for as long as they are used bycustomers, through more than 260 service
locations supporting 108 countries throughout
the world.

9History of FANUC
1956
1959
1972
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
1974
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1975
1977

1978
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1980
1982
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1984

1985
1986

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1987
1989
1992


1997
1999
2003

2009

2012
2013
2015

2016
2018

The first NC and SERVO systems in the Japanese private sector were developed successfully.
The first electro-hydraulic pulse motor was developed.
FANUC was established.
CNC was introduced.
NC Drill was developed.
ROBOTs were developed and installed in FANUC factories.
The production and sale of DC SERVO MOTORs were started under GETTYS MANUFACTURING., INC license.
Wire-cut electric discharge machine was completed.
FANUC USA CORPORATION was established.
The commercial production and shipment of ROBOTs started (ROBOT-MODEL1).
KOREA NUMERIC CORPORATION was jointly established by FANUC and Hwacheon Machinery Works, Co. Ltd.
FANUC EUROPE S.A. was established.
The Fuji Factory was completed.
GMFanuc Robotics Corporation was jointly established in the U.S.A. by FANUC and General Motors.
AC SERVO MOTOR was developed.
FANUC headquarters was moved to the foot of Mt. Fuji.
All-electric plastics injection molding machine, “FANUC AUTOSHOT” was developed.
FANUC series 0 was developed.
FANUC TAIWAN Corporation was established.
GE Fanuc Automation Corporation was jointly established in the U.S.A. by FANUC and General Electric.
Digital SERVO was completed.
CO2 LASER was developed.
The Tsukuba Factory was constructed.
GMFanuc Robotics Corporation was restructured to FANUC’s wholly owned share holding company, FANUC Robotics Corporation, together with its subsidiaries.
BEIJING-FANUC Mechatronics CO., LTD was jointly established by FANUC and the Beijing Machine Tool Research Institute.
FANUC INDIA PRIVATE LIMITED was established.
SHANGHAI-FANUC Robotics CO., LTD. was jointly formed in China by FANUC and Shanghai Mechanical & Electric Industrial
Investment Corp.
The commercial production of 16i Series CNC started.
The commercial production of intelligent ROBOTs started.
The commercial production of 30i Series CNC started.
The joint venture with General Electric Company was resolved and the joint venture’s FA operations in the Americas weretransferred to FANUC America Corporation.
The commercial production of the Genkotsu-Robot, a Parallel Link Robot, started.
European subsidiaries were reorganized, and FANUC Europe Corporation was established.
Subsidiaries in North and South America were reorganized, and FANUC America Corporation was established.
Collaborative ROBOT CR-35 A was developed.
FIBER LASER was developed
Sales
The Mibu Factory was constructed
FANUC ACADEMY was constructed.

727

800
700

(Billions of Yen)
600
500
400
300
200
100

72

10

74

76

78

80

82

84

86

88

90

92

94

96

98

00

02
04
06
08
10
12
14
16
18
Consolidated from the year ended March 31,1983

0FANUC CORPORATION ANNUAL REPORT 2018

CORPORATE GOVERNANCE

Fundamental Concept of Corporate GovernanceBy establishing a specific code of conduct while practicing “preciseness and transparency,” we will makeefforts to maintain a high level of awareness of officers and employees of our Group into the future.
FANUC Code of Conduct

Officers and employees of FANUC shall practice the following with “Strict Preciseness and Transparency,” which
has been the principle of FANUC since its foundation.
(1) Upholding of a high standard of ethics(2) Compliance with laws and regulations, and internal rules(3) Contribution to the good of FANUC
Matters that are Prohibited Acts and Particularly Require Attention
1.	To discriminate based on race, creed, sex, social status, religion, nationality, age, mental or physical disability, etc.
2.	To conduct a transaction with the Company for the benefit of him/herself or any particular individual or organization, orotherwise engage in an act that creates, or appears to create, a conflict of interest with the Company.
3.	To engage in an act that is in contravention of the Anti-Monopoly Act, including, without limitation, an unjust or unfair transaction.
4.	To give money, gifts, entertainment or any other economic benefit to a government employee or any similar person in connection with his/her duties.
5.	To unlawfully acquire, use or disclose intellectual property, personal information, etc., of any company or individual.
6. To commit insider trading based on the material facts of any company, customer, etc.
7. To use forced labor or engage in an act that appears to use forced labor.
8. To engage in the development or spread of technology that harms the environment.
9.	To agree to an unjust request of an anti-social force, or conduct a transaction with an anti-social force or any company orindividual that is related to an anti-social force.
*FANUC will establish a contact point for whistle-blowing through which, in principle, all officers and employees of the FANUC Group, including subsidiaries and sub-subsidiaries, can whistleblow to the headquarters of FANUC CORPORATION.
*This code of conduct applies generally to all officers and employees of the FANUC group, including subsidiaries and sub-subsidiaries (including contract workers).

Organizational Structure
As we are surrounded by a very rapidly changing business environment, unless the Board of Directors understands accurate
information about customer and market trends, service status, etc., the Board will not be able to make appropriate managerial decisions. Due to these circumstances, in principle, our directors other than outside directors execute the business of ourcompany, aiming at a system where directors are involved in daily operations themselves, acquire accurate information themselves, and mutually share such information among the members of the Board of Directors. Furthermore, we have chosen to
be a company with Audit & Supervisory Board, as an organizational design that can make best use of these characteristics.

Directors and Audit & Supervisory Board Members
Directors (13 in total, including 3 outside directors)
Representative Director, Chairman and CEO
Dr. Yoshiharu Inaba
Representative Director, President and COO
Kenji Yamaguchi (General Manager, FA Business Division)
Representative Director, Senior Executive Vice President and CTO
Hiroyuki Uchida (General Manager, ROBOMACHINE Business Division)
Representative Director, Senior Executive Vice President and CFO
Yoshihiro Gonda (General Manager, Corporate Administration Division)
Director, Executive Managing Officer
Dr. Kiyonori Inaba (General Manager, ROBOT Business Division)
Hiroshi Noda (Vice General Manager (R&D), FA Business Division)
Katsuo Kohari (Vice General Manager (Sales), FA Business Division, General Manager, Service Division)
Shunsuke Matsubara (General Manager, Research & Development Administration Division)Toshiya Okada (Vice General Manager, Corporate Administration Division, General Manager, Legal Division)
Director
Richard E. Schneider (Chairman, FANUC America Corporation)
Kazuo Tsukuda (Outside)
Yasuo Imai (Outside)
Masato Ono (Outside)
Audit & Supervisory Board Members (5 in total, including 3 outside Audit & Supervisory Board Members)
Shunsuke Kimura
Naoki Shimizu
Dr. Takeo Nakagawa (Outside)
Masaharu Sumikawa (Outside)
Hajime Harada (Outside)11

Outside Directors and Outside Audit & Supervisory Board Members
Outside Directors

Reason for appointment

Kazuo Tsukuda

In order to develop the Company’s business steadily and to enhance its corporate value, it is quite effective to introduce to the Board of Directors
an outsider’s eye with a broad perspective and excellent insight. Kazuo Tsukuda has been providing the Company with extremely valuable advice,with his outstanding knowledge of manufacturing and extensive experience in management, having a deep understanding of the Company’sbusiness. He will be expected to continue to contribute to the Company’s Board of Directors from an independent position as Outside Director.

Yasuo Imai

After joining in the Ministry of International Trade and Industry (currently, the Ministry of Economy, Trade and Industry), Yasuo Imai had experienceof being posted overseas as General Manager of the Washington Office of Japan National Oil Corporation. He successfully held a number of
positions starting from the post of Deputy Director-General, Director-General of the Petroleum Department of Agency for Natural Resources andEnergy. Subsequently he moved to the post of Director-General of the Manufacturing Industries Bureau, and then to the post of Commissionerof the Japan Patent Office. Based on these experiences, Yasuo Imai, being familiar with foreign affairs, has a global perspective and extensive
knowledge concerning the manufacturing industry and the protection of intellectual property, etc. At the same time, he is currently an active
corporate executive and is also knowledgeable about corporate management due to having more than 11 years’ experience in business. Yasuo Imai
has been providing the Company with extremely valuable advice as Outside Director with his extensive experience in various fields and from his
broad vision. He will be expected to continue to contribute to the Company’s Board of Directors from an independent position as Outside Director.

Masato Ono

Our company has specialized in business activities in the narrow field of the automation of manufacturing and as such the Board of Directors
consists mostly of Directors with engineering background focusing on its core business. Given this context, Masato Ono has been providing theCompany with extremely valuable advice on enhancing corporate value from a totally different point of view by contributing to active discussions
at the meeting of the Board of Directors based on his many years of experience in management of financial institutions. Although Masato Ono
has served as Deputy President and Representative Director of Mizuho Financial Group, Inc., he meets the Company’s criteria for independenceof Outside Directors and Outside Audit & Supervisory Board Members (see the section “Independent Directors/Audit & Supervisory Board
Members”), (The Company has never applied for a loan from any bank of Mizuho Financial Group.), it has been over 10 years since he retired
as Director of the Mizuho Financial Group, Inc., and there is no risk of his independence being affected by this position. He will be expected tocontinue to contribute to the Company’s Board of Directors from an independent position as Outside Director.

Outside Audit &Supervisory Board
Members

Reason for appointment

Takeo Nakagawa

As Professor Emeritus of the University of Tokyo and a corporate manager, Takeo Nakagawa has been consistently engaged in “monozukuri(manufacturing).” For this reason, he has given us objective and valuable advice from various aspects based on his profound understanding of theCompany’s business. We believe that we can expect him to continue to play a significant role going forward.

Masaharu Sumikawa

Masaharu Sumikawa, who has extensive knowledge based on his many years of experience in corporate management in the manufacturingindustry, has been providing the Company with advice, etc. from a point of view different from that of the Company while having a deep
understanding of the manufacturing industry, contributing greatly not only to statutory audit activities but to the Board of Directors and othermeetings that require active and rational discussions. We believe that we can expect him to continue to contribute to the Board of Directors.

Hajime Harada

Hajime Harada has been providing the Company with extremely valuable advice whenever necessary based on his wide experience andknowledge as a lawyer. Although his term of office as Outside Audit & Supervisory Board Member of the Company has reached 14 years as of theend of June 2018, he has no business transactions with or interest in the Group. As a lawyer, Hajime Harada has a responsibility under the Basic
Rules on the Duties of Practicing Attorneys to “maintain his or her freedom and independence” (Article 20 of the Rules) and to “perform his or her
duties fairly” (Article 5), and in fact he gives his frank opinion from an independent standpoint. We therefore believe that he maintains sufficient
independence now and in the future. In particular, he has a deep understanding of corporate governance, an issue that has grown increasingly
important in recent years, gained through his experience including service as a lawyer on compliance committees at another listed company formany years. Furthermore, he has advanced, wide-ranged and specialized knowledge, based on his experience including court cases in a variety offields such as systems development, intellectual property rights, antimonopoly law, international joint ventures, and claims collection. For thesereasons, we can expect him to continue to offer appropriate advice from an extremely broad perspective with regard to risks that the Company
may face in the future and other matters.

Criteria for Independence of Outside Directors and Outside Audit & Supervisory Board Members
With regard to Independent Outside Directors and Outside Audit & Supervisory Board Members, the Company nominates candidates
who do not have any certain interest in the Company, and who can be expected to make frank comments without hesitation at Boardof Directors meetings, etc. Furthermore, in order to ensure such real independence, as minimum requirements, candidates must meeteach of the following conditions.
1. Business transactions between the Company and the company from which the candidate comes must amount to less than 2% of therespective consolidated sales of both companies.
2. The Company must not have any loans from the company from which the candidate comes (if the candidate comes from a bank.)
3. The Company must not have any important transactions such as advisory contracts with the candidate or the firm he works for (ifthe candidate is a lawyer or other professional.)
4. The candidate must not come from the audit firm that is the Company’s Accounting Auditor.
5. There must be no other particular reasons that could give rise to a conflict of interest with the Company.
6. The candidate must not be the spouse or a relative within the second degree of anyone who does not meet the above conditions
1 through 5.

12

FANUC CORPORATION ANNUAL REPORT 2018

Financial Section
TEN-YEAR FINANCIAL SUMMARY･･･････････････････････････････ 14
CONSOLIDATED STATEMENTS OF INCOME････････････････････ 16
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME･･･ 17
CONSOLIDATED BALANCE SHEETS･････････････････････････････ 18
CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS･･･ 19
CONSOLIDATED STATEMENTS OF CASH FLOWS･･･････････････ 20
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS･････ 21
NON-CONSOLIDATED STATEMENTS OF INCOME･ ･････････････ 34
NON-CONSOLIDATED BALANCE SHEETS･ ･･････････････････････ 35

13

Ten-Year Financial Summary

2009

2010

2011

2012

¥ 388,271¥ 253,393¥ 446,201¥ 538,492

134,449

55,024

189,757

221,834

34.6%

21.7%

42.5%

41.2%

Income before income taxes

149,148

55,826

193,495

228,578

Net income attributable to owners of parent

97,16237,511

120,155

138,819

Current assets

683,719

623,573

753,992

848,669

Current liabilities

55,72556,18889,589115,270

Total assets

970,441

891,651

1,013,000

1,130,625

Net assets

893,282

812,657

894,494

985,322467.55187.75613.75709.20————140.2756.33

184.13212.77

4,177.28

4,133.89

4,550.71

5,013.69

Years ended March 31

Net sales
Operating income
Operating income as a percentage of net sales

Per share data (Yen and U.S. Dollars):

Net income:
Basic
DilutedCash dividends
Net assets

Note : The U.S. dollar amounts shown above and elsewhere in this annual report are converted from yen, for convenience only,at the rate of ¥106 = U.S.$1.00.

14

FANUC CORPORATION ANNUAL REPORT 2018

Millions of yen, except for per share data

Thousands of
U.S. dollars,
except for per share data

2013

2014

2015

2016

2017

2018

2018

¥ 498,395¥ 450,976¥ 729,760¥ 623,418¥ 536,942¥ 726,596$ 6,854,679

184,821

164,134

297,839

215,567

153,217229,604

2,166,075

37.1%

36.4%

40.8%

34.6%

28.5%

31.6%

31.6%

191,242

174,360

311,951

229,361

168,829

249,525

2,354,009

120,484

110,930

207,599

159,700

127,697

181,957

1,716,575

906,440

1,027,801

1,273,355

1,072,770

1,059,644

1,127,996

10,641,472

92,97399,449172,611106,116

120,715

191,070

1,802,547

1,219,113

1,343,904

1,611,626

1,512,895

1,564,769

1,729,080

16,312,075

1,094,129

1,199,863

1,386,695

1,334,910

1,369,457

1,467,630

13,845,566

615.59566.86

1,061.02

816.78658.63938.66

8.86

—

—

—

—

—

—

—

184.68170.06636.62490.07395.18563.205.31

5,565.64

6,102.20

7,049.39

6,825.27

7,031.79

7,540.24

71.13

15

Consolidated Statements of Income

Thousands of
U.S. dollars(Note 3)

Millions of yen

2016

2017

2018

2018

¥ 623,418¥ 536,942¥ 726,596$6,854,679

326,912303,415

398,398

3,758,471

296,506

233,527

328,198

3,096,208

80,93980,31098,594930,133

215,567

153,217229,604

2,166,075

Interest income

2,537

2,343

3,189

30,085Equity in earnings of affiliates

11,494

10,022

16,307

153,840

(237)

3,247

425

4,009

13,794

15,612

19,921

187,934

229,361

168,829

249,525

2,354,009

Current

66,12347,736

67,660638,302

Deferred

2,906(6,684)(572)(5,397)

Net income

160,332

127,777

182,437

1,721,104

632

80

480

4,529

¥ 159,700¥ 127,697¥ 181,957$1,716,575

Years ended March 31

Net sales
Cost of goods sold (Note 9)
Gross profit
Selling, general and administrative
expenses (Note 9)
Operating income

Other income (expenses):

Other, net (Note 10)

Income before income taxes
Income taxes:

Net income attributable tonon-controlling interests
Net income attributable to owners of parent

U.S. dollars(Note 3)

Yen

Amounts per share of common stock:

Net income
Cash dividends
See notes to the consolidated financial statements.

16¥

816.78490.07¥

658.63395.18¥

938.66563.20

$

8.86
5.31

FANUC CORPORATION ANNUAL REPORT 2018

Consolidated Statements of Comprehensive Income

Thousands ofMillions of yen

U.S. dollars

2016

2017

2018

2018

¥160,332¥127,777¥182,437$1,721,104

Valuation difference on availablefor-sale securities(3,091)

4,203

4,496

42,415

Foreign currency translation adjustment(21,866)(2,076)(1,765)(16,651)

Remeasurements of defined benefit
plans(15,337)

(443)

2,411

22,745

Share of other comprehensive
income of affiliates accounted forusing equity method(2,085)(4,527)

1,827

17,236

Total other comprehensive income(42,379)(2,843)

6,969

65,745¥117,953¥124,934¥189,406$1,786,849

117,873

124,774

188,956

1,782,604

80

160

450

4,245

Years ended March 31

Net income
Other comprehensive income

Comprehensive income
Comprehensive income attributable to:
Owners of parent
Non-controlling interests

17

Consolidated Balance Sheets
Millions of yen

As of March 31

ASSETS
Current assets:
Cash and bank deposits
Receivables, trade:
Notes and accounts
Allowance for doubtful accounts
Marketable securities
Finished goods
Work in progress
Raw materials and supplies
Deferred income taxes (Note 11)
Other current assets
Total current assets
Investments (Note 5)
Property, plant and equipment, at cost:
Land
Buildings
Machinery and equipment
Construction in progress
Less accumulated depreciation
Property, plant and equipment, net
Intangible assets:
Goodwill
Other intangible assets
Total intangible assets
Total assets
LIABILITIES AND NET ASSETS
Current liabilities:
Payables, trade
Accrued income taxes
Warranty reserves
Other current liabilities
Total current liabilities
Long-term liabilities:
Net defined benefit liability (Note 6)
Other long-term liabilities
Total long-term liabilities
NET ASSETS
Shareholders’ equity:
Common stock:
Authorized - 400,000,000 shares
Issued - 204,059,017 shares
Capital surplus
Retained earnings
Treasury stock, at cost :2017 - 10,216,648 shares2018 - 10,220,284 shares
Total shareholders’ equity
Accumulated other comprehensive income:
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets
See notes to the consolidated financial statements.

18

Thousands of
U.S. dollars(Note 3)

2017

2018

2018

¥629,761¥602,329$5,682,349

120,787(1,287)145,000
60,58043,892
13,864
24,384
22,663
1,059,644
94,048

175,460(1,424)145,000
71,68056,40522,033
26,48330,0301,127,996
108,143

1,655,283(13,434)
1,367,925
676,226
532,123
207,858
249,840
283,302
10,641,472
1,020,216

134,400
339,090
184,80922,015(273,924)
406,390

143,036
383,775
206,788
54,654(302,376)
485,877

1,349,396
3,620,519
1,950,830
515,604(2,852,604)
4,583,745

—
4,687
4,687
¥1,564,769

—
7,064
7,064
¥1,729,080—
66,642
66,642$16,312,075¥36,01122,994
6,994
54,716
120,715¥52,901
46,466
7,047
84,656
191,070$499,066
438,358
66,481
798,642
1,802,547

71,175
3,422
74,59767,562
2,818
70,380637,377
26,585663,962

69,01496,2081,307,254

69,01496,265
1,398,977

651,075
908,160
13,197,897(90,677)—
1,381,799—(91,020)
1,473,236—(858,679)
13,898,453

8,594
(710)
(26,528)(18,644)
6,302
1,369,457¥1,564,769

13,090(619)(24,117)(11,646)6,040
1,467,630¥1,729,080

123,491(5,840)(227,519)(109,868)
56,981
13,845,566$16,312,075

FANUC CORPORATION ANNUAL REPORT 2018

Consolidated Statements of Changes in Net Assets
Millions of yen

Commonstock
Balance at March 31, 2015
Restated balance
Cash dividends
Net income
Change caused by merger
Purchase of treasury stock
Disposal of treasury stock
Retirement of treasury stock
Net change except shareholder’sequity during the year
Balance at March 31, 2016
Restated balance
Cash dividends
Net income
Change caused by merger
Purchase of treasury stock
Disposal of treasury stock
Retirement of treasury stock
Change in equity from transactions
with non-controlling shareholders
Net change except shareholder’sequity during the year
Balance at March 31, 2017
Restated balance
Cash dividends
Net income
Change caused by merger
Purchase of treasury stock
Disposal of treasury stock
Retirement of treasury stock
Change due to tax rate change
Change in equity from transactions
with non-controlling shareholders
Net change except shareholder’sequity during the year
Balance at March 31, 2018

¥69,014¥69,014¥69,014¥69,014

Valuation
Foreign RemeasureNonTreasury
difference on currency
ments
Total
controllingstock,
available-for- translation of defined
net assets
at costinterests
sale securities adjustment benefit plans¥96,277 ¥1,500,635 (¥312,855)¥7,482¥29,372(¥10,748)¥7,518 ¥1,386,695¥96,277 ¥1,500,635 (¥312,855)¥7,482¥29,372(¥10,748)¥7,518 ¥1,386,695(151,385)(151,385)
159,700
159,700—(17,194)(17,194)7411(78) (239,393)
239,471—

CapitalsurplusRetainedearnings¥96,206 ¥1,269,557¥96,206 ¥1,269,557(76,623)
127,6972(2)(13,377)(¥90,574)(¥90,574)(3,091)(23,398)(15,337)(1,091)¥4,391¥4,391¥5,974¥5,974(¥26,085)(¥26,085)¥6,427 ¥1,334,910¥6,427 ¥1,334,910(76,623)
127,697—(13,483)3—(13,483)1
13,3792¥69,014¥69,0142¥96,208 ¥1,307,254¥96,208 ¥1,307,254(91,969)
181,957
473
1
(1)

(97)
1,359

(¥90,677)(¥90,677)

4,203(6,684)(443)¥8,594¥8,594(¥710)(¥710)(¥26,528)(¥26,528)

(442)
1
98

(125)

(3,049)¥6,302 ¥1,369,457¥6,302 ¥1,369,457(91,969)
181,957
473
(442)
2
—
1,359

57

¥69,014(42,917)57¥96,265 ¥1,398,977(¥91,020)

4,496

91

2,411

¥13,090(¥619)(¥24,117)

(262)

6,736

¥6,040 ¥1,467,630

Thousands of U.S. dollars (Note 3)

Commonstock
Balance at March 31, 2017
Restated balance
Cash dividends
Net income
Change caused by merger
Purchase of treasury stock
Disposal of treasury stock
Retirement of treasury stock
Change due to tax rate change
Change in equity from transactions
with non-controlling shareholders
Net change except shareholder’sequity during the year
Balance at March 31, 2018

$651,075$651,075

Valuation
Foreign RemeasureNonTreasury
difference on currency
ments
Total
controllingstock,
available-for- translation of defined
net assets
at costinterests
sale securities adjustment benefit plans$907,623 $12,332,585 ($855,443)$81,075($6,698) ($250,264)$59,453 $12,919,406$907,623 $12,332,585 ($855,443)$81,075($6,698) ($250,264)$59,453 $12,919,406(867,632)(867,632)
1,716,575
1,716,575
4,462
4,462
(4,170)(4,170)
9
9
18
(10)
(915)
925
—
12,821
12,821

CapitalsurplusRetainedearnings

538$651,075$908,160 $13,197,896

538($858,679)

42,416859

22,745$123,491($5,839)($227,519)(2,472)63,548$56,981 $13,845,566

See notes to the consolidated financial statements.

19

Consolidated Statements of Cash Flows
Thousands of
U.S. dollars(Note 3)

Millions of yen

2016

2017

2018

2018

¥229,361¥168,829¥249,525$2,354,009

21,106(536)
21,311(3,909)(11,494)
29,207
1,602(13,749)(21,506)
251,393
10,061(121,281)460
140,633

26,530(239)
3,178(3,789)(10,022)(17,386)(16,519)
11,292(6,470)155,404
8,562(43,039)786
121,713

34,190462(3,840)(4,793)(16,307)(51,908)(31,527)
16,87518,369211,046
9,818(44,983)
109
175,990322,547
4,358(36,226)(45,217)(153,840)(489,698)(297,425)
159,198
173,294
1,991,000
92,623(424,368)
1,028
1,660,283

Cash flows from investing activities
Payments into time deposits
Purchases of property, plant and equipment
Purchases of investment securities
Other
Net cash used in investing activities(102,008)(7,830)(2,839)(112,677)(87,509)
(559)
(494)
(88,562)(21,426)(103,016)(1,481)(4,334)(130,257)(202,132)(971,849)(13,972)(40,887)(1,228,840)

Cash flows from financing activities
Purchases of treasury stock
Dividends paid
Other
Net cash used in financing activities(17,253)(151,237)(1,082)(169,572)(13,481)(76,505)(281)(90,267)(442)(92,003)(652)(93,097)(4,170)(867,953)(6,151)(878,274)(17,958)215(2,283)(21,538)(159,574)
991,236(56,901)
831,662(49,647)
774,761(468,369)
7,309,068

—

—

789

7,443

¥831,662¥774,761¥725,903$6,848,142

Years ended March 31

Cash flows from operating activities
Income before income taxes
Adjustments to reconcile income
before income taxes to net cash
provided by operating activities:
Depreciation and amortization
Allowance for doubtful accounts
Net defined benefit liability
Interest and dividend income
Equity in earnings of affiliates, net(Increase) decrease in receivables, trade(Increase) decrease in inventories
Increase (decrease) in payables, trade
Other
Cash generated from operations
Interest and dividends received
Income taxes paid
Other
Net cash provided by operating activities

Effect of exchange rate changes on cash
and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Increase in cash and cash equivalents resulting
from merger with unconsolidated subsidiaries
Cash and cash equivalents at end of year
See notes to the consolidated financial statements.

20

FANUC CORPORATION ANNUAL REPORT 2018

Notes to the Consolidated Financial Statements

1. Basis of preparation
The accompanying consolidated financial statements of FANUC CORPORATION (the “Company”) and its consolidated subsidiaries (together, the“Group”) are prepared on the basis of accounting
principles generally accepted in Japan, which are
different in certain respects as to the applicationand disclosure requirements of International Financial Reporting Standards, and have been compiled from the consolidated financial statements
prepared by the Company as required by the Financial Instruments and Exchange Law of Japan.
In addition, the notes to the consolidated financial statements include information which is
not required under accounting principles generally accepted in Japan but is presented herein
as additional information.
In preparing the accompanying consolidated
financial statements, the Company has madecertain reclassifications and rearrangements tothe consolidated financial statements preparedin Japan in order to present them in a format
which is more familiar to readers outside Japan.

2. Summary of significant accounting policies(b) Cash equivalents
The Group considers all highly liquid investmentswith a maturity of three months or less when purchased to be cash equivalents.
(c) Translation of foreign currency accounts
All monetary receivables and payables denominated in foreign currencies are translated into
Japanese yen at the exchange rates in effect atthe balance sheet date. Foreign exchange gainor loss on translation is recognized in the consolidated statements of income.
Assets and liabilities of the consolidated subsidiaries outside Japan are translated into Japanese yen at the applicable year-end rates except
for shareholders’ equity which is translated at thehistorical rates. Differences arising from translation are reflected as “Foreign currency translation
adjustments” in a separate component of net assets. Income and expense accounts are translated at the average rates for the year.
(d) Valuation of securities
Securities other than investments in affiliates areclassified as available-for-sale securities (“Other
securities”) and include securities other than(a) Principles of consolidation

trading securities and securities held to maturity.

The consolidated financial statements include the

Other securities whose fair value is readily deter-

accounts of the Company and, with minor excep-

minable are stated at fair value with the corre-tions, the subsidiaries under its control. Intercom-

sponding unrealized gain or loss, net of taxes,

pany accounts and significant intercompany

recorded directly as a separate component oftransactions have been eliminated in consolida-

net assets. Other securities whose fair value istion.

not readily determinable are stated at moving

The investments in unconsolidated subsidiaries
and affiliated companies over which the Company

average cost. The cost of other securities sold is
calculated by the moving average method.

exerts substantial influence are, with minor exceptions, stated at their underlying equity value.
Goodwill is amortized over a period of five
years.

(e) Allowance for doubtful accounts
The allowance for doubtful accounts is provided
at an amount deemed sufficient to cover estimated future losses.

21

(f) Inventories

Past service cost is being amortized as incurred

Raw materials and purchased components areby the straight-line method over a period (10 years)

stated primarily at cost determined by the mostwhich is shorter than the estimated average

recent purchase price method.

remaining years of service of the eligible employees.

Work in progress is stated at actual cost which includes direct costs for materials and labor and over-(j) Revenue recognition

head manufacturing costs including depreciation.

In general, sales of products, other than those ex-

Finished goods are stated principally at cost(the valuation method) by the average method.

ported, are recognized in the accounts upon acceptance by the customers. Export sales arerecognized as of the respective dates of ship-(g) Property, plant and equipment and depreciation

ment.

Property, plant and equipment, including significant renewals and additions, is stated at cost.

(k) Income taxes

Depreciation is computed principally by theDeferred income taxes are provided by the asset

declining-balance method at rates based on theand liability method. Deferred income tax assets

estimated useful lives of the respective assets

and liabilities are determined based on the tem-

which vary according to general classification,

porary differences between the financial state-type of construction and use.

ments and the tax bases of the assets andMaintenance and repairs, including minor re-liabilities, using the enacted tax rates which will

newals and improvements, are charged to in-

be in effect during the years in which the differ-come as incurred.

ences are expected to reverse.

(h) Warranty reserves(l) Net income per share

The Group provides warranty reserves for goods

Net income per share is calculated based on thesold under warranty agreements. Estimates fornet income available for distribution to share-

these warranty reserves are based primarily on

holders of common stock and the weighted-av-

historical experience. In addition, they are calcu-

erage number of shares of common stock

lated with reference to current information con-outstanding during the year.

cerning specific issues.
(m) Shareholders’ equity

22(i) Retirement benefits

The Companies Act of Japan provides that an

The benefit formula basis is applied as theamount equal to 10% of the amount to be disbursed

method for attributing the expected retirement

as distributions of capital surplus (other thanbenefits to periods of service for the calculation

capital reserve) and retained earnings (otherof the retirement benefit obligation.

than legal reserve) be transferred to capital re-Actuarial gain or loss is amortized in the year

serve and legal reserve, respectively, until thefollowing the year in which the gain or loss is

sum of the capital reserve and the legal reserve

recognized primarily by the straight-line method

equals 25% of the capital stock account. Such dis-over a period (10 years) which is shorter than thetributions can be made at any time by resolution

estimated average remaining years of service ofof the shareholders or by the Board of Directors

the eligible employees.

if certain conditions are met.

FANUC CORPORATION ANNUAL REPORT 2018

3. U.S. dollar amounts
The Company and its domestic consolidated subsidiaries maintain their books of account in yen.
The U.S. dollar amounts included in the accompanying consolidated financial statements and thenotes thereto represent the arithmetic results oftranslating yen into dollars at ¥106 = U.S.$1.00,
the approximate rate of exchange prevailing on
March 31, 2018.
U.S. dollar amounts are presented solely forthe convenience of the reader and the translation is not intended to imply that assets and liabilities which originate in yen have been or could
readily be converted, realized or settled in U.S.
dollars at the above or any other rate.

4. Financial instruments
Basic policy to manage financial instruments andrelated risk

fluctuations. Investment securities, which mainly
consist of stocks in companies with business relationships, are exposed to the risk of market pricefluctuations.
Payables such as trade notes and trade accounts are mostly due within one year.
(3) Risk management for financial instruments( i ) Management of credit risk
The Group monitors due dates and manages
balances of receivables by customer according
to internal guidelines and periodically checks
credit risks of key customers taking into account their financial position and other factors.
( ii ) Management of market risk
The Group regularly monitors each yen equivalent of deposits denominated in forreign currencies.
The Group regularly monitors the market(1) Group policy for financial instruments

price and the financial condition of the issuer

The Company and its consolidated subsidiaries relywith respect to its securities and continuouslyon their own resources to finance operations andreviews the investment made in each compa-

do not raise funds from external resources.

ny, taking into account its relationship with the

In addition, they do not enter into any deriva-

counterparty.

tive contracts.
(2) Nature and extent of risks arising from financial instruments
Deposits denominated in foreign currencies are
exposed to risk of exchange fluctuations.
Receivables such as trade notes and trade accounts are exposed to customer credit risk andreceivables denominated in foreign currencies
that arise from overseas operations are exposedto the market risk of fluctuation in foreign currency exchange rates. Marketable securities are negotiable certificate of deposits, which are easily
convertible into cash and within three months,
and thus are exposed to insignificant risk of price23

Fair value of financial instruments
The carrying amount and fair value of financial instruments at March 31, 2017 and 2018 are summarized
as follows. Financial instruments whose fair value is not readily determinable are not included in thetable below.
2017

Millions of yen

Carrying
amountFair
value

Cash and bank deposits¥629,761¥629,761—

Notes and accounts receivables

120,787

120,787—

Marketable securities and investment securities
Other securities

168,156

168,156—

Notes and accounts payables(36,011)(36,011)—

Accrued income taxes(22,994)(22,994)—2018

Variance

Millions of yen

Thousands of U.S. dollars

Carrying
amountFair
value

Cash and bank deposits¥602,329¥602,329—$5,682,349 $5,682,349—

Notes and accounts receivables

175,460

175,460—

1,655,283

1,655,283—

174,124

174,124—

1,642,679

1,642,679—

Notes and accounts payables(52,901)(52,901)—(499,066)(499,066)—

Accrued income taxes(46,466)(46,466)—(438,358)(438,358)—

Variance

Carrying
amountFair
value

Variance

Marketable securities and investment securities
Other securities

Cash and bank deposits, Notes and accounts receivable
The carrying value of cash and bank deposits and notes and accounts receivables approximate fairvalue due to their short maturities.
Marketable securities and investment securities
Marketable securities are negotiable certificates of deposit (NCD), and the carrying value of those
approximate fair value due to their short maturities.
Investment securities are equity securities whose fair value is measured at the quoted market
price at the stock exchange.
See Note 5 for information on the fair value of investment securities by classification.
Notes and accounts payables
The carrying value of notes and accounts payables approximate fair value due to their shortmaturities.

24

FANUC CORPORATION ANNUAL REPORT 2018

The carrying amount of financial instruments whose fair value is not readily determinable at March
31, 2017 and 2018, is as follows:
Thousands of
U.S. dollars

Millions of yen

Unlisted stock(consolidated balance sheet amount)

2017

2018

2018

¥49,039¥60,822$573,792

Redemption schedule after fiscal year-end for monetary assets and securities with maturity dates asof March 31, 2017 and 2018 is as follows:
2017

Millions of yen

Within 1 year

1 - 5 years

5 - 10 years

Due after
10 years

Cash and bank deposits¥629,761———

Notes and accounts receivables

120,787

—

—

—

—

—

—

—

145,000———¥895,548———

1 - 5 years

5 - 10 years

Due after
10 years¥ 602,329

—

—

—

175,460

—

—

—

—

—

—

—

145,000———¥ 922,789

—

—

—

1 - 5 years

5 - 10 years

Due after
10 yearsInvestment securities
Other securities with maturity(1) Government bond(2) Negotiable certificates of deposit
Total
2018

Millions of yen

Within 1 year
Cash and bank deposits
Notes and accounts receivables
Investment securities
Other securities with maturity(1) Government bond(2) Negotiable certificates of deposit
Total
2018

Thousands of U.S. dollars

Within 1 year
Cash and bank deposits$5,682,349

—

—

—

Notes and accounts receivables

1,655,283

—

—

—

—

—

—

—

1,367,925———$8,705,557

—

—

—

Investment securities
Other securities with maturity(1) Government bond(2) Negotiable certificates of deposit
Total

25

5. Other securities and investments
Other securities whose fair value was determinable at March 31, 2017 and 2018 are summarized as follows:
2017

Other securities
with unrealized gain
Other securities
with unrealized loss
Total
2018

Other securities
with unrealized gain
Other securities
with unrealized loss
Total
2018

Book value
Type ofreflected in the
securities
balance sheet
Equity securities¥ 23,098
Subtotal
23,098Negotiablecertificates ofdeposit
145,000
Equity securities
58
Subtotal
145,058¥168,156

Book value
Type ofreflected in the
securities
balance sheet
Equity securities¥ 29,084
Subtotal
29,084
Negotiablecertificates ofdeposit
145,000
Equity securities
40
Subtotal
145,040¥174,124

Other securities
with unrealized loss
Total

26

Acquisition
cost

Net

¥ 12,145
12,145¥10,953
10,953145,000
59
145,059¥157,204

—
(1)
(1)
¥10,952

Millions of yen

Acquisition
cost

Net

¥ 12,204
12,204¥16,880
16,880145,000
48
145,048¥157,252

—
(8)
(8)
¥16,872

Thousands of U.S. dollars

Book value
Acquisitionreflected in thecostbalance sheet
Equity securities$ 274,377 $ 115,132
Subtotal
274,377
115,132
Negotiablecertificates ofdeposit
1,367,925
1,367,925
Equity securities
377
452
Subtotal
1,368,302
1,368,377$1,642,679 $1,483,509
Type ofsecurities

Other securities
with unrealized gain

Millions of yenNet$159,245
159,245—(75)(75)$159,170

FANUC CORPORATION ANNUAL REPORT 2018

Other securities sold during the years ended March 31, 2017 and 2018 are not presented since they
are insignificant.
Investments at March 31, 2017 and 2018 consisted of the following:

Investments in affiliates
Other securities
Allowance for doubtful accounts
Other
Total

2017

Millions of yen¥47,169
25,026(2)
21,854¥94,0482018¥ 57,531
32,415(371)
18,568¥108,143

Thousands of
U.S. dollars

2018$ 542,745
305,802(3,504)
175,173$1,020,216

27

6. Retirement benefits
The Company and its domestic consolidated subsidiaries provide employees’ pension fund plans andlump-sum severance payment plans as their defined benefit pension plans.
Certain overseas consolidated subsidiaries also provide defined benefit pension plans and defined contribution pension plans.
Information on the pension plans for the years ended March 31, 2017 and 2018 is as follows;
1. Defined benefit pension plans(1) Changes in projected benefit obligation (PBO)

Thousands of
U.S. dollars

Millions of yen

2017

2018

2018

¥178,635¥185,729$1,752,160

Service cost

6,280

4,692

44,264

Interest cost

1,897

1,750

16,509Actuarial gain or loss

1,087

2,407

22,708Benefit payments(2,735)(2,922)(27,566)—(3,742)(35,302)

Influence of exchange(251)(1,324)(12,491)

Other

816

401

3,784

¥185,729¥186,991$1,764,066

PBO at beginning of year

Accrued past service cost

PBO at end of year
(2) Changes in the fair value of plan assets

Thousands of
U.S. dollars

Millions of yen

2018

2018

¥110,289¥114,554$1,080,698

Expected return on plan assets

1,144

1,202

11,340

Actuarial gain or loss

(2,394)

(37)

(349)

Fair value of plan assets at beginning of year

Employer contribution

7,263

6,864

64,755

Benefit payments(1,648)(1,715)(16,179)

Influence of exchange(40)(1,405)(13,255)

Other

(60)

(34)

(321)

¥114,554¥119,429$1,126,689

Fair value of plan assets at end of year

28

2017

FANUC CORPORATION ANNUAL REPORT 2018

(3) Amount recognized in consolidated balance sheets at end of year
Millions of yen

Thousands of
U.S. dollars

PBO in savings-type pension plan2017
¥181,973

2018¥182,877

Fair value of plan assets(114,554)(119,429)(1,126,689)

67,41963,448598,566

PBO in non-savings-type pension plan

3,756

4,114

38,811

Net amount of liability and asset recognized inconsolidated balance sheets

71,17567,562

637,377

Net defined benefit liability

71,17567,562

637,377¥ 71,175¥ 67,562$ 637,377

Net amount of liability and asset recognized inconsolidated balance sheets(4) Components of defined benefit costThousands of
U.S. dollars

Millions of yen

Service cost2017¥ 6,2802018$1,725,255

2018¥4,692

2018$44,264

Interest cost

1,897

1,750

16,509

Expected return on plan assets(1,144)(1,202)(11,340)

Amortization of actuarial gain or loss

2,631

3,567

33,651776(116)(1,094)

Amortization of past service cost

13

13

123

¥10,453¥8,704$82,113

Other
Defined benefit cost(5) Remeasurements of defined benefit plans
The components (before adjustment of tax effect) are as follows:

Millions of yen

Past service cost

2017

¥ 91

2018

¥3,626

Thousands of
U.S. dollars

2018$34,208

Actuarial gain or loss

(1,007)

1,634

15,415

Total(¥916)¥5,260$49,623

29

(6) Remeasurements of defined benefit plans, before tax
The components (before adjustment of tax effect) are as follows:

Thousands of
U.S. dollars

Millions of yen

Unrecognized past service cost2017

¥2,05020182018(¥1,576)($14,868)

Unrecognized actuarial gain or loss

36,80535,171331,802

Total¥38,855¥33,595$316,934

2017

2018

(7) Plan assets
1) Components of plan assets
The components are as follows:
Debt securities

72%

70%

Cash and bank deposits

27%

29%

Other

1%

1%

Total

100%

100%

2) Expected rate of return on plan assets
The expected rate of return on plan assets is determined based on the current and estimatedfuture rates of return on various pension assets.
(8) Actuarial assumptions

2017

2018

Discount rate

0.5 - 4.2%

0.5 - 4.0%

Expected rate of return on plan assets

0.5 - 3.0%

0.5 - 2.8%

Expected rate of salary increase

2.3 - 4.1%

2.3 - 4.2%

2. Defined contribution pension plans
Contribution of consolidated subsidiaries to the plan was ¥865 million for fiscal year 2017, and ¥1,028
million ($9,698 thousand) for fiscal year 2018.

30

FANUC CORPORATION ANNUAL REPORT 2018

7. Leases
Future rent payments, including interest, under operating leases subsequent to March 31, 2017 and2018 are summarized as follows:2017

Due within one year

Millions of yen¥1,3272018

Thousands of
U.S. dollars

2018¥1,376$12,981Due after one year

¥1,498¥1,633$15,406

Total¥2,825¥3,009$28,387

8. Contingent liabilities
Contingent liabilities with respect to guarantees for employees’ mortgage loans with banks at March
31, 2017 and 2018 amounted to ¥36 million and ¥25 million ($236 thousand), respectively.

9. Research and development expenses
Research and development expenses charged to manufacturing costs and selling, general and administrative expenses for the years ended March 31, 2016, 2017 and 2018 are summarized as follows:
2016¥34,567

Millions of yen

2017¥42,3312018¥52,956

Thousands of
U.S. dollars

2018$499,585

10. Other income (expenses)-Other, net
Other income (expenses)-Other, net for the years ended March 31, 2016, 2017 and 2018 consistedof the following:

Dividend income
Loss on sales and disposal of fixed assets
Exchange gain or loss, net
Other, net
Total

2016
¥1,372(857)(2,090)1,338(¥ 237)

Millions of yen

2017¥1,446
(228)
517
1,512
¥3,2472018¥1,604(568)(1,107)496¥ 425

Thousands of
U.S. dollars

2018$15,132(5,358)(10,443)
4,678$ 4,009

31

11. Income taxes
Net deferred tax assets at March 31, 2017 and 2018 are summarized as follows:
Millions of yen

Deferred tax assets:
Net defined benefit liability
Unrealized profit on inventories and property, plantand equipment
Accrued expenses
Depreciation and amortization
Accrued enterprise taxes
Investment securities
Other
Gross deferred tax assets
Valuation allowance
Total deferred tax assets
Deferred tax liabilities:
Undistributed earnings of affiliated companies
Other
Total deferred tax liabilities
Net deferred tax assets

Thousands of
U.S. dollars

2017

2018

2018

¥23,380¥21,736$205,057

8,860

11,088104,604

5,567
9,233
1,350
837
13,41462,641(847)
61,794

6,502
10,478
2,007
837
12,78465,432(1,599)63,833

61,34098,84918,934
7,896
120,603617,283(15,085)
602,198(9,628)(8,798)(18,426)¥43,368(11,167)(11,908)(23,075)¥40,758(105,349)(112,340)(217,689)$384,509

Reconciliation of the statutory income tax rate to the effective income tax rate for the years ended
March 31, 2016, 2017 and 2018 was as follows:

2018

2016

2017

Tax exemption(3.1%)(5.0%)(3.0%)

Dividend income not taxable(4.4%)(4.0%)(2.3%)Tax rate difference of foreign subsidiaries(0.5%)

0.2%(0.5%)

Elimination of dividends received

4.7%

4.2%

2.4%

Equity in earnings of affiliates(1.6%)(1.8%)(2.0%)

Other

2.7%

0.5%

2.1%

30.1%

24.3%

26.9%

Japanese statutory income tax rate

Effective income tax rate

32.3%

30.2%

30.2%

12. Segment information
FANUC Group focuses on the development, production and sales of CNC systems and related application products based on FANUC’s CNC system technologies as a comprehensive supplier of factory
automation (FA) systems. Ultimately, FANUC CNC systems and the related application products areused in automated production systems.
FANUC Group uses CNCs and servo motors in all of its products. For this reason, the decision is
made, taking into consideration the status of orders, sales and production of all products, in addition
to the status of particular products.
32

FANUC CORPORATION ANNUAL REPORT 2018

As mentioned above, FANUC Group runs only one business segment based on the decision thatthe entire group makes for investment. Thus, the segment information is not stated herein.

Relevant Information
Information by product and service
Net sales: Unaffiliated customers
FA
ROBOT
ROBOMACHINESERVICE
Total

2016

¥170,211¥188,295¥183,011¥ 81,901¥623,418

Millions of yen

2017¥175,016¥190,043¥ 93,939¥ 77,944¥536,942

2018¥222,254¥227,827¥190,182¥ 86,333¥726,596

Information by region
Net sales: Unaffiliated customers
Japan
America
Europe
Asia
Other
Total

2016

¥119,228¥142,700¥ 94,017¥264,629¥ 2,844¥623,418

Millions of yen

2017¥116,598¥134,915¥ 87,449¥194,698¥ 3,282¥536,942

2018¥137,079¥144,954¥110,378¥329,523¥ 4,662¥726,596

Thousands of
U.S. dollars

2018$2,096,736$2,149,311$1,794,170$ 814,462$6,854,679

Thousands of
U.S. dollars

2018$1,293,198$1,367,491$1,041,302$3,108,708$ 43,980$6,854,679

13. Derivative transactions
Not applicable as the Group does not enter into any derivative contracts.

14. Related-party transactions
Related-party transactions for the years ended March 31, 2017 and 2018 are not presented since
they are insignificant.

33

NON-CONSOLIDATED STATEMENTS OF INCOME

Thousands of
U.S. dollars

Millions of yen

2016

2017

2018

2018

¥457,479¥399,111¥572,963$5,405,311

258,083

246,702

340,725

3,214,387

199,396

152,409232,238

2,190,924

41,35144,43057,358541,113

158,045

107,979

174,880

1,649,811

Interest income

561

559

931

8,783

Dividend income

34,87925,00421,096

199,019

Other, net(3,243)

8,191

(711)

(6,707)32,19733,754

21,316201,095

190,242

141,733

196,196

1,850,906

Current

46,98935,182

53,234502,208

Deferred

3,169(5,842)(4,702)(44,359)

50,15829,34048,532457,849¥140,084¥112,393¥147,664$1,393,057

Years ended March 31

Net sales
Cost of goods sold
Gross profit
Selling, general and administrative expenses
Operating income
Other income (expenses):

Income before income taxes
Income taxes:

Net income

Yen

Net income per share:¥ 716.46¥ 579.70

U.S. dollars¥ 761.75

Note : The U.S. dollar amounts are converted from yen, for convenience only, at the rate of ¥106 = U.S.$1.00.

34

$

7.19

FANUC CORPORATION ANNUAL REPORT 2018

NON-CONSOLIDATED BALANCE SHEETSAs of March 31
ASSETS
Current assets:
Cash and bank deposits
Receivables, trade:
Notes and accounts
Subsidiaries and affiliates
Allowance for doubtful accounts
Marketable securities
Inventories
Deferred tax assets
Other current assets
Total current assets
Investments and other assets:
Subsidiaries and affiliates
Deferred tax assets
Other
Total investments and other assets
Property, plant and equipment, at cost:
Land
Buildings
Machinery and equipment
Construction in progress
Accumulated depreciation
Property, plant and equipment, net
Intangible assets
Total assets
LIABILITIES AND NET ASSETS
Current liabilities:
Payables, trade:
Accounts
Subsidiaries and affiliates
Accrued expenses
Accrued income taxes
Warranty reserves
Other current liabilities
Total current liabilities
Long-term liabilities:
Allowance for employees' retirement benefits
Asset retirement obligations
Total long-term liabilities
NET ASSETS
Shareholders' equity:
Common stock:
Authorized - 400,000,000 shares
Issued - 204,059,017 shares
Capital surplus
Retained earnings
Treasury stock, at cost
Total shareholders’ equity
Valuation and translation adjustment:
Net unrealized holding gain on other securities
Total net assets
Total liabilities and net assets

Millions of yen

Thousands of
U.S. dollars

2017

2018

¥ 431,661¥ 398,021$ 3,754,915

33,11339,576(325)
145,000
66,71812,35525,420753,518

89,62730,717(398)
145,000
89,53914,013
23,954790,473845,538
289,783(3,755)
1,367,925
844,708
132,198
225,981
7,457,293

108,101
13,34925,116
146,566

109,868
14,51032,155
156,533

1,036,491
136,887
303,348
1,476,726

120,703308,735
168,906
18,855617,199(249,472)
367,7274,060¥1,271,871

128,640
349,245
189,045
53,094720,024(276,124)
443,900
6,478¥1,397,384

1,213,585
3,294,764
1,783,443
500,887
6,792,679(2,604,943)
4,187,736
61,113$13,182,868

¥

¥

$

25,830894
25,68919,972
2,882
3,123
78,39045,437
1,049
48,78939,0993,187
3,268
140,8292018

428,651
9,896
460,274
368,858
30,06630,8301,328,575

35,357
2,845
38,202

38,8852,669
41,554

366,840
25,179392,019

69,014
96,057
1,072,478(90,677)
1,146,872

69,014
96,057
1,128,076(91,020)
1,202,127

651,075
906,198
10,642,227(858,679)
11,340,821

8,407
1,155,279¥1,271,871

12,874
1,215,001¥1,397,384

121,453
11,462,274$13,182,868

35

Global Service Network

FANUC Global Service Network
FANUC America(Detroit)

FANUC Europe

BEIJING-FANUCSHANGHAI-FANUC Robotics

TAIWAN FANUC■ The Americas

FANUC America Corporation

Detroit, U.S.A. Tel.(1)248-377-7000
Chicago, U.S.A. Tel.(1)847-898-5000
ROBOT and ROBOT system development, manufacture, sales andservices; CNC, LASER and ROBODRILL sales and services■ Europe

FANUC Europe Corporation, S.A.

Luxembourg Tel.(352)72-7777-1
CNC, LASER, ROBOT and ROBOMACHINE sales and services;
ROBOT system development, manufacture, sales and services■ AsiaBEIJING-FANUC Mechatronics CO., LTD.

Beijing, China Tel.(86)10-6298-4726
CNC manufacture, sales and services; LASER sales and services

SHANGHAI-FANUC Robotics CO., LTD.

Shanghai, China Tel.(86)21-5032-7700
ROBOT system development, manufacture, sales and services;
ROBOT and ROBOMACHINE sales and services

KOREA FANUC CORPORATION

Changwon City, Korea Tel.(82)55-278-1200
CNC, LASER, ROBOT, ROBOT system and ROBOMACHINE sales
and services

36

TAIWAN FANUC CORPORATIONTaichung, Taiwan Tel.(886)4-2359-9101
CNC manufacture, sales and services; LASER, ROBOT and ROBOT
system sales and services

FANUC INDIA PRIVATE LIMITED

Bangalore, India Tel.(91)80-2852-0057
CNC manufacture, sales and services; ROBOT system development,
manufacture, sales and services; ROBOT and ROBOMACHINE sales
and services, LASER services

FANUC THAI LIMITED

Bangkok, Thailand Tel.(66)2-714-6111
CNC, ROBOT, ROBOT system and ROBOMACHINE sales andservices; LASER services

FANUC MECHATRONICS（MALAYSIA）SDN. BHD.

Kuala Lumpur, Malaysia Tel.(60)3-7628-0110
CNC, ROBOT, ROBOT system and ROBOMACHINE sales andservices; LASER services

PT. FANUC INDONESIA

Jakarta, Indonesia Tel.(62)21-4584-7285
CNC, ROBOT, ROBOT system and ROBOMACHINE sales andservices; LASER services

FANUC SINGAPORE PTE. LTD.

Singapore Tel.(65)6-220-3911
CNC, LASER, ROBOT and ROBOMACHINE sales and services

FANUC CORPORATION ANNUAL REPORT 2018

Hino Branch office

Nagoya Service Center
KOREA FANUC

FANUC INDIA

FANUC THAIFANUC INDONESIAFANUC SOUTH AFRICA

7

FANUC PHILIPPINES CORPORATION

Manila, Philippines Tel.(63)2-813-3155 (63)2-813-3156
CNC, LASER, ROBOT and ROBOMACHINE services

FANUC VIETNAM COMPANY LIMITED

Ho Chi Minh, Vietnam Tel.(84)28-3824-6638
CNC, LASER, ROBOT and ROBOMACHINE services

FANUC OCEANIA PTY. LIMITED

Sydney, Australia Tel.(61)2-8822-4600
CNC, LASER, ROBOT and ROBOMACHINE sales andservices■ South Africa

FANUC SOUTH AFRICA（PROPRIETARY）LIMITED

Johannesburg, South Africa Tel.(27)11-392-3610
ROBOT system development, manufacture, sales andservices; CNC, ROBOT, ROBODRILL and ROBOCUT sales
and services; LASER services

37

Web Site: https://www.fanuc.com/