Consolidated Financial Statements
USHIO INC.
Year ended March 31, 2018 with
Independent Auditor’s Report

USHIO INC. and Consolidated Subsidiaries
Consolidated Balance Sheet
As of March 31
2017
2018
2018
(Millions of yen)(Thousands of
U.S. dollars)(Note 2)
AssetsCurrent assets:
Cash and deposits (Notes 3, 12 and 19)
Notes and accounts receivable – trade(Notes 3 and 12)
Securities (Notes 12 and 13)
Merchandise and finished goods
Work in process
Raw materials and supplies
Deferred tax assets (Note 4)
Prepaid expenses and other current assets
Less: Allowance for doubtful accounts (Note 12)
Total current assets¥ 74,725¥ 63,963$ 703,360

42,255
4,851
25,717
13,624
14,9203,289
10,436(1,590)188,230

42,3498,342
28,36910,301
13,7504,789
9,577(1,110)180,334

397,740
45,666
242,066
128,245
140,444
30,964
98,234(14,974)
1,771,749

42,04554,6938,534
2,439
107,712(66,134)
41,57843,51552,8499,577
2,753
108,695(63,885)
44,809395,759
514,806
80,331
22,961
1,013,859(622,498)
391,361

Intangible assets (Note 8)

6,311

9,223

59,408Investments and other assets:
Investment securities (Notes 12 and 13)
Investments in and advances to associates
Deferred tax assets (Note 4)
Net defined benefit asset (Note 15)
Other assets
Total investments and other assets

63,789
30
555
3,780
2,989
71,144

67,909
14
1,033
30
5,075
74,062600,426286
5,228
35,58528,135
669,662¥ 307,265¥ 308,430$ 2,892,181

Property, plant and equipment, at cost:
Buildings and structures (Note 8)
Machinery, equipment and other (Note 8)
Land (Note 8)
Construction in progress (Note 8)
Less: Accumulated depreciation
Property, plant and equipment, net

Total assets2

As of March 31
2017
2018
2018
(Millions of yen)(Thousands of
U.S. dollars)(Note 2)
Liabilities and net assets
Current liabilities:
Notes and accounts payable – trade (Note 12)
Short-term loans payable (Notes 3 and 12)
Current portion of long-term loans payable(Notes 3 and 12)
Income taxes payable
Deferred tax liabilities (Note 4)
Provision for bonuses
Provision for product warranties
Provision for loss on order received
Other current liabilities
Total current liabilities¥ 21,414
6,950¥ 16,859
5,763$ 201,563
65,418

1,884
873
618
2,185
2,194
48
18,622
54,793

4,701
1,163
92
2,050
2,100
31
21,83054,592

17,742
8,226
5,824
20,566
20,659460
175,290515,754

Long-term liabilities:
Long-term loans payable (Notes 3 and 12)
Deferred tax liabilities (Note 4)
Provision for directors’ retirement benefits
Provision for directors’ stock payment
Net defined benefit liability (Note 15)
Other long-term liabilities
Total long-term liabilities

17,98910,317
335
189
2,918
5,414
37,16517,307
6,459
553
123
9,960
6,143
40,548169,324
97,1183,159
1,786
27,47350,962349,824

Net assets:
Shareholders’ equity:
Capital stock:
Authorized – 300,000,000 shares
Issued– 139,628,721 shares
Capital surplus
Retained earnings
Treasury shares, at cost
Total shareholders’ equity

19,556
27,771
163,217(17,212)
193,332

19,556
27,772
155,545(17,216)
185,658

184,076
261,400
1,536,312(162,018)
1,819,770

24,247(15)984(3,471)
21,74430,407(26)
3,135(6,529)26,987228,229(145)
9,267(32,675)
204,675229
215,306¥ 307,265

643
213,289¥ 308,430

2,155
2,026,602$ 2,892,181

Accumulated other comprehensive income:
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling interests
Total net assets (Note 17)
Total liabilities and net assets

See notes to consolidated financial statements.
3

USHIO INC. and Consolidated Subsidiaries
Consolidated Statement of Income
Years ended March 31
2017
2018
2018
(Millions of yen)(Thousands of
U.S. dollars)(Note 2)
Net sales
Cost of sales (Note 5)
Gross profit
Selling, general and administrative expenses(Notes 6 and 7)
Operating income
Other income (expenses):
Interest and dividend income
Interest expenses
Foreign exchange losses
Gain on trading securities
Gain on investments in money held in trust
Share of loss of entities accounted for using equity
methodGain on sales of investment securities, net
Loss on valuation of investment securities (Note 13)
Impairment loss (Note 8)
Extra retirement payment
Office transfer expenses (Note 9)
Business structure improvement expenses
Gain on transfer of benefit obligation relating toemployees’ pension fund (Note 1)
Gain on step acquisitions
Loss on sales of shares of subsidiaries and associates
Other, net
Profit before income taxes
Income taxes (Note 4):
Current
DeferredProfitLoss attributable to non-controlling interests
Profit attributable to owners of the parent¥ 173,497
111,350
62,146¥ 172,840
112,383
60,456$ 1,633,072
1,048,105
584,966

51,995
10,151

51,854
8,602

489,415
95,551

2,729
(608)
(926)
357
104

2,147
(308)
(649)
435
371

25,694(5,729)(8,724)
3,365
986

(19)

(8)

(187)

5,924
(181)
(1,875)
(380)
–
–

2,761
(10)
(240)
(10)
(136)
(2,089)55,765(1,707)(17,649)(3,581)
–
–

6,024
30
(176)
283
11,286
21,437

–
–
–
753
3,015
11,61756,709286(1,659)2,666
106,235
201,786

2,917
7,731
10,648
10,788(213)¥ 11,001

3,459
1,284
4,744
6,872
(170)
¥ 7,042

27,45872,776100,235
101,551(2,005)$ 103,557

See notes to consolidated financial statements.

4

USHIO INC. and Consolidated Subsidiaries
Consolidated Statement of Comprehensive Income
Years ended March 31
2017
2018
2018
(Millions of yen)(Thousands of
U.S. dollars)(Note 2)
ProfitOther comprehensive income (Note 16):
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Share of other comprehensive income of entities
accounted for using equity method
Total other comprehensive income
Comprehensive income
Comprehensive income attributable to owners of theparentComprehensive income attributable tonon-controlling interests¥ 10,788¥ 6,872$ 101,551(6,160)11(2,187)
3,057

(665)
(26)
(1,270)3,271(57,982)104(20,592)
28,781(0)(5,279)¥ 5,509(20)
1,288¥ 8,161(5)(49,695)$ 51,856¥ 5,759¥ 8,382$ 54,213

(250)

(220)

(2,356)

See notes to consolidated financial statements.

5

USHIO INC. and Consolidated Subsidiaries
Consolidated Statement of Changes in Net Assets
Shareholders’ equity

Balance as of April 1, 2016
Dividends from surplus
Profit attributable to owners of the parent
Purchase of treasury shares
Disposal of treasury shares
Purchase of shares of consolidated
subsidiaries
Capital increase of consolidated
subsidiaries
Net changes of items other thanshareholders’ equity
Balance as of March 31, 2017
Dividends from surplus
Profit attributable to owners of the parent
Purchase of treasury shares
Disposal of treasury shares
Purchase of shares of consolidated
subsidiaries
Net changes of items other thanshareholders’ equity
Balance as of March 31, 2018

Number ofshares ofcapitalstock issued(Thousands)

Capitalstock

CapitalsurplusRetainedearnings

139,628¥19,556¥27,672¥151,856(3,353)
7,042

Accumulated other comprehensive income

Treasuryshares,at cost¥(16,027)(1,201)
12

139,628

19,556¥19,556¥183,057(3,353)
7,042(1,201)
12¥31,072¥(9,800)¥ 25,647¥ 2,590

Total
net assets¥211,296(3,353)
7,042(1,201)
12
100

(0)

(0)

(0)

27,772

155,545(3,329)11,001(17,216)–
185,658(3,329)11,001
(7)
10

(1)

(1)

¥27,771–¥193,332¥163,217

Capitalstock

CapitalsurplusRetainedearnings$184,076$261,417$1,464,094(31,339)
103,557¥(17,212)(665)
30,407

Treasuryshares,at cost$(162,051)(16)$261,400

(26)
(26)

(1,240)
3,135

3,271
(6,529)1,339
26,987(1,946)643(1)(6,160)¥24,24711¥(15)(2,151)
¥ 984

3,057
¥(3,471)(5,242)¥ 21,744

(414)
¥ 229

Valuation
DeferredForeign
Total
difference on
gains orcurrency
shareholders’ available-forlosses ontranslation
equitysale securities
hedgesadjustment(Thousands of U.S. dollars) (Note 2)$1,747,537(31,339)
103,557(67)
99$286,212$(250)$ 29,515

Total
Remeasureaccumulated
ments ofother
definedcomprehensive Non-controlli
benefit plansincomeng interests$(61,457)$254,020$6,061(16)$1,536,312(607)
213,289(3,329)11,001(7)
10(5,657)¥215,306

Accumulated other comprehensive income

(67)
99

$184,076¥4,375

Total
Remeasureaccumulated
ments ofother
definedcomprehensive Non-controlli
benefit plansincomeng interests

100

Shareholders’ equity

Balance as of March 31, 2017
Dividends from surplus
Profit attributable to owners of the parent
Purchase of treasury shares
Disposal of treasury shares
Purchase of shares of consolidated
subsidiaries
Net changes of items other thanshareholders’ equity
Balance as of March 31, 2018

¥ –Foreigncurrencytranslation
adjustment

100

(7)
10

139,628

Valuation
DeferredTotal
difference on
gains orshareholders’ available-forlosses on
equitysale securities
hedges(Millions of yen)$(162,018)–$1,189,770

Total
net assets$2,007,619(31,339)
103,557
(67)
99
(16)

(57,982)$228,229

104$(145)(20,247)$ 9,267

28,781$(32,675)(49,344)$204,675(3,905)$2,155(53,250)$2,026,602

See notes to consolidated financial statements.
6

USHIO INC. and Consolidated Subsidiaries
Consolidated Statement of Cash Flows
Years ended March 31
2018
2017
2018
(Millions of yen)(Thousands of
U.S. dollars)(Note 2)
Operating activities
Profit before income taxes
Adjustments to reconcile profit before income taxes to net
cash provided by operating activities:
Depreciation
Impairment loss (Note 8)
Increase (decrease) in net defined benefit liability
Amortization of goodwill
Increase (decrease) in allowance for doubtful accounts
Business structure improvement expenses
Interest and dividends income
Interest expenses
Gain on trading securities
Share of loss of entities accounted for using equity method
Gain on sales of investment securities
Loss on valuation of investment securities (Note 13)
Increase in notes and accounts receivable – trade(Increase) decrease in inventories
Increase (decrease) in notes and accounts payable – trade
Other
SubtotalInterest and dividends received
Interest paid
Payment of business structure improvement expenses
Income taxes paid
Net cash provided by operating activities¥ 21,437¥ 11,617$ 201,786

6,790
1,875
(7,180)1,327
543–(2,729)
608
(357)
19
(5,924)181(1,223)(4,766)
4,994
2,848
18,444
2,757(586)(1,479)(3,568)15,567

6,587
240
77
1,321
(15)
2,089
(2,147)308(435)
8(2,761)
10(3,850)2,733(916)(1,007)
13,861
2,129
(301)
(609)
(2,455)
12,624

63,912
17,649(67,587)
12,492
5,116–(25,694)
5,729(3,365)
187(55,765)
1,707(11,515)(44,869)
47,011
26,812
173,608
25,959(5,523)(13,929)(33,585)
146,529

7

USHIO INC. and Consolidated Subsidiaries
Consolidated Statement of Cash Flows (continued)
Years ended March 31
2018
2017
2018
(Millions of yen)(Thousands of
U.S. dollars)(Note 2)
Investing activities
Payments into time deposits
Proceeds from withdrawal of time deposits
Payments of short-term loans receivableCollection of short-term loans receivable
Purchase of securities
Proceeds from sales and redemption of securities
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of intangible assets
Purchase of investment securities
Proceeds from sales and redemption of investment securities
Purchase of shares of subsidiaries resulting in a change inscope of consolidation
Payments for sales of shares of subsidiaries resulting in change
in scope of consolidation
Payments of long-term loans receivableCollection of long-term loans receivable
Payments for acquisition of business
Other
Net cash provided by (used in) investing activities
Financing activities
Net increase in short-term loans payable
Proceeds from long-term loans payable
Repayment of long-term loans payable
Purchase of treasury shares
Cash dividends paid
Cash dividends paid to non-controlling shareholders
Payments from purchases of shares in subsidiaries not
resulting in a change in scope of consolidation
Net cash (used in) provided by financing activities
Effect of exchange rate changes on cash and cash equivalents
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year (Note 19)(10,126)
13,902(324)
324(3,345)
8,861(4,207)2,070(642)(12,226)
10,597(15,090)
10,493(455)
401(3,197)
5,992(8,828)
1,068(825)(10,467)
6,164(95,319)
130,860(3,052)
3,056(31,487)
83,407(39,603)
19,486(6,051)(115,083)
99,749

(152)

(490)

(1,439)

(93)

–

(875)

(171)
3
(151)
5
4,322

(20)
0
–
0
(15,254)(1,617)30(1,426)51
40,684

1,177
3,916(5,358)(7)(3,329)(11)796
15,601(3,376)(1,201)(3,347)(15)

11,07836,867(50,438)(67)(31,340)(112)–(1,591)–(3,613)(1,215)
15,06150,974¥ 66,035

6,864(1,073)
3,161
47,813¥ 50,974(34,011)(11,436)
141,765
479,802$ 621,568

See notes to consolidated financial statements

8

USHIO INC. and Consolidated Subsidiaries
Notes to Consolidated Financial Statements
1.

Summary of Significant Accounting Policies(a) Basis for presentation
USHIO INC. (the “Company”) and its domestic subsidiaries maintain their accounting
records and prepare their financial statements in accordance with accounting principles
generally accepted in Japan, and its overseas subsidiaries maintain their books ofaccount in conformity with those in their respective countries of domicile.
The accompanying consolidated financial statements are prepared on the basis ofaccounting principles generally accepted in Japan, which are different in certain respects
with regard to the application and disclosure requirements from International Financial
Reporting Standards (IFRS), and have been compiled from the consolidated financial
statements prepared by the Company as required by the Financial Instruments andExchange Act of Japan.
The accompanying consolidated financial statements of the Company and its
consolidated subsidiaries (collectively, the “Group”) are prepared using the accounts offoreign consolidated subsidiaries prepared in accordance with any of the accounting
principles generally accepted in Japan, IFRS or accounting principles generally acceptedin the United States as adjusted for certain items.
For the purposes of these documents, certain reclassifications have been made to present
the accompanying consolidated financial statements in a format that is familiar toreaders outside Japan. In addition, certain reclassifications have been made to the prioryear’s consolidated financial statements to bring them into conformity with the current
year’s presentation.
As permitted by the regulations under the Financial Instruments and Exchange Act ofJapan, amounts of less than one million yen have been omitted. As a result, the totals
shown in the accompanying consolidated financial statements (in both yen and U.S.
dollars) do not necessarily agree with the sum of the individual amounts.

9

USHIO INC. and Consolidated Subsidiaries
Notes to Consolidated Financial Statements (continued)(b) Principles of consolidation and accounting for investments in associates
The accompanying consolidated financial statements include the accounts of theCompany and all subsidiaries over which it exerts substantial control either throughmajority ownership of voting shares and/or other means. As of March 31, 2018, thenumber of consolidated subsidiaries and associates accounted for using the equity method
were 58 and 1 (55 and 1 in 2017), respectively.
The changes in the scope of consolidation for the year ended March 31, 2018 are as
follows:
Due to new establishment, Ushio Entertainment Holdings, Inc., Ushio Asia Trading
Limited and CHRISTIE TRADE DEVELOPMENT (SHANGHAI) CO., LTD. were
included in the consolidation scope.
Due to acquisition of additional shares, Zylight LLC was included in the consolidation
scope and excluded from the scope of the equity method.
Due to sale of shares, Dipl.-Ing. Reinhold Eggers GmbH was excluded from theconsolidation scope.
Due to liquidation, XTREME technologies GmbH was excluded from the consolidation
scope.
The changes in the scope of equity method for the year ended March 31, 2018 are as
follows:
Due to increased materiality, KA Imaging Inc. was included in the scope of the equity
method.
Due to acquisition of additional shares, Zylight LLC was included in the consolidation
scope and excluded from the scope of the equity method.
The associate that is not accounted for using the equity method (Hokkaido Saladpaprika Co.,
Ltd.) is excluded from the scope of the equity method since such exclusion has an immaterial
effect on the Company’s consolidated financial statements in terms of profit or loss (amountcorresponding to the Company’s equity position), retained earnings (amount corresponding
to the Company’s equity position) and others, and the entity, as a whole, is not material.
The closing date of a consolidated subsidiary, USHIO (SUZHOU) CO., LTD., and 11
other consolidated subsidiaries (11 in 2017) is December 31. Their financial accounts areconsolidated using their financial statements as of the parent’s fiscal year-end, and areprepared solely for consolidation purposes. All significant intercompany balances andtransactions have been eliminated in the consolidation.
The closing dates of certain entities accounted for using the equity method are different
from the consolidated balance sheet date. In preparing the consolidated financial statements,
the Company uses the financial statements pertaining to each company’s fiscal year.

10

USHIO INC. and Consolidated Subsidiaries
Notes to Consolidated Financial Statements (continued)
Shares of associates (companies over which the Company exercises significant influence)are stated at cost plus equity in their undistributed earnings or losses. Consolidated profit
includes the Company’s equity in the current profits or losses of such companies after theelimination of unrealized intercompany profits.
All assets and liabilities of the consolidated subsidiaries and associates are revalued on
acquisition, if applicable. Goodwill is amortized in equal portions over the period inwhich it is deemed to be valuable.
(c) Foreign currency translation
The balance sheet accounts of the foreign consolidated subsidiaries are translated into
yen at the rates of exchange in effect at the balance sheet date, except for the components
of net assets excluding non-controlling interests which are translated at their historicalexchange rates. Revenue and expense accounts are translated at the average rate ofexchange in effect during the year. Differences arising from the translation are presented
as foreign currency translation adjustment and non-controlling interests in the
consolidated financial statements.
All monetary assets and liabilities of the Company and its domestic consolidated
subsidiaries denominated in foreign currencies are translated at the current exchange rates
in effect at each balance sheet date. Gains or losses resulting from the settlement of these
items are credited or charged to income.
(d) Cash equivalents
All highly liquid investments, generally with a maturity of three months or less whenpurchased, which are readily convertible into known amounts of cash and are so near
maturity that they represent only an insignificant risk of any change in value attributable
to changes in interest rates, are considered cash equivalents.
(e) Securities and investment securities
Trading securities are carried at fair value, and held-to-maturity securities are carried atamortized cost. Marketable securities classified as available-for-sale securities are carriedat fair value with any valuation difference, net of the applicable income taxes, included
directly in net assets. Non-marketable securities classified as available-for-sale securities
are carried at cost. The cost of securities sold is determined by the moving-averagemethod. In cases where available-for-sale securities have declined significantly in value
and such devaluation is not deemed temporary, those securities are written down to thefair value and the resulting losses are included in net profit or loss for the period.

11

USHIO INC. and Consolidated Subsidiaries
Notes to Consolidated Financial Statements (continued)(f) Inventories
Merchandise and finished goods, and work in process are stated principally at the lowerof cost or market, cost being determined by the average method for the Company and its
domestic consolidated subsidiaries and at the lower of cost or market, cost being
determined by the first-in, first-out method for overseas consolidated subsidiaries.
Raw materials are principally stated at the lower of cost or market, cost being determinedby the moving-average method for the Company and its domestic consolidated
subsidiaries and at the lower of cost or market, cost being determined by the first-in,
first-out method for overseas consolidated subsidiaries.
(g) Depreciation (excluding leased assets)
Depreciation of property, plant and equipment is calculated principally by thestraight-line method based on the estimated useful lives of the respective assets.
The depreciation period ranges from 2 years to 60 years for buildings and structures and3 years to 12 years for machinery and equipment, and vehicles. The others are generally
depreciated from 2 years to 15 years.
Intangible assets are amortized by the straight-line method.
In addition, an estimated useful period for amortization for software for internal use is 5
years.
(h) Leased assets
Leased assets related to finance lease transactions that transfer ownership mainly consistof software of the Company’s consolidated subsidiaries and are depreciated by the same
approach as the depreciation method applied to non-current assets.
Leased assets related to finance lease transactions that do not transfer ownership mainly
consist of production facilities (machinery) and inspection instruments (tools and equipment)of the Company’s consolidated subsidiaries and are depreciated by the straight-line method
over the lease period that is deemed as the useful life, assuming no residual value.
(i) Research and development expenses
Research and development expenses are charged to income when incurred.
(j) Allowance for doubtful accounts
The allowance for doubtful accounts is provided at an amount sufficient to cover possible
losses on the collection of receivables, and has been determined based on historicalexperience with write-offs plus an estimated amount for probable specific doubtful
accounts after a review of the collectability of individual receivables.
12

USHIO INC. and Consolidated Subsidiaries
Notes to Consolidated Financial Statements (continued)(k) Provision for bonuses
The provision for bonuses represents the amounts for future payments of employees’
bonuses. The provision is recognized in the amount that is expected to be paid.
(l) Provision for directors’ retirement benefits
Some of the consolidated subsidiaries recognize provision for retirement benefits for
directors, corporate auditors and others in the full amount that would have to be paid if all the
directors and corporate auditors resigned at the balance sheet date based on their internal
regulations.
(m) Provision for directors’ stock payment
Provision for directors’ stock payment represents the amounts for future payments of theCompany’s stock to directors. The provision is recognized based on the amount that is
expected to be paid, which is determined using points allocated to each director asprescribed in the share granting rules.
(n) Provision for product warranties
Provision for product warranties is recognized for expenses for after-sales service andfree repairs for products sold by the Company and its consolidated subsidiaries in theestimated amount to be incurred in the future.
(o) Provision for loss on orders received
To provide for future losses on contracted orders received, the Company recognizes aprovision for loss on orders received equal to the amount of losses it anticipates after the
year-end. Such a provision is recognized when losses on orders received are probable andreasonably estimated.
(p) Retirement benefits(i) Method for attribution of estimated retirement benefits to periods
In the calculation of retirement benefit obligations, the expected retirement benefits are
attributed to the period up to the end of the current fiscal year based on the straight-line
method.
(ii) Accounting method for actuarial gains or losses and past service costs
Past service costs are amortized as incurred by the straight-line method over a certain
hiperiod (15 years) that is within the average remaining years of service of the eligible
employees when the gains or losses occur.
Actuarial gains or losses are amortized in the year following the year in which the gains orlosses are recognized by the straight-line method over a certain period (15 years) that iswithin the average remaining years of service of the eligible employees when the gains orlosses occur.
13

USHIO INC. and Consolidated Subsidiaries
Notes to Consolidated Financial Statements (continued)(q) Derivatives and hedge accounting
The Company and certain consolidated subsidiaries have entered into currency derivativetransactions and interest rate swap transactions primarily in order to manage certain risks
arising from adverse fluctuations in foreign currency exchange rates and interest rates.
In accordance with the accounting standard for financial instruments, derivative financial
instruments are carried at fair value with any changes in unrealized gains or losses
charged or credited to income, except for those that meet the criteria for deferral hedge
accounting under which unrealized gains or losses are deferred as assets or liabilities.
Certain domestic consolidated subsidiaries apply the assignment for the currency
derivative transactions that qualify for the method to the hedges of foreign currency riskthat is qualified for the treatment.
Hedging instruments and hedged items used by the Company and certain consolidated
subsidiaries are as follows:
Hedging instruments: Forward foreign exchange contracts and interest rate swaps
Hedged items:
Receivables and payables denominated in foreign currencies,
forecasted transactions denominated in foreign currencies,
securities denominated in foreign currencies and loans payable
The Company and its consolidated subsidiaries hedge the risks of fluctuation in foreign
currencies and interest rates in accordance with internal management rules on financial
market risk and derivative transactions.
The hedge effectiveness is assessed by comparing the cumulative changes in fair value orcash flows of the hedged items and those of the hedging instruments during the period
from the inception of the hedge to the time of determining the effectiveness, and basedon the respective amount of changes.
(r) Deferred income taxes
Deferred tax assets and liabilities are recognized in the consolidated financial statementswith respect to the differences between the carrying amounts of assets and liabilities forfinancial reporting purposes and the amounts for income tax purposes, and are measured
using the enacted tax rates and laws that will be in effect when the differences are
expected to reverse.

14

USHIO INC. and Consolidated Subsidiaries
Notes to Consolidated Financial Statements (continued)(s) Accounting standards issued but not yet applied
Revenue from Contracts with Customers (Accounting Standard Update (“ASU”) No.
2014-09, issued on May 28, 2014)(1)Overview
ASU No. 2014-09 provides a comprehensive standard for revenue recognition which
replaces the existing revenue recognition guidance under U.S. generally accepted
accounting principles (GAAP) issued by the Financial Accounting Standard Board(FASB). The core principle of this standard is that an entity should recognize revenue
when the entity transfers promised goods or services to customers at an amount thatreflects the consideration to which the entity expects to be entitled in exchange forthose goods or services. The adoption of this standard will have an impact on certain
overseas consolidated subsidiaries that adopt U.S. GAAP.
(2)Date of application
ASU 2014-09 will be applied for fiscal years beginning on or after April 1, 2019.
(3)Impact of application
The impact of this standard on the consolidated financial statements is currently
being evaluated.

15

USHIO INC. and Consolidated Subsidiaries
Notes to Consolidated Financial Statements (continued)
Accounting Standard for Revenue Recognition (Accounting Standards Board of Japan(ASBJ) Statement No. 29, issued on March 30, 2018)
Implementation Guidance on Accounting Standard for Revenue Recognition (ASBJ
Guidance No. 30, issued on March 30, 2018)(1)Overview
International Accounting Standards Board (IASB) and FASB jointly developed acomprehensive accounting standard for revenue recognition and issued “Revenue
from Contracts with Customers” (IFRS No. 15, issued by IASB and Topic 606
issued by FASB) in May 2014. Considering the situation that IFRS No. 15 has
become applicable from the fiscal year beginning on and after January 1, 2018 andTopic 606 from the fiscal year beginning after December 15, 2017, ASBJ developed
a comprehensive accounting standard for revenue recognition and issued it together
with implementation guidance.
ASBJ’s basic policy in developing the accounting standard for revenue recognition
was to establish accounting standards as a starting point to adopt basic principles of
IFRS No. 15 from the viewpoint of comparability of financial statements, which isone of the benefits of maintaining consistency with IFRS No. 15, and to add
alternative treatments to the extent not to impair comparability in cases whereprevious practices and others in Japan should be considered.
(2)Date of application
These standards will be applied from the start of the fiscal year beginning on or after
April 1, 2021.
(3) Impact of application
The impact of applying the “Accounting Standard for Revenue Recognition,” etc. on
the consolidated financial statements is currently being evaluated.
(t) Changes in presentation
Consolidated statement of cash flows“Increase (decrease) in allowance for doubtful accounts,” which was included in “other”
under “cash flows from operating activities” for the year ended March 31, 2017, has beenpresented separately from the year ended March 31, 2018, since the significance of theamount has increased. To reflect this change in the method of presentation, the amount in the
consolidated financial statements for the year ended March 31, 2017 has been reclassified.
As a result, ¥(681) million presented in “other” under “cash flows from operating
activities” in the consolidated statement of cash flows for the year ended March 31, 2017has been reclassified to ¥(15) million of “increase (decrease) in allowance for doubtful
accounts” and ¥(665) million of “other.”
16

USHIO INC. and Consolidated Subsidiaries
Notes to Consolidated Financial Statements (continued)(u) Additional information
Stock Remuneration Plan for Directors
The Company has introduced a stock remuneration plan for directors of the Company(excluding outside directors) and executive officers who have entered into an engagementagreement with the Company (excluding overseas residents, hereinafter “Directors, etc.”), in
order to raise the incentive to contribute to improving the Company’s medium- to long-termbusiness performance and to increasing enterprise value.
(1) Overview
The Company entrusts money equivalent to remuneration of Directors, etc. The
Company’s shares will be acquired using the entrusted money and the Company’s
shares and the cash equivalent of the conversion value of the Company’s shares will
be delivered and paid to Directors, etc., based on his or her position and the degree ofaccomplishment of business performance. Directors, etc., are eligible to receive theCompany’s shares and the cash equivalent of the conversion value of the Company’s
shares, in principle after retiring from the position of Director, etc. In order tomaintain neutrality toward management of the Company, the voting rights of theCompany’s shares in the trust may not be exercised during the trust period.
(2) The Company’s shares in the trust
The Company’s shares in the trust were recorded as treasury shares in shareholders’equity on the consolidated balance sheets with the carrying value in the trust(excluding ancillary expenses). The carrying value and number of treasury shares inthe trust were ¥484 million ($4,562 thousand) and 292,700 shares as of March 31,2018 and ¥495 million and 299,100 shares as of March 31, 2017, respectively.
Accounting Treatment of Retirement Benefits
Following the enforcement of the Defined-Benefit Corporate Pension Act, the Company
received approval from the Minister of Health, Labour and Welfare on April 1, 2016 forthe waiver of future payment obligations and on May 1, 2017 for the return of the benefit
obligations related to past employee service for a substitutional portion of the USHIO
INC. welfare pension fund, of which the Company was a member. The impact on the
consolidated statement of income for the year ended March 31, 2018 was ¥6,024 million($56,709 thousand), which was presented in “other income (expenses).”2.

U.S. Dollar Amounts

For the readers’ convenience, the accompanying consolidated financial statements withrespect to the year ended March 31, 2018 have been presented in U.S. dollars by translating
all yen amounts at ¥106.24 = U.S. $1.00, the exchange rate prevailing on March 31, 2018.
This translation should not be construed as a representation that the yen amounts have been,
could have been, or could in the future be converted into U.S. dollars at the above or any
other rate.
17

USHIO INC. and Consolidated Subsidiaries
Notes to Consolidated Financial Statements (continued)
3.

Short-Term Loans Payable and Long-Term Loans Payable

Short-term loans payable consisted mainly of unsecured and secured loans payable to banks
at interest rates ranging from 0.30% to 12.00% and from 0.30% to 12.00% per annum at
March 31, 2018 and 2017, respectively.
Long-term loans payable at March 31, 2018 and 2017 consisted of the following:
2018
2017
(Millions of yen)
The Company:
Loans from banks, due through 2019at a rate of 0.45%
Consolidated subsidiaries:
Loans from banks, due through 2021
at rates ranging from 0.80% to 2.78%
Total long-term loans payable
Less: Current portion

2018(Thousands of
U.S. dollars)¥ 2,325¥ 2,325$ 21,884

17,54819,873(1,884)¥17,989

19,68322,008(4,701)¥17,307

165,182
187,067(17,742)$169,324

The assets pledged as collateral for loans payable as of March 31, 2018 were as follows:

Cash and deposits
Notes and accounts receivable – trade(Millions of yen)
¥ 14
127
¥ 141

(Thousands of
U.S. dollars)
$ 134
1,201
$ 1,335

The related loans payable for which the above assets were pledged as collateral as of March
31, 2018 is summarized as follows:

Short-term loans payable(Millions of yen)
¥ 400
¥ 400

(Thousands of
U.S. dollars)$ 3,765$ 3,765

The aggregate annual maturities of long-term loans payable subsequent to March 31, 2018 aresummarized as follows:
Years ending March 31
2019
2020
2021
2022
2023 and thereafter
Total(Millions of yen)
¥ 1,884
7,984
5,843
4,161
－
¥ 19,873(Thousands of
U.S. dollars)$ 17,742
75,15555,00039,168－$ 187,067

18

USHIO INC. and Consolidated Subsidiaries
Notes to Consolidated Financial Statements (continued)
4.

Income Taxes

Income taxes applicable to the Company and its domestic consolidated subsidiaries
comprised corporation taxes, inhabitants’ taxes and enterprise taxes, which resulted in an
aggregate statutory tax rate of approximately 30.9% for the year ended March 31, 2018 (fiscal
year ended March 31, 2017: 30.9%). Income taxes of the overseas consolidated subsidiaries
are based, in general, on the tax rates applicable in their respective countries of incorporation.
The significant components of deferred tax assets and liabilities as of March 31, 2018 and2017 are summarized as follows:
2017
2018
(Millions of yen)

Deferred tax assets:
Allowance for doubtful accounts
Provision for bonuses
Provision for product warranties
Net defined benefit liability
Provision and accrual for directors’ retirement benefits
Loss on valuation of inventories
Impairment loss
Loss on liquidation of businessNet losses carried forward
Deferred revenue
Other
Total gross deferred tax assets
Valuation allowance
Total deferred tax assets

Deferred tax liabilities:
Valuation difference on available-for-sale securities
Gain on contribution of securities to retirement benefit
trust
Depreciation
Retained earnings of subsidiaries and associates
Other
Total deferred tax liabilities
Net deferred tax assets (liabilities)

480
634
174
707
259
1,410
803
－
3,601
1,521
2,302
11,895(6,211)
5,684¥(10,898)(13,468)(102,583)

(561)
(553)
(607)
(155)
(12,775)¥ (7,091)

(1)
(962)
(86)
(316)
(14,834)¥ (729)(5,283)(5,208)(5,719)(1,460)120,255(45,424)

¥

273
594
182
4,006
349
1,410
1,087
3,526
4,497
2,073
1,746
19,749(5,644)
14,104

2018(Thousandsof U.S.
dollars)
$

$

4,521
5,973
1,638
6,659
2,438
13,273
7,565－
33,897
14,325
21,674
111,968(58,462)
53,505

19

USHIO INC. and Consolidated Subsidiaries
Notes to Consolidated Financial Statements (continued)
A reconciliation between the statutory tax rate and the effective tax rates as a percentage of
profit before income taxes for the years ended March 31, 2018 and 2017 is summarized asfollows:
Statutory tax rate
Reconciliation:
Increase (decrease) in valuation allowance for deferred tax
assets
Non-taxable income for income tax purposes
Non-deductible expenses for income tax purposesTax deductions related to R&D activities
Different tax rates applied to overseas subsidiaries
Amortization of goodwill
Share of loss of entities accounted for using equity method
Retained earnings of subsidiaries and associates
Decrease of deferred tax assets at fiscal year-end by thechange of tax rate
Other
Effective tax rates

5.

2018
30.9%

2017
30.9%

6.6

17.0

(0.6)
0.7
(2.1)
(2.0)
1.7
(0.0)
10.5

(1.3)
1.0
(3.1)
(6.4)
3.1
0.0
1.2

3.7

－

0.4
49.7%

(1.5)
40.8%

Loss on Valuation of Inventories

The ending inventory balance is the amount after write-down of book value due to decline inprofitability, and the loss on valuation of inventories included in cost of sales for the years
ended March 31, 2018 and 2017 was as follows:
2017
2018
(Millions of yen)
Loss on valuation of inventories

6.

¥ 984

¥ 535

2018
(Thousands of
U.S. dollars)$ 9,268

Selling, General and Administrative Expenses

The main components of selling, general and administrative expenses for the years ended
March 31, 2018 and 2017 were as follows:
2017
2018
(Millions of yen)
Salaries and wages
Provision for bonuses
Retirement benefit expenses
Provision for directors’ retirement benefits
Provision for directors’ stock payment
Research and development expenses
Provision of allowance for doubtful accounts¥ 13,951
716
642
69
77
10,675399¥ 14,190
818
841
48
32
9,812
17

2018
(Thousands of
U.S. dollars)$ 131,317
6,740
6,046
658
724
100,4813,760

20

USHIO INC. and Consolidated Subsidiaries
Notes to Consolidated Financial Statements (continued)
7. Research and Development Expenses
Research and development expenses included in general and administrative expenses for theyears ended March 31, 2018 and 2017 were as follows:
2017
2018
(Millions of yen)
Research and development expenses

8.

¥ 10,675

2018(Thousands of
U.S. dollars)$ 100,481¥ 9,812

Impairment Loss

For the year ended March 31, 2018, the Group recognized impairment loss on the following
asset groups:

Location
Indiana, U.S.A.

Classificationby useBusiness assets

Tennessee, U.S.A.
Kawasaki, Kanagawa
and others

Business assets
Business assets

Kanzaki, Hyogo
Osaka, Osaka

Business assets
Business assets

Amagasaki, Hyogo

Business assets

Osaka, Osaka

Business assets

Type of assets
Intangible assets,
Goodwill
Intangible assets
Buildings and structures,
Machinery, equipment
and other, Constructionin progress, Intangible
assets and other
Buildings and structures
Machinery, equipment
and other, Constructionin progress, Intangible
assets and otherMachinery, equipment
and other
Buildings and structures,Land and other(Millions ofyen)¥ 1,007(Thousands of
U.S. dollars)$9,479

416
141

3,916
1,334

135
79

1,273
746

49

463

46

434

In principle, the Group’s business assets are grouped according to division or to whom assets
are lent, and the Group’s idle assets are grouped on an individual asset basis.
For idle assets that are not used for business, the book values of the group assets whose fairvalues fall significantly are written down to their recoverable amounts or zero, and thesewrite-downs are recorded as impairment loss under other expenses.
Business assets whose carrying amount may not be recoverable are written down to theirrecoverable amounts, and these write-downs are recognized as impairment loss under otherexpenses.

21

USHIO INC. and Consolidated Subsidiaries
Notes to Consolidated Financial Statements (continued)
Breakdown of impairment loss by location is as follows:
Impairment loss of ¥1,007 million ($9,479thousand) recognized for Indiana, U.S.A. includes¥761 million ($7,170thousand) for intangible assets and ¥245 million ($2,308thousand) for
goodwill.
Impairment loss of ¥416 million ($3,916thousand) recognized for Tennessee, U.S.A. is forintangible assets.
Impairment loss of ¥141 million ($1,334thousand) recognized for Kawasaki, Kanagawa andothers includes ¥6 million ($60thousand) for buildings and structures, ¥7 million($73thousand) for machinery, equipment and other, ¥48 million ($459thousand) for
construction in progress, ¥65 million ($612thousand) for other and ¥13 million($128thousand) for intangible assets.
Impairment loss of ¥135 million ($1,273thousand) recognized for Kanzaki, Hyogo is forbuildings and structures.
Impairment loss of ¥79 million ($746thousand) recognized for Osaka, Osaka includes ¥10
million ($101thousand) for machinery, equipment and other, ¥3 million ($37thousand) for
construction in progress, ¥33 million ($313thousand) for other and ¥31 million($295thousand) for intangible assets.
Impairment loss of ¥49 million ($463thousand) recognized for Amagasaki, Hyogo includes¥49 million ($461thousand) for machinery, equipment and other and ¥0 million ($1thousand)for other.
Impairment loss of ¥46 million ($434thousand) recognized for Osaka, Osaka includes ¥23
million ($225thousand) for buildings and structures, ¥13 million ($130thousand) for land and¥8 million ($78thousand) for other.
For the year ended March 31, 2017, the Group recognized impairment loss on the following
asset groups:

Location
Gotemba, Shizuoka

Classificationby useBusiness assets

Chiyoda-ku, Tokyo

Business assets

Takasago, Hyogo

Business assets

Type of assets
Machinery, equipment
and other and Intangible
assets
Machinery, equipment
and other and Goodwill
Buildings and structures(Millions of yen)
¥ 85

77
55

In principle, the Group’s business assets are grouped according to division or to whom assets
are lent, and the Group’s idle assets are grouped on an individual asset basis.
For idle assets that are not used for business, the book values of the group assets whose fair
22

USHIO INC. and Consolidated Subsidiaries
Notes to Consolidated Financial Statements (continued)
values fall significantly are written down to their recoverable amounts or zero, and thesewrite-downs are recorded as impairment loss under other expenses.
Business assets whose carrying amount may not be recoverable are written down to theirrecoverable amounts, and these write-downs are recognized as impairment loss under otherexpenses.
Breakdown of impairment loss by location is as follows:
Impairment loss of ¥85 million recognized for Gotemba, Shizuoka includes ¥23 million formachinery, equipment and other, and ¥61 million for intangible assets.
Impairment loss of ¥77 million recognized for Chiyoda-ku, Tokyo includes ¥31 million formachinery, equipment and other, and ¥45 million for goodwill.
Impairment loss of ¥55 million recognized for Takasago, Hyogo is for buildings andstructures.
9.

Office Transfer Expenses

No office transfer expenses were recorded for the year ended March 31, 2018. Office transfer
expenses of ¥136 million were recorded for the year ended March 31, 2017, due to relocationof Ushio Opto Semiconductors, Inc. to Gotemba.
10. Business Structure Improvement Expenses
No business structure improvement expenses were recorded for the year ended March 31,
2018. Business structure improvement expenses were incurred in implementing the businessstructure improvement to maintain and improve the profitability of the Company’s businesses.
In this connection, the Company recorded additional retirement expenses due to the special
early retirement schemes in the amount of ¥1,479 million and expenses for personnel
downsizing, etc., due to the restructuring of CHRISTIE Group in the amount of ¥609 million
for the year ended March 31, 2017.
11. Leases
Future minimum lease payments under operating leases, which are lease transactions otherthan finance leases for the year ended March 31, 2018, are summarized as follows:

Due within one year
Due after one year
Total

2018

2017

(Millions of yen)
¥ 1,372
2,710¥ 4,083(Millions of yen)
¥ 1,265
2,504¥ 3,770

2018(Thousands of
U.S. dollars)$ 12,923
25,511$ 38,434

23

USHIO INC. and Consolidated Subsidiaries
Notes to Consolidated Financial Statements (continued)
12. Financial Instruments(1) The Group’s policy to manage financial instruments
a. Basic policy on treating financial instruments
The Group invests floating money and funds reserved for future business expansion
mainly in highly safe financial assets, according to the Group’s cash management plan.
Financing instruments are determined based upon the use of funds and financing
environment. The Group utilizes derivative transactions only to avoid foreign exchange
rate fluctuation risk and interest rate fluctuation risk, and does not use them for tradingor speculative purposes.
b. The nature and risk of financial instruments
Notes and accounts receivable – trade, which are operating receivables, are exposed tocustomer credit risk. Operating receivables denominated in foreign currencies are also
exposed to foreign exchange risk which is hedged by using forward foreign exchange
contracts.
Securities and investment securities consist mainly of equity securities issued bycompanies with a business relationship and marketable equity or bond securities held forthe purpose of short-term investment of floating money and reserved funds. Investments
in money held in trust is also held for the purpose of investment of reserved funds. These
investments are exposed to market risk. A part of securities, investment securities, andinvestments in money held in trust are denominated in foreign currency, and they are
exposed to foreign exchange risk; however, such risk is hedged by using forward foreignexchange contracts.
Notes and accounts payable – trade, which are operating payables, are mostly due within
one year. Some of them are denominated in foreign currencies and exposed to foreignexchange risk; however, such risk is hedged by using forward foreign exchange
contracts.
Short-term and long-term loans payable, which are made to obtain working capital, aremostly due within three years after the end of the current fiscal year. Floating-rate loans
payable are exposed to interest rate risk. Certain long-term floating-rate loans payable
are hedged by using interest rate swaps.
As for derivative transactions, forward foreign exchange contracts and currency swaps
are entered into for the purpose of hedging foreign exchange risk deriving fromoperating receivables and payables denominated in foreign currencies, loans payable
denominated in foreign currencies and securities denominated in foreign currencies. In
addition, interest rate swaps are entered into for the purpose of hedging interest rate
fluctuation risk deriving from interest payments for loans payable.

24

USHIO INC. and Consolidated Subsidiaries
Notes to Consolidated Financial Statements (continued)c. Risk management structure regarding financial instruments
Credit risk –– The Company and its consolidated subsidiaries manage the customer
credit risk for operating receivables in accordance with the internal regulations for credit
exposure management as follows: the creditability of each customer is reviewed bymonitoring the status of each customer on a daily and continuous basis; the due dates
and balances are managed for each customer; and the credit line is periodicallyexamined and reviewed.
The credit risk associated with bond securities is immaterial since the Group invests inbond securities with high credit ratings.
Derivative transactions are entered into only with highly rated financial institutions inorder to mitigate counterparty risk.
As of the fiscal year-end, the maximum credit risk amount is presented as theconsolidated balance sheet amounts of financial assets that are exposed to credit risk.
Market risk –– The Company and some consolidated subsidiaries utilize forward foreignexchange contracts and currency swaps for foreign exchange risk identified by currency
and by month in relation to operating receivables and payables denominated in foreign
currencies, loans payable denominated in foreign currencies and securities denominatedin foreign currencies in accordance with the internal rules for market risk management.
For securities and investment securities, market prices and the financial position of theissuers are periodically monitored and reported to directors in charge in accordance with
the internal rules for market risk management. In addition, the holding status of sharesissued by companies with business relationships is continuously reviewed inconsideration of the relationships with those companies.
Derivative transactions are reported to directors in charge on a daily basis as well as to
the Board of Directors in accordance with the internal rules for derivative transactions
that define the authorization policy and limits of transactions. Consolidated subsidiaries
have the internal rules equivalent to the rules of the Company,
Liquidity risk –– Liquidity risk of the Company and its consolidated subsidiaries ismanaged by the Finance and Treasury Departments, preparing and updating the cash
management plan based upon reports from each department as well as by maintaining
certain liquidity.

25

USHIO INC. and Consolidated Subsidiaries
Notes to Consolidated Financial Statements (continued)(2) Fair value of financial instruments
The table below presents the amounts of financial instruments recorded in the
consolidated balance sheet and their fair values as of March 31, 2018 and 2017, as wellas their differences. Financial instruments whose fair values cannot be reliably
determined are not included.
(Millions of yen)
As of March 31, 2018
(1) Cash and deposits(2) Notes and accounts receivable – trade
Allowance for doubtful accounts (*1)(3) Securities and investment securities
Trading securities
Available-for-sale securities(4) Investments in money held in trust
Assets, total(1) Notes and accounts payable – trade(2) Short-term loans payable(3) Current portion of long-term loans payable(4) Long-term loans payable
Liabilities, total
Derivative transactions (*2)
for which hedge accounting is not applied
for which hedge accounting is applied

Consolidatedbalance sheet
amount¥74,725
42,255(1,586)
40,669Fair value¥74,725

Difference¥–

40,669–2,329
64,015
2,322¥184,061¥21,414
6,950
1,884
17,989¥48,2382,329
64,015
2,322¥184,061¥21,414
6,950
1,891
17,837¥48,093

–
–
–
¥ –
¥ –
–
6
(151)
¥(144)

¥89
(22)

¥89
(22)

¥

–
–

(*1): The deducted amount includes general and specific allowance for doubtful
accounts relating to notes and accounts receivable – trade.
(*2): Assets and liabilities from derivative transactions are stated in the net amount. The
figures in parentheses indicate net liabilities.

26

USHIO INC. and Consolidated Subsidiaries
Notes to Consolidated Financial Statements (continued)(Millions of yen)
As of March 31, 2017
(1) Cash and deposits(2) Notes and accounts receivable – trade
Allowance for doubtful accounts (*1)(3) Securities and investment securities
Trading securities
Available-for-sale securities(4) Investments in money held in trust
Assets, total(1) Notes and accounts payable – trade(2) Short-term loans payable(3) Current portion of long-term loans payable(4) Long-term loans payable
Liabilities, total
Derivative transactions (*2)
for which hedge accounting is not applied
for which hedge accounting is applied

Consolidatedbalance sheet
amount¥63,963
42,349(1,085)41,264

Fair value¥63,963

Difference¥–

41,264–

2,587
71,142
2,322¥181,280¥16,859
5,763
4,701
17,307¥44,632

2,587
71,142
2,322¥181,280¥16,859
5,763
4,769
17,942¥45,335

–
–
–
¥ –
¥ –
–
68
634
¥703

¥(4)
(26)

¥(4)
(26)

¥

–
–

(*1): The deducted amount includes general and specific allowance for doubtful
accounts relating to notes and accounts receivable – trade.
(*2): Assets and liabilities from derivative transactions are stated in the net amount. The
figures in parentheses indicate net liabilities.

27

USHIO INC. and Consolidated Subsidiaries
Notes to Consolidated Financial Statements (continued)(Thousands of U.S. dollars)
As of March 31, 2018
(1) Cash and deposits(2) Notes and accounts receivable – trade
Allowance for doubtful accounts (*1)(3) Securities and investment securities
Trading securities
Available-for-sale securities(4) Investments in money held in trust
Assets, total(1) Notes and accounts payable – trade(2) Short-term loans payable(3) Current portion of long-term loans payable(4) Long-term loans payable
Liabilities, total
Derivative transactions (*2)
for which hedge accounting is not applied
for which hedge accounting is applied

Consolidatedbalance sheet
amount$ 703,360
397,740(14,934)
382,805

Fair value

Difference$ 703,360$ －382,805－

21,925602,552
21,861$ 1,732,505$ 201,563
65,41817,742
169,324$ 454,049

21,925602,552
21,861$ 1,732,505$ 201,563
65,41817,801
167,902$ 452,686

－
－
－
$ －
$ －
－
59
(1,421)$ (1,362)

$ 840

$ 840

$ －

(210)

(210)

－

(*1): The deducted amount includes general and specific allowance for doubtful
accounts relating to notes and accounts receivable – trade.
(*2): Assets and liabilities from derivative transactions are stated in the net amount. The
figures in parentheses indicate net liabilities.
The method of fair value measurement is described as follows:
Assets(1) Cash and deposits and (2) Notes and accounts receivable – trade
The fair value of these accounts approximates their book value because they aresettled in a short period of time. Thus, the book value is presented as their fair value.
(3) Securities and investment securities
The fair value of equity securities is based on market prices at the stock exchange, andthat of bond securities is obtained from financial institutions.
(4) Investments in money held in trust
The fair value is based upon the price obtained from financial institutions.
Liabilities(1) Notes and accounts payable – trade and (2) Short-term loans payable
The fair value of these accounts approximates their book value because they aresettled in a short period of time. Thus, the book value is presented as their fair value.
(3) Current portion of long-term loans payable and (4) Long-term loans payable
The fair value of long-term loans payable is measured by discounting the total ofprincipal and interest at an assumed rate for similar new borrowings.
28

USHIO INC. and Consolidated Subsidiaries
Notes to Consolidated Financial Statements (continued)
Derivative transactions
The fair value is measured based upon the prices obtained from financial institutions.
As of March 31, 2018 and 2017, the consolidated balance sheet includes the following
financial instruments whose fair values cannot be reliably determined:
2017

2018

(Millions of yen)
Unlisted shares and investments in business
partnerships with limited liability

2018(Thousands of
U.S. dollars)¥2,536¥2,326$21,901(3) Redemption schedule
The redemption schedule for securities with maturity dates classified as available-for-salesecurities as of March 31, 2018 and 2017 is summarized as follows:
As of March 31, 2018
Due
withinone year

Due after Due after
one year five years
and up to and up to
five years ten years

Due after
ten years(Millions of yen)
Notes and accounts
receivable – trade
Bonds:
Corporate bonds
Total

Due
withinone year

Due after Due after
one year five years
and up to and up to
five years ten years

Due after
ten years(Thousands of U.S. dollars)–¥41,881

¥374

¥

1,650
¥43,531

2,843¥3,218212¥212– $ 394,211$ 3,528$

9,316
15,537¥9,316 $ 409,748

26,768$ 30,297

2,000$ 2,000

¥

–

$

–

87,695$ 87,695

As of March 31, 2017
Due
withinone year

Due after
one yearand up to
five years

Due after
five years
and up to Due after
ten years ten years(Millions of yen)
Notes and accounts
receivable – trade
Bonds:
Corporate bonds
Total

–

¥41,788

¥560

¥

4,949
¥46,7375,373¥5,934

448
¥448

¥

–

7,180
¥7,180Cash and deposits are due within one year. The redemption schedule for long-term loans
payable is stated in Note 3.

29

USHIO INC. and Consolidated Subsidiaries
Notes to Consolidated Financial Statements (continued)
13. Securities and Investment Securities(1) Trading securities
Trading securities as of March 31, 2018 and 2017 are summarized as follows:
As of March 31, 2018
Carrying
Carrying
value
Gain
value
Gain
(Millions of yen)(Thousands of U.S. dollars)¥2,329¥290$21,925$2,730

As of March 31, 2017
Carrying
value
Loss(Millions of yen)
¥2,587¥156(2) Marketable available-for-sale securities
Marketable available-for-sale securities as of March 31, 2018 and 2017 are summarized
as follows:
Carrying
value
Securities whose carrying value
exceeds their acquisition costs:(1) Shares(2) Bonds:
Corporate bonds(3) Other
Subtotal
Securities whose carrying value does
not exceed their acquisition costs:(1) Shares(2) Bonds:
Corporate bonds(3) Other
Subtotal
Total

As of March 31, 2018
Acquisition Unrealized Carrying Acquisition Unrealized
costgain (loss)
value
cost
gain (loss)(Millions of yen)(Thousands of U.S. dollars)¥43,461¥ 7,619¥35,841$409,088$ 71,721$337,366

479
985
44,927

462
951
9,033

17
34
35,8934,516
9,279
422,884

4,353
8,955
85,030163
324
337,853

1,990

2,049

(59)

18,737

19,295(557)

17,097

17,971(874)

160,930

169,158(8,228)19,087¥64,015

20,021¥29,054(933)¥34,960

179,667$602,552

188,454$273,484(8,786)$329,067–––

As of March 31, 2017
Carrying
Acquisition Unrealized
value
cost
gain (loss)(Millions of yen)
Securities whose carrying value
exceeds their acquisition costs:(1) Shares(2) Bonds:
Corporate bonds(3) Other
Subtotal
Securities whose carrying value does
not exceed their acquisition costs:(1) Shares(2) Bonds:
Corporate bonds(3) Other
Subtotal
Total¥51,411¥7,522¥43,889

5,266
1,383
58,061

5,203
1,019
13,74562364
44,316

345

400

(54)

12,520215
13,080¥71,142

12,900223
13,523¥27,268

(380)
(7)
(442)
¥43,873

30

USHIO INC. and Consolidated Subsidiaries
Notes to Consolidated Financial Statements (continued)(3) Available-for-sale securities sold
Available-for-sale securities sold during the years ended March 31, 2018 and 2017 aresummarized as follows:
2017
2018
(Millions of yen)

2018
(Thousands of
U.S. dollars)

Sales of securities(1) Shares(2) Bonds(3) Other¥6,962
1,814
640¥4,491
113
698$ 65,535
17,075
6,028

5,792
9
189

2,627
4
137

54,526
87
1,779

61
–
5

–
–
7

575
–
52

Aggregate gains on sales(1) Shares(2) Bonds(3) Other

Aggregate losses on sales(1) Shares(2) Bonds(3) Other(4) Impairment loss recognized on securities
Impairment losses amounted to ¥181 million ($1,707thousand) and ¥10 million arerecognized in shares classified as available-for-sale securities for the years ended March
31, 2018 and 2017, respectively. Impairment loss is recognized when the average market
value for the month ended on the balance sheet date falls to less than half of the carrying
amounts at the end of the fiscal year. Except in cases in which the market value isrecoverable, losses are also recorded when the decline in value is between 30% and 50%of the carrying amounts considering the recoverability.

31

USHIO INC. and Consolidated Subsidiaries
Notes to Consolidated Financial Statements (continued)
14. Derivative Transactions
The notional amounts and the estimated fair value of the derivative positions outstanding at
March 31, 2018 and 2017 are summarized below.
(1) Derivative transactions for which hedge accounting is not applied
Currency-related transactions:Notional
amounts
Bilateral transactions:
Forward foreign exchange contracts:
Sell:
EUR
Buy:
USD
JPY
Currency swaps:
Receive JPY/ Pay USD
Total

As of March 31, 2018
Maturing
after one
Estimated
year
fair value(Millions of yen)

¥ 293

¥ 147

¥ (28)¥ (28)

719
665

–
–

(22)
8

(22)
8

3,070
¥4,7493,070¥3,218

131
¥89

131
¥89

As of March 31, 2018
Maturing
Notional
after one
Estimatedamounts
year
fair value(Thousands of U.S. dollars)
Bilateral transactions:
Forward foreign exchange contracts:
Sell:
EUR
Buy:
USD
JPY
Currency swaps:
Receive JPY/ Pay USD
Total

Unrealized
gain (loss)$ 2,760$ 1,392$ (270)$ (270)

6,771
6,264

–
–

(209)
83

(209)
83

28,905$44,702

28,905$30,297

1,235
$840

1,235
$840

Notional
amounts
Bilateral transactions:
Forward foreign exchange contracts:
Sell:
EUR
Buy:
USD
JPY
Currency swaps:
Receive JPY/ Pay USD
Total

Unrealized
gain (loss)

As of March 31, 2017
Maturing
after one
Estimated
year
fair value(Millions of yen)

Unrealized
loss

¥ 463

¥309

¥19

¥19

387
774

–
–

(1)
(23)

(1)
(23)

3,070
¥4,6973,070¥3,380

300
¥295

300
¥295

32

USHIO INC. and Consolidated Subsidiaries
Notes to Consolidated Financial Statements (continued)(2) Derivative transactions for which hedge accounting is applied
Interest-rate-related transactions:
As of March 31, 2018
Maturing
Maturing
Notional
after
Estimated Notional
after
Estimated
Hedged item amounts one year fair value amounts one year fair value(Millions of yen)(Thousands of U.S. dollars)
Derivative transactions
for which deferral
accounting is applied:Interest rate swaps:
Receive floating/Long-term
Pay fixed
loans payable
Total¥3,450¥3,450¥3,450¥3,450

¥(22)
¥(22)

$32,473$32,473$32,473$32,473$(210)$(210)

As of March 31, 2017
Maturing
Notional
after
Estimated
Hedged item amounts one year fair value(Millions of yen)
Derivative transactions
for which deferral
accounting is applied:Interest rate swaps:
Receive floating/Long-term
Pay fixed
loans payable
Total¥3,450¥3,450¥3,450¥3,450

¥(26)
¥(26)

33

USHIO INC. and Consolidated Subsidiaries
Notes to Consolidated Financial Statements (continued)
15. Retirement Benefit Plans(1) Overview of retirement benefit plan adopted by the Company
To prepare for the payment of employees’ retirement benefits, the Company and its
consolidated subsidiaries adopted funded and unfunded defined benefit plans as well as adefined contribution plan.
Under the defined benefit corporate pension plans, all of which are funded, the Company
provides lump-sum or pension benefits based on salaries and length of service. In addition,
retirement benefit trusts are set up for said corporate pension plans of the Company.
Under the lump-sum retirement benefit plans, which are principally unfunded and partially
funded as a result of the setup of retirement benefit trusts, the Company provides lump-sum
benefits based on salaries and length of service.
Under the defined benefit corporate pension plans and the lump-sum retirement benefit plansfor certain consolidated subsidiaries, net defined benefit liability and retirement benefit
expenses are calculated by the simplified method.
The Company received approval from the Minister of Health, Labour and Welfare on April 1,2016 for the waiver of future payment obligations and on May 1, 2017 for the return of thebenefit obligations related to past employee service for a substitutional portion of the welfare
pension fund.

34

USHIO INC. and Consolidated Subsidiaries
Notes to Consolidated Financial Statements (continued)(2) Defined benefit plana. Reconciliation between retirement benefit obligations at beginning of period and endof period
2018
2017(Millions of yen)
Retirement benefit obligation at beginning of
periodCurrent service costs
Interest costs
Actuarial gains and losses arising during
periodRetirement benefits paid
Past service costs
Reduction amount associated with transfer
of benefit obligation relating toemployees’ pension fund
Other
Effect of exchange rate changes
Retirement benefit obligation at end of period

2018(Thousands of
U.S. dollars)¥ 37,701
1,016
214¥ 40,760
1,102
301$ 354,869
9,563
2,020

619
(1,177)(53)(9,667)(1,697)(694)(2,075)–

5,830(11,080)(501)(90,999)–(23)¥ 28,62912(8)¥ 37,701–(218)$ 269,483

b. Reconciliation between plan assets at beginning of period and end of period(excluding plans to which simplified method is applied stated in (3))
2018
2017
(Millions of yen)
Plan assets at beginning of period
Expected return on plan assets
Actuarial gains and losses arising during
periodContributions from employer
Retirement benefits paid
Effect of exchange rate changes
Plan assets at end of period

2018(Thousands of
U.S. dollars)¥ 28,310
303¥ 26,350
473$ 266,477
2,854

742
1,907
(1,131)(22)¥ 30,109

(274)
2,285
(508)
(15)
¥ 28,310

6,986
17,950(10,648)(213)$ 283,407

35

USHIO INC. and Consolidated Subsidiaries
Notes to Consolidated Financial Statements (continued)
c. Reconciliation between net defined benefit liabilities for plans to which simplified
method is applied at beginning of period and end of period
2018
2017
(Millions of yen)
Net defined benefit liability at beginning of
periodRetirement benefit expenses
Retirement benefits paid
Contribution to plans
Other
Effect of exchange rate changes
Net defined benefit liability at end of period

¥ 539
176
(53)
(18)
(28)
1
¥ 617

2018
(Thousands of
U.S. dollars)

¥ 512
126
(55)
(19)
(22)
(3)
¥ 539

$ 5,077
1,663
(504)
(173)
(268)
17
$ 5,811d. Reconciliation between retirement benefit obligation and plan assets at end of period
and defined benefit liability and defined benefit asset for retirement recognized on
the consolidated balance sheet
As of
As of
March 31,
March 31,2018
2017
(Millions of yen)
Retirement benefit obligation for funded plans
Plan assets
Retirement benefit obligation for unfundedplans
Net balance of liability and asset recognizedon the consolidated balance sheet
Net defined benefit liability
Net defined benefit asset
Net balance of liability and asset recognizedon the consolidated balance sheet

As ofMarch 31,2018
(Thousands of
U.S. dollars)¥ 28,629(30,109)(1,479)¥ 37,701(28,310)9,390$ 269,483(283,407)(13,923)

617

539

5,811

(861)

9,930

(8,111)

2,918(3,780)

9,960
(30)

27,473(35,585)¥ (861)¥ 9,930$ (8,111)

36

USHIO INC. and Consolidated Subsidiaries
Notes to Consolidated Financial Statements (continued)e.

Retirement benefit expenses and their breakdown
2018
2017
(Millions of yen)
Current service costs
Interest costs
Expected return on plan assets
Amortization of actuarial gains and losses
Amortization of past service costs
Employees’ contribution
Other
Retirement benefit expenses applying
simplified method
Retirement benefit expenses under defined
benefit plans

2018(Thousands of
U.S. dollars)¥ 1,016
214
(303)
646
(7)
–
(80)

¥ 1,102
301
(473)
1,401
(157)
(14)
(137)

$ 9,5632,020(2,854)
6,087
(66)
–
(756)

176

126

1,663

¥ 1,663¥ 2,149$15,656

f. Remeasurements of defined benefit plans
The breakdown of the amount recognized in remeasurements of defined benefit plans(before tax) in the consolidated statement of comprehensive income is as follows:
2018
2017
(Millions of yen)
Past service costs
Actuarial gains and losses
Total¥ 1,878(6,288)¥ (4,409)¥(1,917)(2,825)¥(4,743)

2018(Thousands of
U.S. dollars)$ 17,686(59,188)$ (41,502)

g. Accumulated remeasurements of defined benefit plans
The breakdown of the amount recognized in accumulated remeasurements of defined
benefit plans (before tax) on the consolidated balance sheet is as follows:
As of
As of
March 31,
March 31,2018
2017
(Millions of yen)
Unrecognized past service costs
Unrecognized actuarial gains and losses
Total¥ (179)5,162¥4,983¥(2,058)
11,451¥9,393

As ofMarch 31,2018
(Thousands of
U.S. dollars)$ (1,684)
48,596$ 46,911

37

USHIO INC. and Consolidated Subsidiaries
Notes to Consolidated Financial Statements (continued)h. Plan assets(i) Breakdown of plan assets
Percentage of each main category to total plan assets is as follows:

Bonds
Securities
Cash and deposits
Alternative investments (Note 1)
Advance payment of the minimum policy reserve
Other
Total (Note 2)

As ofMarch 31,
2018

As of
March 31,
2017

27%
14
5
17
27
10
100%

24%
14
7
17
29
9
100%

Notes 1. Alternative investments mainly consist of investment to hedge funds.
2. Total plan assets include retirement benefit trusts of 6% and 5% thatare set up for a corporate pension plan as of March 31, 2018 and2017, respectively.
(ii) Determination of expected long-term rate of return on plan assets
In determining the expected long-term rate of return on plan assets, theCompany takes into consideration the current and future plan asset allocation as
well as the current and expected long-term rate of return on various asset
categories comprising plan assets.
i. Actuarial assumptions
Actuarial assumptions at end of period:
Discount rateLong-term expected rate of return:Expected rate of salary increase

2018

2017

0.6~0.7%
1.5%
3.0%

0.6~1.0%
2.0%
1.6~4.9%(3) Defined contribution plan
The required contribution to the defined contribution plan amounts to ¥586 million($5,517thousand) and ¥735 million for the years ended March 31, 2018 and 2017,
respectively.

38

USHIO INC. and Consolidated Subsidiaries
Notes to Consolidated Financial Statements (continued)
16. Other Comprehensive Income
Reclassification adjustments and income tax effect allocated to each component of othercomprehensive income for the years ended March 31, 2018 and 2017 were as follows:
2017
2018
(Millions of yen)
Valuation difference on available-for-sale securities:
Amount arising during the year
Reclassification adjustments
Amount before income tax effect
Income tax effect
Valuation difference on available-for-sale securities

2,012(3,009)
(906)
241
(665)

$(25,772)
56,846(82,619)
24,636(57,982)

0
4
4
6
11

(26)
–
(26)
–
(26)

1
–
39
–
104

Foreign currency translation adjustment:
Amount arising during the year
Reclassification adjustments
Amount before income tax effect
Income tax effectForeign currency translation adjustment(2,962)774(2,187)－(2,187)(1,270)–(1,270)–(1,270)(27,881)–(20,592)–(20,592)

Remeasurements of defined benefit plans:
Amount arising during the year
Reclassification adjustments
Amount before income tax effect
Income tax effectRemeasurements of defined benefit plans

172
4,236
4,409
(1,351)
3,057

3,498
1,244
4,743
(1,472)
3,271

1,626
39,87541,502(12,720)
28,781

(0)
–

(20)
–

(5)
–

(0)
¥ (5,279)(20)¥1,288(5)$ (49,695)

Deferred gains (losses) on hedges:
Amount arising during the year
Reclassification adjustments
Amount before income tax effect
Income tax effect
Deferred gains (losses) on hedges

Share of other comprehensive income of entities
accounted for using equity method:Amount arising during the year
Reclassification adjustments
Share of other comprehensive income of entities
accounted for using equity method
Total other comprehensive income¥(2,738)(6,039)(8,777)
2,617(6,160)¥2018(Thousands of
U.S. dollars)

39

USHIO INC. and Consolidated Subsidiaries
Notes to Consolidated Financial Statements (continued)
17. Net Assets
Information regarding changes in net assets for the years ended March 31, 2018 and 2017 is
as follows:a.

Shares issued and outstanding/Treasury shares

For the year ended March 31, 2018
Number of

Number ofshares as ofTypes of shares

April 1, 2017

shares as of
Increase

Decrease

March 31, 2018

(Shares)
Shares issued:
Common shares………………………

139,628,721––

139,628,721

11,867,972

4,721

6,400

11,866,293

Treasury shares:
Common shares (Note)………………

Note: Details of increase and decrease are as follows:(Shares)

Increase due to purchase of shares of less than standard unit

4,721

Decrease due to issuance from trust to eligible person according to stock remuneration for

6,400

directors

For the year ended March 31, 2017
Number of

Number ofshares as ofTypes of shares

April 1, 2016

shares as of
Increase

Decrease

March 31, 2017

(Shares)
Shares issued:
Common shares………………………

139,628,721––

139,628,721

10,954,280

921,192

7,500

11,867,972

Treasury shares:
Common shares (Note)………………

Note: Details of increase and decrease are as follows:
Increase due to market purchase of shares(Shares)918,200

Increase due to purchase of shares of less than standard unit

2,992

Decrease due to issuance from trust to eligible person according to stock remuneration for

7,500

directors

40

USHIO INC. and Consolidated Subsidiaries
Notes to Consolidated Financial Statements (continued)b.

Dividends

1) Dividends paid
For the year ended March 31, 2018

Resolution

Type of

Total

Total

Dividends

Dividends

Cut-off

Effective

sharesdividends

dividends

per shareper share

date

date

(Millions(Thousands

(Yen)

(U.S.

March 31,

June 30,

2017

2017

of yen)of U.S.

dollars)

dollars)
Annual general meeting

Commonof the shareholders

shares¥3,329$ 31,339¥26$ 0.24

on June 29, 2017

For the year ended March 31, 2017

Resolution

Type of

Total

Dividends

Cut-off

Effective

sharesdividends

per share

date

date

(Millions(Yen)
March 31,

June 30,

2016

2016

of yen)Annual general meeting

Commonof the shareholders

shares¥3,353¥26

on June 29, 2016

2) Dividends with the cut-off date in the year ended March 31, 2018 and the effective date in the year
ending March 31, 2019

Resolution

Type of

Total

Total

Source ofDividends

Dividends

Cut-off

Effective

sharesdividends

dividends

dividends

per shareper share

date

date

(Yen)

(U.S.

(Millions (Thousands ofAnnual general meeting

Commonof the shareholders on

sharesof yen)U.S. dollars)¥3,329$ 31,338

dollars)
Retainedearnings¥26$ 0.24

March 31, June 29,
2018

2018

June 28, 201841

USHIO INC. and Consolidated Subsidiaries
Notes to Consolidated Financial Statements (continued)
18. Amounts per Share
The amounts per share of basic earnings and net assets, presented below, are based on theweighted-average number of shares of common shares outstanding during each year and thenumber of shares of common shares outstanding at each balance sheet date, respectively.
2018

2017

2018
(U.S. dollars)¥ 55.06
1,664.40$ 0.81
15.85(Yen)
Basic earnings
Net assets¥ 86.11
1,683.42

Per share amounts assuming full dilution have not been presented because no potential
dilutive shares were outstanding as of March 31, 2018 or 2017.
The Company’s shares held by the trust for the stock remuneration plan for directors arerecorded as treasury shares in shareholders’ equity which are deducted from the total numberof shares issued at the balance sheet date for the purpose of calculating net assets per share(292,700 shares and 299,100 shares as of March 31, 2018 and 2017, respectively).
The Company’s shares held by the trust for the stock remuneration plan for directors arerecorded as treasury shares in shareholders’ equity which are deducted from theweighted-average number of shares outstanding during the year for the purpose of calculating
the basic earnings per share (294,522 shares and 301,235 shares for the years ended March 31,2018 and 2017, respectively).
19. Supplementary Cash Flow Information
The following table presents a reconciliation of cash and deposits with cash and cash
equivalents as of March 31, 2018 and 2017.
2017
2018
(Millions of yen)
Cash and deposits
Time deposits with a maturity of more than threemonthsMoney management funds and others included insecurities
Cash and cash equivalents

2018(Thousands of
U.S. dollars)¥ 74,725¥ 63,963$ 703,360(8,689)(13,003)(81,791)－¥ 66,035

14¥ 50,974－$ 621,568

42

USHIO INC. and Consolidated Subsidiaries
Notes to Consolidated Financial Statements (continued)
20. Segment Information(1) Summary of reportable segments
The Company defines a reportable segment as a component of the Company for which
discrete financial information is available and whose operating results are regularly reviewed
by the Board of Directors to assess its business performance and make decisions about
resources to be allocated to the segment.
The Company has a division system based on product type and similarity in sales market, etc.,
and each division develops and implements comprehensive domestic and overseas strategies
for its development, manufacturing and sales of products and service, and engages in its
business activities globally.
Thus, reportable segments of the Company are divided into two categories based on producttype and sales market.
“Light sources business” conducts manufacturing and sales of halogen lamps and discharge
lamps, etc.
“Equipment business” conducts manufacturing and sales of visual image equipment andoptical equipment, etc.
(2) The basis of measurement of net sales, income or loss, assets, liabilities, and other itemsby the reportable segment is generally consistent with the significant accounting policiesof the Group. Segment income presents the operating income of the segment.
Intersegment sales and transfers are recognized based on the market price.

43

USHIO INC. and Consolidated Subsidiaries
Notes to Consolidated Financial Statements (continued)(3) Information about net sales, segment income or loss, assets, liabilities and other items byreportable segment
Year ended March 31, 2018
Reportable segment

Net sales
Sales to externalcustomers
Intersegment sales
or transfers
Total
Segment income(loss)
Segment assets
Other items:
Depreciation
Amortization of
goodwill
Investment inassociates underequity method
Increase inproperty, plantand equipment
and intangible
assets(Note 4)

Otherbusinesses(Note 1)
Total
(Millions of yen)

Eliminations
orunallocatedamounts(Note 2)

Amounts on
consolidated
financialstatements(Note 3)Light
sourcesbusiness

Equipment
business

Total¥72,412¥97,656¥170,068¥3,428¥173,497¥ －¥173,497

1,891

60

1,951

35

1,987

(1,987)－¥74,303¥97,716¥172,020¥3,464¥175,485¥(1,987)¥173,497¥10,402¥(509)¥9,893¥129¥10,022¥129¥10,151

110,645

112,207

222,853

46,953269,806

37,458307,265

3,128

3,613

6,741

48

6,790

－

6,790

540

787

1,327

－

1,327

－

1,327

－

30

30

－

30

－

30

2,329

1,973

4,302

955

5,258

－

5,258

Notes 1. “Other businesses” represents business segments including industrial machinery and others, which are notclassified in either reportable segment.
2. Eliminations or unallocated amounts of segment income (loss), amounting to ¥129 million, include elimination ofintersegment transactions totaling ¥163 million. Eliminations or unallocated amounts of segment assets, amounting
to ¥37,458 million, include elimination of intersegment receivables and payables totaling ¥(12,762) million andunallocated corporate assets totaling ¥50,527 million that consists primarily of surplus funds (cash and securities)
and long-term investments (investment securities), etc.
3. Segment income (loss) is adjusted to operating income on the consolidated statement of income.
4. The increase in long-term prepaid expense is included in increases in property, plant and equipment and intangible
assets.

44

USHIO INC. and Consolidated Subsidiaries
Notes to Consolidated Financial Statements (continued)
Year ended March 31, 2017

Total

Eliminations
orunallocatedamounts(Note 2)

Amounts on
consolidated
financialstatements(Note 3)

¥172,840¥ －¥172,840

Reportable segment

Net sales
Sales to externalcustomers
Intersegment sales
or transfers
Total
Segment income
Segment assets
Other items:
Depreciation
Amortization of
goodwill
Investment inassociates underequity method
Increase inproperty, plantand equipment
and intangible
assets(Note 4)Lightsourcesbusiness

Equipment
business

Total¥71,901¥97,640¥169,541

Otherbusinesses(Note 1)
(Millions of yen)

¥3,298

2,144

194

2,338

9

2,348

(2,348)－¥74,046¥97,834¥171,880¥3,307¥175,188¥(2,348)¥172,840¥8,119104,983¥74
121,348¥8,193
226,331¥41
43,565¥8,235
269,897¥366
38,533¥8,602
308,430

2,498

4,045

6,544

43

6,587

－

6,587

527

793

1,321

－

1,321

－

1,321

14

－

14

－

14

－

14

4,971

4,203

9,174

1,565

10,740－10,740Notes 1. “Other businesses” represents business segments including industrial machinery and others, which are notclassified in either reportable segment.
2. Eliminations or unallocated amounts of segment income, amounting to ¥366 million, include elimination ofintersegment transactions totaling ¥161 million. Eliminations or unallocated amounts of segment assets, amounting
to ¥38,533 million, include elimination of intersegment receivables and payables totaling ¥(16,233) million andunallocated corporate assets totaling ¥54,889 million that consists primarily of surplus funds (cash and securities)
and long-term investments (investment securities), etc.
3. Segment income is adjusted to operating income on the consolidated statement of income.
4. The increase in long-term prepaid expense is included in increases in property, plant and equipment and intangible
assets.

45

USHIO INC. and Consolidated Subsidiaries
Notes to Consolidated Financial Statements (continued)
Year ended March 31, 2018
Reportable segment
Light sources Equipment
businessbusiness
Net sales
Sales to externalcustomers
Intersegment sales
or transfers
Total
Segment income(loss)
Segment assets
Other items:
Depreciation
Amortization of
goodwill
Investment inassociates underequity method
Increase inproperty, plantand equipment
and intangible
assets(Note 4)

Otherbusinesses
Total(Note 1)
Total
(Thousands of U.S. dollars)Eliminations
orunallocatedamounts(Note 2)

Amounts on
consolidated
financialstatements(Note 3)$681,589$919,207$1,600,797$32,275$1,633,072$－$1,633,072

17,806566

18,372338

18,710(18,710)－$699,395$919,774$1,619,169$32,613$1,651,783(18,710)$1,633,072$ 97,918$ (4,799)$93,119$ 1,214$ 94,334$ 1,217$ 95,551

1,041,467

1,056,171

2,097,638

441,958

2,539,597

352,583

2,892,181

29,44834,011

63,459453

63,912－

63,912

5,083

7,408

12,492－

12,492－

12,492

－

286

286

－

286

－

286

21,926

18,57440,5008,993

49,493－49,493

Notes 1. “Other businesses” represents business segments including industrial machinery and others, which are notclassified in either reportable segment.
2. Eliminations or unallocated amounts of segment income (loss), amounting to $1,217thousand, include eliminationof intersegment transactions totaling $1,541thousand. Eliminations or unallocated amounts of segment assets,
amounting to $352,583thousand, include elimination of intersegment receivables and payables totaling$(120,124)thousand and unallocated corporate assets totaling $475,593thousand that consists primarily of surplus
funds (cash and securities) and long-term investments (investment securities), etc.
3. Segment income (loss) is adjusted to operating income on the consolidated statement of income.
4. The increase in long-term prepaid expense is included in increases in property, plant and equipment and intangible
assets.

46

USHIO INC. and Consolidated Subsidiaries
Notes to Consolidated Financial Statements (continued)(4) Other segment information
Year ended March 31, 2018
Reportable segment
Light sources Equipment
Total
businessbusiness

Otherbusinesses

Total

Eliminations
orunallocatedamounts

Amounts on
consolidated
financialstatements(Millions of yen)
Impairment loss
Goodwill:
Amortized for theyear
Balance¥ 1,267¥ 607¥ 1,875¥–¥ 1,875¥–¥ 1,875

540
955

787
1,403

1,327
2,358

–
–

1,327
2,358

–
–

1,327
2,358

Year ended March 31, 2017
Reportable segment
Light sources Equipment
Total
businessbusiness

Otherbusinesses

Total

Amounts on
Eliminations consolidated
or unallocatedfinancialamountsstatements(Millions of yen)
Impairment loss

¥ 56

¥ 184

¥ 240

¥–

¥ 240

¥–

¥ 240

Goodwill:
Amortized for theyear
Balance

527
1,581

793
2,207

1,321
3,788

–
–

1,321
3,788

–
–

1,321
3,788

Year ended March 31, 2018
Reportable segment
Other
Light sources Equipment
Total
businesses
Totalbusinessbusiness(Thousands of U.S. dollars)
Impairment loss
Goodwill:
Amortized for theyear
BalanceEliminations
orunallocatedamounts

Amounts on
consolidated
financialstatements$ 11,934$ 5,714$ 17,649$－$ 17,649$－$ 17,649

5,083
8,995

7,408
13,20812,492
22,204－－

12,492
22,204－－

12,492
22,20447

USHIO INC. and Consolidated Subsidiaries
Notes to Consolidated Financial Statements (continued)(5) Related information
Information about net sales and property, plant and equipment by geographical area
Year ended March 31, 2018
(Millions of yen/Thousands of U.S. dollars)
Japan
Net sales

North America

EuropeU.S.A.

Other¥ 44,837¥ 3,041$ 337,723 $ 422,042$ 28,628¥ 35,879

Asia¥ 17,930

Other

China

Other

areas

¥ 41,806¥ 27,779¥ 2,221

Total¥ 173,497$ 168,771 $ 393,512 $ 261,482 $ 20,910 $ 1,633,072

Year ended March 31, 2017
(Millions of yen)Japan
Net sales¥ 35,153

North America

EuropeU.S.A.

Other¥ 46,155¥ 2,608

Asia¥ 16,368

Other

China

Other

areas

¥ 39,281¥ 31,525¥ 1,748

Total¥ 172,840

Year ended March 31, 2018
(Millions of yen/Thousands of U.S. dollars)
Japan
Property, plantand equipment

North America
U.S.A.

EuropeCanada

Asia

Other
areas

Total

¥ 26,954¥ 7,240¥ 2,637¥ 1,469¥ 3,253¥ 21¥ 41,578$ 253,714$ 68,152$ 24,826$ 13,834$ 30,628$ 205$ 391,361

Year ended March 31, 2017
(Millions of yen)Japan
Property, plantand equipment¥ 28,504

North America
U.S.A.
¥ 8,330

Canada¥ 3,089

Europe¥ 1,332

Asia¥ 3,519

Other areas
¥ 33

Total
¥ 44,809

Information by product and service is omitted since the same information is already disclosedin (3) above.
Information about transactions with major customers is omitted since there is no externalcustomer with a sales amount of 10% or more of the Group’s net sales.

21. Related Party Information
For the years ended March 31, 2018 and 2017, there were no related party transactions.
*****48