Fuji Electric Report Financials

2016Consolidated Financial Highlights
Thousands of
U.S. dollars*1

Millions of yen

Years ended March 31

2012

2013

2014

2015

2016

2016

Operating Results
Net sales
Japan
Overseas
Operating income
Profit attributable to owners of parent¥703,534
525,096
178,437
19,252
11,801¥745,781
567,314
178,466
21,992
26,368¥759,911
582,223
177,688
33,136
19,582¥810,678
605,763
204,915
39,31627,978¥813,550
597,757
215,793
45,00630,644$7,263,843
5,337,123
1,926,720
401,842
273,611

R&D and Capital Investment
R&D expenditures
Plant and equipment investment*2
Depreciation and amortization*3¥ 32,247
24,98929,755¥ 31,160
31,771
31,054¥ 32,029
26,91630,849¥ 35,023
29,041
33,615¥ 35,949
27,65029,723$   320,973
246,883
265,390

Cash Flows
Cash flows from operating activities
Cash flows from investing activities
Free cash flow
Cash flows from financing activities¥ 28,314(13,489)
14,825(32,593)¥ 55,342(24,286)
31,055(56,827)¥ 53,651(9,649)44,002(50,570)¥ 51,459(22,750)
28,708(33,827)¥ 48,450(19,410)29,040(31,567)$   432,594(173,304)
259,290(281,844)

Financial Position
Total assets
Total net assets
Shareholders’ equity
Net interest-bearing debt
Interest-bearing debt

¥792,848
183,217
163,576
191,603
255,865¥765,563
215,672
194,572
187,029
226,717¥810,774
251,225
227,181
166,092
199,504¥904,522
319,636
290,339
159,330
191,225¥845,378
260,980
230,399
153,905
184,744$7,548,021
2,330,182
2,057,134
1,374,161
1,649,507

2.7
7.4
1.5
20.6
1.2
1.6

2.9
14.7
3.4
25.4
1.0
1.2

4.4
9.3
2.5
28.0
0.7
0.9

4.8
10.8
3.3
32.1
0.5
0.7

5.5
11.8
3.5
27.3
0.7
0.8

—
—
—
—
—
—

Per Share Data
Net income
Net assets
Cash dividends¥ 16.52228.91
4.00¥ 36.90272.295.00¥ 27.41317.96
7.00¥ 39.16406.399.00¥ 42.90322.5210.00$0.3832.880
0.089

OthersEmployees
Japan
Overseas

24,973
17,933
7,040

24,956
18,271
6,685

25,74017,814
7,926

26,50817,635
8,873

—
—
—

Financial Indicators
Ratio of operating income to net sales (%)
ROE (Return on equity) (%)
ROA (Return on assets) (%)
Equity ratio (%)
Net debt-equity ratio (times)*4
Debt-equity ratio (times)*5

Yen

U.S. dollars*1

Headcount

25,52418,022
7,502*1 The U.S. dollar amounts represent the arithmetic results of translating yen into dollars at ¥112=U.S.$1, the approximate exchange rate at March 31, 2016.
*2 Plant and equipment investment is the total of investment in tangible fixed assets, including acquisition amounts for lease contracts.
*3 Depreciation and amortization expense is the total of the depreciation of tangible fixed assets and amortization of intangible assets.
*4 Net debt-equity ratio: Net interest-bearing debt (interest-bearing debt – cash and cash equivalents) / Net assets*5 Debt-equity ratio: Interest-bearing debt / Net assets

Contents
Consolidated Financial Highlights.................................................... 01
Management’s Discussion and Analysis.......................................... 02
Consolidated Balance Sheets.......................................................... 09
Consolidated Statements of Income................................................ 11
Consolidated Statements of Comprehensive Income....................... 12
Consolidated Statements of Changes in Net Assets........................ 13
Consolidated Statements of Cash Flows......................................... 14
Notes to the Consolidated Financial Statements.............................. 15
Independent Auditor’s Report.......................................................... 38

01 Fuji Electric Report Financials 2016

Management’s Discussion and Analysis
Overview

Selling, general and administrative expenses increased
2.1%, to ¥165,308 million. Selling, general and administrative
expenses as a percentage of net sales rose 0.3 percentage
point, to 20.3%.
Operating income grew ¥5,690 million from the previous
fiscal year, to ¥45,006 million, on cost reductions and otherimprovements in the cost structure.

During fiscal 2015, the year ended March 31, 2016, although
the operating environment for Fuji Electric showed an underlying tone of recovery in the major markets of the United Statesand Europe, a sense of slowing economies in China and other
Asian countries became stronger. In Japan, with an increasingly
unclear outlook for overseas markets there was weakness insome areas through the second half of the year, but an overall
trend of gradual recovery continued.
Against this backdrop, and as per our basic policies forfiscal 2015 of “completing the FY2015 Medium-Term
Management Plan” and “advancing growth strategies in
preparation for the next medium-term management plan,”
we worked to expand the businesses in the Power and Social
Infrastructure, Industrial Infrastructure, and Power Electronics
segments, and the overseas operations, while at the sametime further enhancing our earnings strength.

Non-Operating Income (Expenses) and Ordinary Income
Non-operating income (net) was ¥608 million, a ¥3,215 billion
decline from the ¥3,823 million recorded in the previous fiscal
year. This included a ¥495 million increase in dividend income
and a ¥415 million decrease in interest expenses, but also aturnaround to a net ¥860 million of foreign exchange losses
from the previous fiscal year net ¥3,666 million of foreignexchange income.
As a result, ordinary income grew ¥2,475 million from theprevious fiscal year, to ¥45,614 million.
Extraordinary Income (Loss), Income Before Income Taxes
and Minority Interests
Extraordinary income totaled ¥3,340 million, and included again on sales of noncurrent assets and gain on sales of investment securities. This represented a ¥4,363 million decrease
from the previous fiscal year, in the absence of the gain onchange in equity recorded in the previous fiscal year.
Extraordinary loss totaled ¥2,387 million, and included aloss on disposal of noncurrent assets, a loss on devaluation of
investment securities, an impairment loss, a settlement package,
and a loss on liquidation of subsidiaries. This was ¥2,736
million lower than in the previous fiscal year, mainly from a
reduction in the impairment loss recorded.

Financial Performance
Net Sales
Net sales for fiscal 2015 rose 0.4% from the previous fiscal year,to ¥813,550 million. Domestic net sales declined 1.3%, to¥597,757 million, while overseas net sales grew 5.3%, to¥215,792 million.
Cost of Sales, Selling, General and Administrative
Expenses, and Operating Income
The cost of sales declined 1.0% from the previous fiscal year,to ¥603,236 million, and the cost of sales to net sales ratio
decreased 1.1 percentage points, to 74.1%.

Net Sales /Ratio of Overseas Sales to Net Sales(Billions of yen)

(%)

1,000.040

810.7 813.6
750.0 703.5

25.4(Billions of yen)

(%)

60.0

4.4

30

25.3

6

45.0

5

26.5

30.0

2.7
19.3

14/3

15/3

16/3

Net Sales (left)
Ratio of Overseas Sales to Net Sales (right)

26.4

2.9

2.6

28.0

3

19.6
3

0

20.0

22.0

2

1.7
11.8

2
10.0

10.0

13/3

4

3.5

30.6
30.0

10

12/3

40.0

4

20.0

0

(%)

3.8

33.1
20

250.0

(Billions of yen)

3.5

39.3
40.0

23.4

500.0

5.5
4.8

50.0

745.8 759.9

23.9

Profit Attributable to Owners of Parent /Ratio of Profit Attributable to Owners of
Parent to Net Sales

Operating Income / Ratio of
Operating Income to Net Sales

0

1

1

12/3

13/3

14/3

15/3

16/3

Operating Income (left)
Ratio of Operating Income to Net Sales (right)

0

0

12/3

13/3

14/3

15/3

16/3

0

Profit Attributable to Owners of Parent (left)
Ratio of Profit Attributable to Owners of
Parent to Net Sales (right)

Fuji Electric Report Financials 201602

Sales at the transmission and distribution business rosewith a contribution from large-scale overseas orders. The
industrial plant business recorded sales growth on strong
demand for energy conservation and replacement demand, as
well as an increase in data center orders, in Japan. Despite adecline in demand from the slowing of the Chinese market,
sales at the industrial and instrumentation equipment businessrose on strong domestic demand. At the equipment construction business, sales grew on increased construction of electric
power facilities and air-conditioning facilities. Higher sales andprogress in cost reductions drove the increase in overall operating income for the segment.

Net Income
Income before income taxes grew ¥847 million from theprevious fiscal year, to ¥46,566 million. After subtracting¥12,698 of income taxes and ¥3,224 of profit attributable tonon-controlling interests, profit attributable to owners of parent
increased ¥2,666 million from the previous fiscal year, to¥30,644 million.

Results by Business Segment
Power and Social Infrastructure
Net sales rose 4% from the previous fiscal year, to¥175,488 million, and operating income grew ¥1,950 million,to ¥9,736 million.
Orders received in fiscal 2015 (Power and Social Infrastructure
segment of Fuji Electric Co., Ltd., non-consolidated-basis) totaled¥129.8 billion.
Sales at the power plant business rose from the previous
fiscal year, on increased orders for thermal, geothermal, andhydropower generation facilities, and despite a decrease inorders for solar power generation systems. Sales rose at thesocial engineering systems business, mainly from increased
sales of smart meters. Sales at the social information businesswere roughly flat with the previous fiscal year. The increase in
overall operating income for the segment was the result ofhigher sales and progress in cost reductions.

Power Electronics
Net sales rose 1% from the previous fiscal year, to¥202,972 million, and operating income grew ¥174 million,to ¥7,755 million.
Orders for the fiscal year (Power Electronics segment of Fuji
Electric Co., Ltd., and Fuji Electric FA Components & Systems
Co., Ltd., non-consolidated-basis) totaled ¥154.0 billion.
The drive business recorded lower sales, reflecting adecline in demand associated with the slowdown of theChinese market. Despite this sales decline, operating income
was maintained at the previous fiscal year’s level through cost
reductions. Sales rose at the power supply business, reflecting
higher sales of domestic power supply equipment combinedwith the addition of Fuji SMBE Pte. Ltd. to the scope of consolidation. Higher sales led to an increase in operating income.
Sales declined at the ED&C components business, on adecline in demand from domestic machinery equipment manufacturers and lower overseas demand. Despite this decline insales, operating income rose from the previous fiscal year on
progress made in cost reductions.

Industrial Infrastructure
Net sales increased 6% from the previous fiscal year, to¥201,959 million, and operating income grew ¥1,824 million,to ¥12,966 million.
Orders for the fiscal year (Industrial Infrastructure segmentof Fuji Electric Co., Ltd., non-consolidated-basis) totaled¥151.3 billion.
Cash Dividends per Share /Net Income per ShareNet Sales by Segment*

Operating Income (Loss) by Segment*(Yen)(Billions of yen)(Billions of yen)

50.0

1,000.0

42.90
39.16

36.90

40.0

62.6

61.2
800.0

119.1

115.0

137.2

119.8

600.0

27.41

30.0

60.0

813.6

810.7

203.0

200.9

45.0

OthersFood andBeverageDistribution
Electronic
Devices
Power
Electronics

50.0

39.3

20.0

202.0

191.4
200.0

4.00
0

12/3

5.00

13/3

7.00

14/3

10.00
9.00
0

15/3

Cash Dividends per ShareNet Income per Share

03 Fuji Electric Report Financials 2016

16/3

–200.09.9Electronic
Devices

30.0

7.8

Power
Electronics

13.0

Industrial
Infrastructure

7.8

9.7

Power andSocialInfrastructure

–5.7

– 5.5

7.6

16.52

10.0

Food andBeverageDistribution

8.1

400.0

15/3

169.2

175.5

–68.3

– 64.3

16/3

Industrial
Infrastructure
Power andSocialInfrastructure
Elimination
andCorporate

20.0

11.1
10.0

0

–10.0

Others

7.8

1.9
8.5

40.0

2.3

15/3

* Based on figures reflecting the change in subsegments that took effect from April 1, 2014

16/3

Elimination
andCorporateElectronic Devices
Net sales declined 13% from the previous fiscal year, to¥119,846 million, while operating income grew ¥1,792 million,to ¥9,863 million.
Orders (Electronic Devices segment of Fuji Electric Co., Ltd.,and Fuji Electric (Malaysia) Sdn. Bhd., non-consolidated-basis)
totaled ¥96.0 billion.
Both sales and operating income declined at the semiconductor business. This reflected lower demand from the slowdown in China in the industrial field and the power supply
application field, a decline in demand from major domestic
customers in the industrial field, especially for machine tools,
and lower sales of vehicles equipped with the Company’s
products in the automotive field. At the magnetic disks business, sales declined as a result of changes in the product mix.
Operating income rose, however, with fixed cost reductions
more than offsetting the sales decline.

Others
Net sales increased 2%, to ¥62,587 million, and operating
income grew ¥452 million, to ¥2,336 million.
Note: As a result of organizational changes, the businesses included under the Power andSocial Infrastructure, Industril;al Infrastructure, and Power Electronics segments havechanged. Figures for the previous fiscal year at each segment have been adjusted toconform to the new classifications.

R&D Investment and Plant andEquipment Investment
R&D
Fuji Electric’s research and development pursues cutting-edgeenergy technologies to create products that contribute to therealization of a sustainable society that is safe and secure. Our
research and development also pursues Companywide synergies and globalization, along with open innovation with universities, research institutions, and other companies.
The Company’s research and development expenditures
for fiscal 2015 totaled ¥35,949 million. Expenditures by segment, and the results of that research and development, areoutlined below.
As of March 31, 2016, the number of industrial property
rights held by Fuji Electric in Japan and overseas stoodat 11,026.

Food and Beverage Distribution
Net sales declined 3% from the previous fiscal year, to¥114,987 million, with a ¥702 million decrease in operating
income, to ¥7,825 million.
Orders (Food and Beverage Distribution segment ofFuji Electric Co., Ltd., non-consolidated-basis) totaled¥105.1 billion.
At the vending machine business, although results in
China rose in line with the growth of the market, sales andoperating income both declined on lower demand fromdomestic beverage manufacturers as they held back on
investment. Sales and operating income both rose at the store
distribution business, on increased sales of freezing and refrigerating facilities for convenience stores.

R&D Expenditures / Ratio of R&D
Expenditures to Net Sales(Billions of yen)
40.0

35.0
32.2

31.2

35.9

Plant and Equipment Investment /Depreciation and Amortization

Total Net Assets / ROE(%)(Billions of yen)(Billions of yen)

8

40.0

32.0

30.0

6

4.6

4.2

4.2

4.3

Capital Expenditure
Capital expenditure for the fiscal year, including leases, totaled¥27.7 billion. This included investment for new products andstreamlining at the Power Electronics and Electronic Devices
segments.

400.0

33.6
31.8 31.1
30.8
29.8
29.7
29.0
30.0
27.7
26.9
25.0

40

319.6
300.0

261.0

251.2

4.4

20.0

(%)

30

215.7
4

200.0 183.2

20.0

20

14.7

10.0

0

12/3

13/3

14/3

15/3

16/3

R&D Expenditures (left)
Ratio of R&D Expenditures to Net Sales (right)

2

10.0

0

0

12/3

13/3

14/3

Plant and Equipment Investment
Depreciation and Amortization

15/3

16/3

100.0

7.4

0

12/3

9.3

10.8

11.8
10

13/3

14/3

15/3

16/3

0

Total Net Assets (left)
ROE (right)

Fuji Electric Report Financials 201604

Financial Position

To strengthen our development of new products andtechnologies, construction of research and development
centers at the Tokyo Factory (Companywide research) andMatsumoto Factory (power semiconductors) has been
completed, and construction of a power electronics technicalcenter has begun at the Suzuka Factory.
Major investments were as follows:
At the Power and Social Infrastructure segment, investments were made for new smart meter products and for the
streamlining of automated production lines. The power
generation business invested to upgrade and replace machineprocessing facilities.
Investments at the Industrial Infrastructure and PowerElectronics segments expanded production lines to increase
the cost competitiveness of Fuji Electric Manufacturing(Thailand) Co., Ltd. We invested in automated assembly lines
at the Suzuka Factory to bring production of small motors
back to Japan. We also invested in production facilities for
new products at the ED&C components business.
At the Electronic Devices segment, we invested in semiconductor front-end processing equipment to expand the
product lineup at the Tsugaru Factory. Investments were also
made to increase IPM (intelligent power modules, a semiconductor element used in power generation) production at Fuji
Electric Philippines, Inc.
The Food and Beverage Distribution segment madeinvestments for the automation of domestic assembly lines
and to increase vending machine production in China to meetthe growth of the beverage market.

Total Assets / ROA(Billions of yen)

(%)

1,000.0

5

904.5
792.8

800.0

765.6

3.3

3.5

600.0

Noncurrent Assets
Net property, plant and equipment stood at ¥176,476 million,
an increase of ¥1,523 million from the previous fiscal year-end.
Further, total investments and other assets amounted to¥174,970 million, down ¥91,630 million from the previous
fiscal year-end. This was attributable to a decrease of ¥70,128
million in investment securities, owing to factors such as thedecline in the value of available-for-sale securities following
differences in mark-to-market valuation.

Equity Ratio

Interest-bearing Debt /Debt-equity Ratio(%)(Billions of yen)
40.0

4

3

255.9
226.7

28.0

30.0

199.5

25.4

27.3

200.0

20.6

3

184.7

2

0.8

1

16/3

0

1.2

2

0.9
100.0

1.5

191.2

1.6

20.0

400.0

(Times)

300.0

32.1

2.5

0.7

10.0

200.0

0

Current Assets and Current Liabilities
Current assets increased ¥30,963 million from the end of theprevious fiscal year, to ¥493,932 million. This included a¥20,747 million increase in trade receivables and a ¥7,525
million increase in inventories.
Current liabilities increased ¥13,071 million, to ¥417,819
million. Although short-term debt decreased ¥7,763 million,
increases of ¥9,768 million in trade payables, ¥1,962 million
in the current portion of long-term debt, and ¥1,944 million
in advances received resulted in an overall increase.

845.4

810.8

3.4

Total Assets
Total assets as of March 31, 2016, stood at ¥845,378 million,a decrease of ¥59,144 million from the previous fiscal
year-end.

1

12/3

13/3

14/3

15/3

Total Assets (left)
ROA (right)

05 Fuji Electric Report Financials 2016

16/3

0

0

12/3

13/3

14/3

15/3

16/3

0

12/3

13/3

14/3

Interest-bearing Debt (left)
Debt-equity Ratio (right)

15/3

Long-Term Liabilities
Total long-term liabilities were ¥166,579 million, a decreaseof ¥13,559 million from the previous fiscal year-end. This
reflected decreases from the previous fiscal year-end of¥31,779 million in deferred tax liabilities, while net defined
benefit liability increased by ¥18,211 million.
Net Assets
Net assets as of March 31, 2016, totaled ¥260,980 million, adecrease of ¥58,656 million from the previous fiscal year-end.
Although retained earnings increased ¥22,568 million,
decreases of ¥39,274 in the valuation difference on availablefor-sale securities and ¥34,986 million in remeasurements ofdefined benefit plans led to an overall decrease. As a result,the equity ratio stood at 27.3%, a 4.8 percentage-point
decline from the previous fiscal year-end.
Debt
Interest-bearing debt as of the fiscal year-end totaled¥184,744 million, a decrease of ¥6,481 million from the end of
the previous fiscal year. The ratio of interest-bearing debt tototal assets was 21.9%, a 0.8 percentage-point increase fromthe previous fiscal year-end.
Cash Flow
Consolidated free cash flow (cash flows from operating
activities + cash flows from (used in) investing activities)
for fiscal 2015 was a positive ¥29,040 million, marking a¥331 million improvement from the previous fiscal year’s
positive free cash flow of ¥28,709 million.

Cash Flows from Operating Activities
Net cash and cash equivalents (“cash”) provided by operating
activities was ¥48,450 million, compared with ¥51,459 million
provided in the previous fiscal year. Major components
included increases in trade receivables and inventories, as wellas the recording of income before income taxes and anincrease in trade payables.
Net cash provided by operating activities was ¥3,009 million
less than in the previous year.

Cash Flows from (Used in) Investing Activities
Investing activities used net cash in the amount of ¥19,410
million, compared with ¥22,750 used in the previous fiscal
year. This was primarily for outlays for the purchase ofproperty, plant and equipment.
Net cash used in investing activities decreased ¥3,340
million from the previous fiscal year.
Cash Flows from (Used in) Financing Activities
Financing activities used net cash in the amount of ¥31,567
million, compared with ¥33,827 million used in the previous
fiscal year. This was mainly the result of repayments of leaseobligations and a net decrease in short-term loans payable.
As a result, consolidated cash and cash equivalents as ofMarch 31, 2016, was ¥30,838 million, a ¥1,057 million (3.3%)
decrease from the previous fiscal year-end.

Cash Flows

Free Cash Flow /Cash and Cash Equivalents(Billions of yen)(Billions of yen)

55.3

60.0

40.0

53.7

51.5

48.5

80.0

64.3
28.3

60.0

20.0

44.0
39.7
0

40.0

–13.5
– 20.0

–22.8

–24.3

33.4 31.9

31.1

–9.6

30.8
29.0

–19.4

–33.8 –31.6

–32.6

28.7

20.0 14.8– 40.0– 60.0

12/3

–56.8

–50.6

13/3

14/3

15/3

16/3

Cash Flows from Operating Activities
Cash Flows from (Used in) Investing Activities
Cash Flows from (Used in) Financing Activities

0

12/3

13/3

14/3

15/3

16/3

Free Cash Flow
Cash and Cash Equivalents

Fuji Electric Report Financials 201606

Risk Factors
Fuji Electric works to mitigate business risk and other risks in asystematic and methodical manner. However, there are various
risks, such as those listed below, which could have a negative
effect on the operating results and financial position of Fuji Electric.
As of March 31, 2016, the following factors were judged tohave a potential future effect on the operations of Fuji Electric.
(1) Risks Related to Changes in the Operating Environment(a)	In addition to increasing raw material and components
prices against the background of a weak yen, suchchanges as the drastically increasing demand in emerging
nations may result in tightened supply and demand as
regards materials and raw materials. Consequently,
although Fuji Electric strives to lessen the risk of rising raw
material prices through commodity swap transactions,significant increases in these prices could have a negative
effect on the operating results of Fuji Electric.
(b)	Fuji Electric is developing operations actively in overseas
markets, focusing particularly on expanding sales in China
and other Asian markets. In addition, economic trends inJapan, such as private sector capital investment and public
investment affect the Company significantly. In order tominimize the effect on operating results of overseas anddomestic market trends, the Company is implementing
overall cost and expense reductions. However, a deterioration of the business climate or a change of economic policy
in China, a dramatic change in product supply and demandor intensified competition in the market, or a steep
decrease in price levels as a result of such factors could
affect Fuji Electric’s operating results.
(c)	Based on an established set of management criteria, Fuji
Electric systematically employs forward-exchange contracts to minimize the risk of exchange rate fluctuations on
its operating results. However, the forward-exchange contract policy is not capable of entirely mitigating exchange
rate risk. Consequently, fluctuations in exchange rates,
primarily between the yen and the U.S. dollar, could have anegative effect on the operating results and financial
position of the Company.
(d)	Fuji Electric’s interest-bearing debt totaled ¥184,744 million
as of March 31, 2016. A higher-than-anticipated increase ininterest rates could lead to a significant additional interest
payment burden, which could have a negative effect on theoperating results of the Company.
(e)	Trends in the financial markets or deterioration in Fuji
Electric’s financial indicators could impact on Fuji Electric’s
fund procurement or interest payments, for example byprompting early repayment due to infringement on financial
covenants relating to certain loans. Such an event could
affect Fuji Electric’s operating results and financial position.

07 Fuji Electric Report Financials 2016

(2) Risks Related to Product Quality
Fuji Electric has put in place a quality assurance systemdesigned to ensure the highest level of quality for all of the
products that it manufactures and sells. Although the Company
has taken precautions in the form of product liability insurance
to provide compensation for product liability claims, in theevent that major defects are found in any Fuji Electric products
due to unforeseen factors, there could be a negative effect on
the Company’s operating results and financial position.
(3) Risks Related to Investments
Fuji Electric concentrates its management resources onquickly identifying potential business growth areas and conducts investment in facilities and R&D with the objective of
expanding and developing the Company’s business. The
large-scale investment necessary and short product cycles in
the magnetic disks and semiconductors fields, in particular, as
well as shifts in product demand and intensifying competition
increase the possibility that the Company might not be able torecoup its investments. Such events could thereby have anegative effect on the Company’s operating results.
(4) Risks Related to Technology Development
Fuji Electric makes a concerted effort to develop technologythat matches the needs of the market. However, there is apossibility that competing companies will gain an advantage
through faster development, or that the Company will be
unable to bring products to market in a timely manner should
development not progress according to plan. Such events
could thereby have a negative effect on the Company’s
operating results.
(5) Risks Related to Overseas Business Activities
Fuji Electric is seeking to expand its overseas presence, with aparticular focus on Asia, including China. Consequently, theCompany is exposed to the following risks, which could havea negative effect on the Company’s operating results andfinancial position:-	Unforeseen changes in laws and regulations as well as
tax systems that could have a detrimental effect on the
Company-	Disadvantages arising from political conditions-	Social turmoil related to terrorist incidents, war, andother events(6) Risks Related to Intellectual Property
Fuji Electric effectively manages its intellectual property rights
and develops new products and technologies in a manner that
does not infringe on third-party patent rights. However, since
the pace of technological innovation is accelerating and theCompany’s operations are becoming more global, the possibility of disputes over intellectual property rights is increasing. A
dispute of this nature could have a negative effect on the
Company’s operating results and financial position.

(7) Risks Related to Business Alliances
Fuji Electric actively collaborates with third-party entities inmergers, tie-ups, and other forms of alliances with theobjective of enhancing competitiveness in each of its fieldsof business. Cooperative relations are essential to the successof such collaborations.
However, differences in business systems, corporate cultures,or other aspects could impede the smooth integration ofbusiness strategies, technologies, products, personnel, orother elements necessary for a successful collaboration.
Such circumstances could thereby have a negative effecton the Company’s operating results.
(8) Risks Related to Human Resources
The business activities of Fuji Electric depend heavily on its
human resources. Retaining and training superior personnel insuch fields as technology, production, sales, and administration is essential to the growth of the Company. Should theCompany be unable to retain and/or train such necessary
human resources, this could have a negative effect on the
Company’s operating results.
(9) Risks Related to the Leakage of Personal Information
As a part of its business activities, Fuji Electric handles personal
information about numerous individuals, including customers,
suppliers, and employees. Fuji Electric has formulated andstrictly enforces thorough internal regulations regarding thegathering, use, and management of personal information.
However, the Company cannot entirely rule out the possibility
that such information could be leaked due to unforeseen
circumstances. Any leak of this kind could damage trust in Fuji
Electric and thereby have a negative effect on the Company’s
operating results.

(12) Risks Related to Retirement Benefit Liabilities
Fuji Electric has a lump-sum payment plan and a corporate
pension plan for its employees when they retire. Retirement
benefit costs and liabilities are calculated on the assumptionthat they are accepted as reasonable on the basis of actuarial
calculations. Fuji Electric and certain domestic consolidated
subsidiaries have also entrusted listed marketable securities to
employee retirement benefit trusts. Consequently, changes inthe discount rate, the expected rate of return on pension
assets and stock prices that are used as the basis of computing pension benefit obligations, differences between these
expectations and actual performance, changes in the prices of
entrusted listed marketable securities, and other items could
have a negative effect on the operating results and financial
position of Fuji Electric.
(13) Risks Related to ComplianceFuji Electric conducts business in a variety of fields andregions throughout the world, and as such is subject to thelaws and regulations of numerous countries. The Company
has put in place an appropriate internal control system toensure compliance, but the possibility of legal violations
cannot be discounted entirely. Should such a violation occur,
this could have a negative effect on the Company’s social
credibility and/or operating results.
(14) Risks Related to Lawsuits and Other Legal Proceedings
Fuji Electric, in the course of its business, could become thesubject of a lawsuit or other legal proceeding, and could as aresult unexpectedly become liable for the payment of large
amounts of compensation. Depending on the content of sucha decision, this could have a negative effect on the Company’s
operating results.

(10) Risks Related to Major Natural Disasters
Fuji Electric has a network of bases throughout the world. In
the event of a major natural disaster, production facilities could
be damaged, operations at manufacturing facilities could be
halted, shipments of products could be delayed, and otherrelated problems could occur. These events could thereby
have a negative effect on the operating results and financial
position of the Company.
(11) Risks Related to Soil Contamination
Based on the international standard for environmental protection systems, the Company works to prevent, measure, andmonitor soil contamination at its operating sites. Prior to selling
any land, the Company carries out soil surveys and takesother appropriate steps in accordance with relevant laws andregulations. However, as a result of these measurements andsurveys, the Company may incur costs for soil remediation
measures, which could have a negative effect on the operating
results of the Company.

Fuji Electric Report Financials 201608

Consolidated Balance Sheets
As of March 31, 2016 and 2015

Millions of yen

Thousands of
U.S. dollars(Note 3)

2016

2015

2016

¥   30,838
162
258,378(1,167)145,139
17,091
43,491
493,932¥   31,895
59
237,631(777)
137,614
17,24639,301
462,969$   275,346
1,447
2,306,952(10,428)
1,295,884
152,606
388,3084,410,115

Less accumulated depreciation
Net Property, Plant and Equipment

34,918
230,705
201,058
71,363
4,291
542,335(365,859)
176,476

35,080225,183
204,12165,838
7,603
537,825(362,872)
174,953

311,771
2,059,867
1,795,161
637,176
38,3094,842,284(3,266,600)
1,575,684

Investments and Other Assets:
Investment securities (Notes 5, 6 and 7):
Unconsolidated subsidiaries and affiliates
Other
Long-term loans receivable
Net defined benefit asset (Note 11)
Deferred tax assets (Note 16)
Other investments and other assets
Allowance for doubtful accounts
Total Investments and Other Assets
Total Assets

23,247102,017812
17,623
2,617
29,565(911)
174,970¥ 845,378

31,274
164,118
1,407
44,103
2,518
24,355(1,175)
266,600¥ 904,522

207,569
910,873
7,257
157,350
23,367
263,947(8,141)
1,562,222$ 7,548,021

AssetsCurrent Assets:
Cash and cash equivalents (Note 6)
Short-term investments (Notes 5, 6 and 7)
Trade receivables (Note 6)
Allowance for doubtful accounts
Inventories (Note 4)
Deferred tax assets (Note 16)
Other current assets
Total Current Assets

Property, Plant and Equipment (Note 5):Land
Buildings and structures
Machinery and equipment
Lease assets (Note 19)
Construction in progress

The accompanying Notes to the Consolidated Financial Statements are an integral part of these statements.

09 Fuji Electric Report Financials 2016

Thousands of
U.S. dollars(Note 3)

Millions of yen

Liabilities and Net Assets
Current Liabilities:
Short-term debt (Notes 5, 6 and 9)
Current portion of long-term debt (Notes 5, 6 and 9)
Trade payables (Notes 5 and 6)
Lease obligations (Notes 6 and 10)
Advances received
Income taxes payable (Note 16)
Other current liabilities (Note 23)
Total Current Liabilities
Long-term Liabilities:
Long-term debt (Notes 5, 6, and 9)
Lease obligations (Notes 6 and 10)
Net defined benefit liability (Note 11)
Provision for directors’ retirement benefits
Deferred tax liabilities (Note 16)
Other long-term liabilities (Note 23)
Total Long-term Liabilities
Total Liabilities

2016

2015

2016

¥ 59,317
36,977
160,416
11,97040,247
6,390
102,502417,819¥ 67,080
35,015
150,648
12,98838,303
5,905
94,809404,748$   529,625
330,155
1,432,294
106,881359,350
57,054915,171
3,730,530

88,44923,49850,729
195
797
2,911
166,579
584,398

89,12922,26032,518236
32,576
3,419
180,138
584,886

789,727
209,804
452,942
1,748
7,118
25,9701,487,309
5,217,839

47,586—
46,736132,111—47,586
46,735109,543424,876—
417,290
1,179,569(7,212)—219,221—(7,184)
196,680(64,399)—
1,957,336

30,254(1,132)
3,377(21,321)
11,17830,581
260,980¥845,378

69,528(513)
10,98013,66593,66029,296319,636¥904,522

270,126(10,110)30,153(190,370)
99,799273,047
2,330,182$7,548,021

Contingent Liabilities (Note 18):
Net Assets (Note 24)
Shareholders’ Equity:
Capital stock (Note 12):
Authorized - 1,600,000,000 shares
Issued- 746,484,957 shares as of March 31, 2016
746,484,957 shares as of March 31, 2015
Capital surplus
Retained earnings
Treasury stock at cost (Note 12):
32,109,374 shares as of March 31, 2016
32,057,107 shares as of March 31, 2015
Total Shareholders’ Equity
Accumulated Other Comprehensive Income (Loss):
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges (Notes 6 and 8)
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Total Accumulated Other Comprehensive Income
Non-controlling Interests
Total Net Assets
Total Liabilities and Net Assets

Fuji Electric Report Financials 201610

Consolidated Statements of Income
Years ended March 31, 2016 and 2015
Thousands of
U.S. dollars(Note 3)

Millions of yen

2016

2015

2016

Net Sales
Cost of Sales (Note 13)
Gross Profit¥813,550
603,236
210,314¥810,678
609,376
201,302$7,263,843
5,386,032
1,877,811

Selling, General and Administrative Expenses (Notes 13 and 14)
Operating Income

165,308
45,006

161,986
39,316

1,475,969
401,842

3,037(2,136)
(860)
1,279
(712)
608
45,6142,526(2,551)
3,666
1,031
(849)
3,823
43,13927,118(19,072)(7,684)
11,426(6,362)
5,426
407,268952
46,5662,580
45,7198,507
415,775

12,69833,86814,91930,800113,373
302,4023,224¥ 30,644

2,822¥ 27,97828,791$   273,611

Non-Operating Income (Expenses):
Interest and dividend income
Interest expense
Foreign exchange gains (losses)
Equity in earnings of affiliates
Other, net
Ordinary Income
Extraordinary Income, Net (Note 15)
Income Before Income Taxes
Income Taxes (Note 16)
ProfitProfit Attributable To Non-controlling Interests
Profit Attributable To Owners of Parent (Note 24)
The accompanying Notes to the Consolidated Financial Statements are an integral part of these statements.

11 Fuji Electric Report Financials 2016

Consolidated Statements of Comprehensive Income
Years ended March 31, 2016 and 2015
Thousands of
U.S. dollars(Note 3)

Millions of yen

Profit

2016

2015

2016

¥ 33,868¥30,800$ 302,402(39,295)(622)(8,300)(34,914)

24,731(531)
8,785
24,141(350,850)(5,556)(74,111)(311,736)

Other Comprehensive Income (Loss) (Note 17)
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Share of other comprehensive income (loss) of associates accounted for using
equity method
Total Other Comprehensive Income (Loss)
Comprehensive Income (Loss)

(520)

519

(4,649)(83,651)¥(49,783)

57,645¥88,445(746,902)$(444,500)

Comprehensive Income (Loss) Attributable to:
Owners of parent
Non-controlling interests¥(51,837)
2,054¥84,260
4,185$(462,837)
18,337

The accompanying Notes to the Consolidated Financial Statements are an integral part of these statements.

Fuji Electric Report Financials 201612

Consolidated Statements of Changes in Net Assets
Years ended March 31, 2016 and 2015
Thousands

Millions of yen

Number ofshares ofcapital stock

Capitalstock

Balance at March 31, 2014

CapitalsurplusRetainedearnings

Valuationdifference on
available-forsale securities

Deferred
gains orlosses onhedgesForeigncurrencytranslation
adjustments

Remeasurements ofdefinedbenefit plans

Treasury
stock

Total

Noncontrollinginterests

Total
net assets¥251,225

746,484¥47,586¥46,734¥102,631¥44,768¥    20¥ 3,205¥(10,614)¥(7,148)¥227,182¥24,043

Cumulative effect of changes inaccounting policies

—

—

—

(16,026)

—

—

—

—

—

(16,026)(180)(16,206)

Restated balance—

47,586

46,73486,60544,76820

3,205(10,614)(7,148)211,156

23,863

235,019

Profit attributable to ownersof parent———

27,978

—

—

—

—

—

27,978—27,978Change of scope of
consolidation

—

—

—

675

—

—

—

—

—

675

—

675

Cash dividends

—

—

—

(5,715)

—

—

—

—

—

(5,715)—(5,715)Purchase of treasury stock

—

—

—

—

—

—

—

—

(37)

(37)

—

(37)

Sales of treasury stock

—

—

1

—

—

—

—

—

1

2

—

2

Net changes of items other thanshareholders’ equity

—

—

—

—

24,760

(533)

7,775

24,279—56,281

5,433

61,714746,484¥47,586¥46,735¥109,543¥69,528¥  (513)¥10,980¥ 13,665¥(7,184)¥290,340¥29,296¥319,636

Balance at March 31, 2015
Cumulative effect of changes inaccounting policies

—

—

—

—

—

—

—

—

—

—

—

—

Restated balance—

47,586

46,735109,543

69,528(513)

10,98013,665(7,184)

290,340

29,296319,636

Profit attributable to ownersof parent———

30,644

—

—

—

—

—

30,644—30,644

Change of scope of
consolidation

—

—

—

(932)

—

—

—

—

—

(932)

—

(932)

Cash dividends

—

—

—

(7,144)

—

—

—

—

—

(7,144)—(7,144)Purchase of treasury stock

—

—

—

—

—

—

—

—

(28)

(28)

—

(28)

Sales of treasury stock

—

—

1

—

—

—

—

—

0

1

—

1

—

Net changes of items other thanshareholders’ equity
Balance at March 31, 2016

—

—

—

—

(39,274)(619)(7,603)(34,986)

746,484¥47,586¥46,736¥132,111¥30,254¥(1,132)¥ 3,377¥(21,321)$424,876$417,283 $   978,065$620,794$ (4,586)(82,482)

1,285(81,197)¥(7,212) ¥230,399¥30,581¥260,980$(64,149) $2,592,320$261,576 $2,853,896

Thousands of U.S. dollars (Note 3)

Balance at March 31, 2015
Cumulative effect of changes inaccounting policies$98,026 $ 122,011

—

—

—

—

—

—

—

424,876

417,283

978,065

620,794(4,586)

98,026122,011

Profit attributable to ownersof parent——

273,611

—

—

—

—

—

273,611—

273,611

Change of scope of
consolidation——(8,319)

—

—

—

—

—

(8,319)—(8,319)

Restated balance——(64,149) 2,592,320——

261,576 2,853,896

Cash dividends——(63,788)

—

—

—

—

—

(63,788)—(63,788)

Purchase of treasury stock

—

—

—

—

—

—

—

(257)

(257)

—

(257)

Sales of treasury stock

—

7

—

—

—

—

—

7

14

—

14

Net changes of items other thanshareholders’ equity

—

—

—

(350,668)(5,524)(67,873)(312,381)—(736,446)

11,471(724,975)$417,290 $1,179,569$270,126$(10,110)

Balance at March 31, 2016

$424,876

The accompanying Notes to the Consolidated Financial Statements are an integral part of these statements.

13 Fuji Electric Report Financials 2016

$30,153 $(190,370)$(64,399) $2,057,135$273,047 $2,330,182

Consolidated Statements of Cash Flows
Years ended March 31, 2016 and 2015
Thousands of
U.S. dollars(Note 3)

Millions of yen

Cash Flows from Operating Activities:
Income before income taxes
Depreciation and amortization
Increase (decrease) in allowance for doubtful accounts
Interest and dividend income
Interest expense
Foreign exchange losses (gains)
Gain on sales of noncurrent assets
Gain on sales of investment securities
Gain on change in equity
Loss on disposal of noncurrent assets
Loss on devaluation of investment securities
Impairment loss
Loss on liquidation of subsidiaries
Changes in operating assets and liabilities:
Trade receivables
Inventories
Trade payables
Advances received
Other, net
Cash generated from operations
Interest and dividends received
Interest expenses paid
Income taxes paid
Net cash provided by operating activities
Cash Flows from (Used in) Investing Activities:
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of investment securities
Proceeds from sales of investment securities
Payments of loans receivableCollection of loans receivable
Other, net
Net cash used in investing activities
Cash Flows from (Used in) Financing Activities:
Net increase (decrease) in short-term loans payable
Proceeds from long-term loans payable
Repayment of long-term loans payable
Proceeds from issuance of bonds
Redemption of bonds
Repayments of lease obligations
Proceeds from sales of treasury stock
Purchase of treasury stock
Cash dividends paid
Cash dividends paid to non-controlling interests
Other, net
Net cash used in financing activities
Effect of Exchange Rate Changes on Cash and Cash Equivalents
Net Decrease in Cash and Cash Equivalents
Cash and Cash Equivalents at Beginning of Year
Increase in Cash and Cash Equivalents Resulting from Change of
Scope of Consolidation
Increase in Cash and Cash Equivalents Resulting from Merger with
Unconsolidated Subsidiaries
Cash and Cash Equivalents at End of Year

2016

2015

2016

¥ 46,566
29,723(527)(3,037)
2,136
6
(989)
(2,351)
—
775
167
282
470

¥ 45,719
33,615657(2,526)
2,551
610
(81)
(2,778)(4,843)
880
447
2,830
—

$ 415,775
265,390(4,708)(27,118)
19,07262(8,834)(20,993)
—
6,924
1,491
2,522
4,203

(22,609)(7,811)
12,513
1,750(1,437)55,627
3,035(2,186)(8,026)48,450(8,646)(12,572)
3,410
3,958
(4,456)
58,7752,572(2,536)(7,352)51,459(201,873)(69,744)
111,731
15,627(12,850)
496,677
27,105(19,519)(71,669)
432,594(17,843)
1,994(4,657)
5,878(6,888)
6,242(4,136)(19,410)(15,248)868(10,253)
6,233(6,530)5,578(3,398)(22,750)(159,320)
17,804(41,582)
52,484(61,504)
55,733(36,919)(173,304)(8,245)
19,520(20,106)
15,000(15,000)(14,490)1(28)(7,144)(1,002)(73)(31,567)(2,099)(4,626)31,895

11,073751(24,357)——(14,562)1(37)(5,715)(981)—(33,827)
1,718(3,400)33,412(73,621)
174,287(179,524)
133,929(133,929)(129,383)
14(257)(63,788)(8,947)(626)(281,845)(18,745)(41,300)
284,777

3,552

1,883

31,71517—154¥ 30,838¥ 31,895$ 275,346

The accompanying Notes to the Consolidated Financial Statements are an integral part of these statements.

Fuji Electric Report Financials 201614

Notes to the Consolidated Financial Statements
Note 1. Basis of Preparing Consolidated Financial Statements
The accompanying consolidated financial statements of Fuji ElectricCo., Ltd. (the “Company”) and consolidated subsidiaries (together,
the “Companies”) are prepared on the basis of accounting principles
generally accepted in Japan, which are different in certain respects
as to application and disclosure requirements of International
Financial Reporting Standards, and are compiled from the consolidated financial statements prepared by the Company as required by
the Financial Instruments and Exchange Law of Japan.

In preparing these statements, certain reclassifications andrearrangements have been made to the consolidated financial
statements prepared domestically in Japan in order to present thesestatements in a form that is more familiar to readers outside Japan.
In addition, the notes to the consolidated financial statements
include additional information which is not required underaccounting principles generally accepted in Japan. Certain amounts
in the prior year’s financial statements have been reclassified toconform to the current year’s presentation.

Note 2. Summary of Significant Accounting Policies
a. Principles of Consolidation
The consolidated financial statements for the year ended March 31,
2016 include the accounts of the Company and its 69 significant
subsidiaries and its 5 subsidiaries and affiliates are accounted for by
the equity method (48 and 5 in 2015).
Under the control or influence concept, the accompanying
consolidated financial statements include the accounts of theCompany and, with minor exceptions, those of its subsidiaries,
whether directly or indirectly controlled, and those companies overwhich the Companies have the ability to exercise significant influence
are accounted for by the equity method. All significant intercompany
balances and transactions have been eliminated in consolidation.
All material unrealized profit included in assets resulting from transactions within the Companies is eliminated. The Company does notconsolidate nor apply the equity method to subsidiaries or affiliates
whose gross assets, net sales, net income (loss) and retained
earnings are not significant to the consolidated financial statements.
Investments in unconsolidated subsidiaries and affiliates arestated at cost.
The balance sheet date of certain consolidated subsidiaries is
December 31. In principle, the financial statements of such subsidiaries were tentatively prepared in accordance with the fiscal year of
the Company, and those were consolidated.
In the elimination of investments in subsidiaries, the assets andliabilities of the subsidiaries, including the portion attributable tonon-controlling shareholders, are evaluated using the fair value atthe time the Company acquired control of the respective subsidiaries.
Goodwill resulting from the difference between the cost and theunderlying net assets at the respective dates of acquisition arebeing amortized over a period of 5 or 10 years.

b. Cash Equivalents
For the purpose of the consolidated statements of cash flows, theCompanies consider all short-term, highly liquid instruments with amaturity of three months or less to be cash equivalents.

c. Inventories
Raw materials are mainly stated at cost, determined by the mostrecent purchase price method. Finished goods and work in process
are mainly stated at actual cost determined by accumulated
production cost for contract items or average cost for regular
production items, except that finished goods of certain consolidated

15 Fuji Electric Report Financials 2016

subsidiaries are priced by the most recent purchase price method.
In accordance with accounting practices generally accepted in theheavy electric industry, inventories include items with a manufacturing period exceeding one year.
Inventories with lower profitability were written down and thelosses on valuation were included in cost of sales.

d. Securities
Marketable securities classified as other securities are stated at fairvalue. Unrealized gains and losses, net of taxes, are reported in a
separate component of net assets.
Nonmarketable securities classified as other securities are statedat cost determined by the moving-average method.

e. Derivatives and Hedging Activities
The Companies enter into derivative financial instruments (“derivatives”),
including foreign currency forward contracts to hedge foreignexchange risk associated with certain assets and liabilities denominated in foreign currencies and interest rate swap agreements as ameans of managing its interest rate exposures on certain liabilities.
In addition, the Companies enter into commodity swap agreements to hedge the risk of fluctuation of commodity prices for raw
materials.
Derivative financial instruments and foreign currency transactions
are classified and accounted for as follows:a) Except as described in the following paragraphs b) and c),
all derivatives are recognized as either assets or liabilities andmeasured at fair value, and forward contracts applied forforecasted transactions are measured at fair value but theunrealized gains/losses are deferred until the underlying
transactions are completed if the forward contracts qualify forhedge accounting.
b) Trade receivables and trade payables denominated in foreign
currencies for which foreign exchange forward contracts areused to hedge the foreign currency fluctuations are translated
at the contracted rate if the forward contracts qualify forhedge accounting.
c) The interest rate swaps which qualify for hedge accounting
and meet specific matching criteria are not remeasured atmarket value but the differentials paid or received under theswap agreements are recognized and included in interest
expense or income.

f. Depreciation
1) Tangible fixed assets (excluding leased assets)
Depreciation is computed by the declining-balance method at rates
based on the estimated useful lives of the assets, while the straightline method is applied to the buildings of the Company and its
domestic consolidated subsidiaries acquired after April 1, 1998. The
range of useful lives is from 7 to 50 years for buildings and from 5 to
12 years for machinery and equipment.
2) Leased assets
Depreciation is computed by the straight-line method over the lease
period assuming no residual value. Finance leases other than thosethat were deemed to transfer the ownership of the leased assets tothe lessees and contracted before April 1, 2008, are accounted forby the method that is applicable to ordinary operating leases.

g. Allowance for Doubtful Accounts
The allowance for doubtful accounts is stated in amounts considered tobe appropriate based on the Companies’ past credit loss experienceand an evaluation of potential losses in the receivables outstanding.

temporary differences between the carrying amounts and the tax
bases of assets and liabilities. Deferred taxes are measured byapplying currently enacted tax laws to the temporary differences.

m. Foreign Currency Transactions
All monetary receivables and payables denominated in foreign
currencies are translated into Japanese yen at the exchange rates atthe balance sheet date. The foreign exchange gains and losses fromtranslation are recognized in the consolidated statements of income tothe extent that they are not hedged by forward exchange contracts.

n. Foreign Currency Financial Statements
Assets, liabilities, and revenue and expense accounts of the foreign
consolidated subsidiaries are translated into Japanese yen at thecurrent exchange rate as of the balance sheet date except forshareholders’ equity, which is translated at the historical rate.
Differences arising from such translation are included in foreign
currency translation adjustments and non-controlling interests inconsolidated subsidiaries as a separate component of net assets.

o. Accounting for Consumption Taxes
h. Retirement Benefits(1) The retirement benefit obligation for employees is attributed toeach period by the benefit formula method over the estimatedyears of service of the eligible employees.
(2) The prior service costs are amortized by the straight-line method
within the average remaining years of service of the employees
participants. The actuarial gains and losses are amortized by thestraight-line method within the average remaining years ofservice of the employee participants from the next period inwhich they arise, respectively.

The Japanese consumption taxes withheld and consumption taxes
paid are not included in the accompanying consolidated statements
of income.

p. Amounts Per Sharej. Research and Development Costs

Basic net income per share is computed based on the profit
attributable to common shareholders of the parent and the weighted
average number of shares of common stock outstanding during theyear, and diluted net income per share is computed based on the
profit attributable to owners of parent’s common stock andweighted average number of shares of common stock outstanding
during each year after giving effect to the dilutive potential of sharesof common stock to be issued upon the exercise of warrants andstock subscription rights.
Net assets per share are computed based on the net assets
excluding share subscription rights and non-controlling interests andthe number of shares of common stock outstanding at the year end.

Research and development costs are charged to income
as incurred.

q. Changes in Accounting Policies

i. Provision for Directors’ Retirement Benefits
For certain consolidated subsidiaries, the accrued retirement
benefits for directors were provided mainly at an amount to berequired at the year-end according to internal regulations.

k. Recognition for Revenue and Costs
For long-term construction contracts whose outcome can be
estimated reliably, the percentage-of-completion method isadopted. The stage of completion of a contract is determined by
the percentage of the cost incurred to date to the estimated total
cost. When the outcome of the construction contracts cannot be
estimated reliably, the completed-contract method is adopted.

l. Income Taxes
The provision for income taxes is computed based on the pretax
income included in the consolidated statements of income. The
Company filed a consolidated tax return, which allows companies
to file tax payments on the combined basis of profits or losses ofthe parent company and its wholly owned domestic subsidiaries.
The asset and liability approach is used to recognize deferred tax
assets and liabilities for the expected future tax consequences of(Application of “Accounting Standards for Business Combination, etc.”)
Effective April 1, 2015, the Company and its domestic consolidated
subsidiaries have adopted “Revised Accounting Standard forBusiness Combination” (Accounting Standard Board of Japan(“ASBJ”) Statement No. 21 of September 13, 2013), “Revised
Accounting Standard for Consolidated Financial Statements” (ASBJ
Statement No. 22 of September 13, 2013), and “Revised
Accounting Standards for Business Divestitures” (ASBJ Statement
No. 7 of September 13, 2013), etc.
Accordingly, the accounting treatment for business combination
has been amended as follows: Any changes in a parent’s ownershipinterests in its controlled subsidiaries are recorded as changes incapital surplus and the acquisition-related costs are expensed forthe consolidated fiscal year in which they arise. Revisions in provisional amounts of purchase price allocations are recorded in the
consolidated fiscal year in which the allocations are completed.
In addition, the presentation method of net income and other related

Fuji Electric Report Financials 201616

items were amended and the reference to “minority interests” waschanged to “non-controlling interests.”
Consolidated financial statements for the previous fiscal year
have been reclassified in order to reflect this change in presentation.
In accordance with transitional treatment as stipulated in paragraph58-2 (4) of the Revised Accounting Standard for Business
Combination, paragraph 44-5 (4) of the Revised AccountingStandard for Consolidated Financial Statements, and paragraph57-4 (4) of the Revised Accounting Standard for Business Divestitures,
the Company and its domestic consolidated subsidiaries started toapply these standards at the beginning of the current consolidated
fiscal year and will continue to do so in the future.
These changes do not affect the consolidated financial
statements for the current consolidated fiscal year.

Note 3. U.S. Dollar Amounts
The U.S. dollar amounts included in the accompanying consolidated
financial statements and notes thereto represent the arithmetic resultsof translating yen into U.S. dollars at ¥112=U.S.$1, the approximate

exchange rate as of March 31, 2016. The U.S. dollar amounts arepresented solely for the convenience of the readers outside Japan.

Note 4. Inventories
Inventories as of March 31, 2016 and 2015 consisted of the following:Thousands of
U.S. dollars (Note 3)

Millions of yen

Merchandise and finished goods
Work in process
Raw materials
Inventories

2016

2015

2016

¥ 56,290
52,41036,439¥145,139¥ 54,495
48,78734,332¥137,614$  502,596
467,955
325,333$1,295,884

Losses (gains) on valuation of inventories with lower profitability were ¥587 million ($5,246 thousand) and ¥663 million for the years
ended March 31, 2016 and 2015, respectively. These were included in cost of sales.

Note 5. Pledged Assets and Financial Assets Accepted as Collateral
The amounts of assets pledged as collateral for trade payables, short-term debt and long-term debt as of March 31, 2016 and 2015 wereas follows:
Thousands of
U.S. dollars (Note 3)

Millions of yen

Investment securities
Property, plant and equipment
Intangible assets
Total

2016

2015

2016

¥   15
5,723
472¥6,210¥   23
3,984—¥4,007$   138
51,107
4,205$55,450

Collateralized liabilities as of March 31, 2016 and 2015 were as follows:
Thousands of
U.S. dollars (Note 3)

Millions of yen

2016

Trade payables
Short-term debt
Long-term debt
Total

17 Fuji Electric Report Financials 2016

¥ 43
244
431
¥718

2015

¥ 45
—
501
¥546

2016

$  3852,182
3,844$6,411

Note 6. Financial Instruments
1. Status of financial instruments(1) Policy regarding financial instruments
The Companies limit the scope of their cash and fund management
activities to short-term deposits. When raising funds, the Companies
have a policy of relying principally on bank borrowings, bonds
payable and commercial paper. The Companies mainly raise theoperating funds through short-term loans payable and commercial
paper, and the funds relating to capital investments through longterm loans payable and bonds payable. The Companies make useof derivatives to reduce risk, as explained below, and have a policyof not engaging in derivative transactions for speculative purposes.
(2) Details of financial instruments and associated risk
In the course of its business activities, trade receivables are
exposed to customer credit risk.
In addition, trade receivables denominated in foreign currencies
arising from international business are exposed to exchange risk.
The Companies hedge the exchange risk, by using foreign exchange
forward contracts within the range prescribed relating to the net
amount of the trade receivables denominated in foreign currencies,
offset by the amount of the trade payables denominated in thesame currencies.
Short-term investments and investment securities are comprised
primarily of stocks of companies with which the Companies havebusiness relations and are exposed to market price risk.
Trade payables are mostly payable within one year. Some trade
payables are denominated in foreign currencies and exposed to
exchange risk. The Companies hedge the exchange risk of the
trade payables denominated in foreign currencies in principle, except
for the amount within that of trade receivables denominated in thesame currencies, by using foreign exchange forward contracts.
Short-term loans payable and commercial paper are primarilyraised for the purpose of maintaining operating funds. Bonds
payable, long-term loans payable and lease obligations on financelease transactions are primarily raised for the purpose of preparing
capital investment. The maturities of these bonds payable, longterm loans payable and lease obligations on finance lease transactions are up to 11 years at the longest after the balance sheet date.
Some are exposed to interest rate fluctuation risk and theCompanies hedge such risk by interest rate swap transactions.
Regarding derivatives, the Companies employ foreign exchange
forward contracts to reduce the risk of foreign currency exchange
movements that arise from the previously mentioned receivables
and payables denominated in foreign currencies. In addition, theCompanies use interest rate swap transactions to reduce theinterest rate fluctuation risk of loans, and use commodity swap
transactions to reduce the risk of fluctuation of commodity prices
for raw materials. As hedging instruments under hedge accounting,
the Companies enter into these derivative transactions in accordance with the Companies’ policies to reduce the corresponding
risk to each hedged item. The Companies compare the market
change of hedged items and hedging instruments or the cash flowchanges. Assessment of effectiveness for hedging activities
depends on the ratio of the amount of change.

(3) Systems for management of financial instruments riska) Credit risk management (the risk that transaction partners
may default on their obligations to the Companies)
The credit risk in relation to trade receivables from customers,
pursuant to criteria for managing credit exposure, is managed bycontrolling due dates and balances of each customer. In addition,
the Companies manage to identify doubtful receivables earlier andmitigate their risk caused by aggravation of the financing position, etc.
Because the counterparties to derivative transactions are limited
to authentic financial institutions, the Companies do not anticipate
any losses arising from credit risk.
b) Market risk management (the risks arising from fluctuations
in exchange rates, interest rates and other indicators)
The Companies, in principle, employ foreign exchange forward
contracts to reduce the risk of foreign currency exchange
movements that arise from the previously mentioned receivables
and payables denominated in foreign currencies. In addition, theCompanies use interest rate swap transactions to reduce theinterest rate fluctuation risk of loans, and use commodity swap
transactions to reduce the risk of fluctuation of commodity prices
for raw materials.
Regarding investment securities, the Companies periodicallyreview the market value of such financial instruments and the financial
position of the issuer (the company having business transactions
with the Companies). In addition, other than debt securities to beheld until maturity, the Companies review the status of theseinvestments on a continuing basis.
Derivative transactions have been entered into in accordancewith the Companies’ policies. The execution of derivatives, which
is based on the application of each section, is mainly controlled by
the Finance Department of each company, or by the Material
Section regarding commodity swap transactions. In addition, theFinance Department periodically reports to the management andeach section, and strictly performs risk management relating toderivative transactions.
c) Liquidity risk management (the risk that the Companies
may not be able to meet their payment obligations on thescheduled date)
The Companies reduce the liquidity risk by having each company
review and revise cash management plans monthly or timely.
(4) Supplementary explanation of the estimated fair value offinancial instruments and related matters
The estimated fair value of financial instruments is their price basedon their market price and other indicators. When there is no market
price available, it includes prices which are reasonably computed.
Since variable factors are taken into account in computing theprice, this price may fluctuate depending on different assumptions
adopted. In addition, the contract (notional) amount of derivatives in“Note 8. Derivatives” is not an indicator of the actual market risk
involved in derivative transactions.

Fuji Electric Report Financials 201618

2. Estimated fair value and other matters related to financial instruments
Carrying amounts on the consolidated balance sheets as of March 31, 2016 and 2015, estimated fair value and the variance between them
are shown in the following table. Financial instruments whose estimated fair value is deemed to be extremely difficult to obtain are notincluded (please refer to Note 2).
Millions of yen

2016

Cash and cash equivalents
Trade receivables
Investment securities
Trade payables
Short-term debt
Current portion of long-term debt
Lease obligations (Current Liabilities)
Long-term debt
Lease obligations (Long-term Liabilities)
Derivatives
Derivative transactions to which hedge accounting is not applied
Derivative transactions to which hedge accounting is applied

Carrying amounts

Fair value

Variance¥  30,838
258,378
109,000(160,416)(59,317)(36,977)(11,970)(88,449)(23,498)¥  30,838
258,358
119,074(160,416)(59,317)(36,977)(11,970)(89,326)(23,768)¥     —
(20)
10,074
—
—
—
—
877
270

13
(1,643)13(1,643)——

Millions of yen

2015

Cash and cash equivalents
Trade receivables
Investment securities
Trade payables
Short-term debt
Current portion of long-term debt
Lease obligations (Current Liabilities)
Long-term debt
Lease obligations (Long-term Liabilities)
Derivatives
Derivative transactions to which hedge accounting is not applied
Derivative transactions to which hedge accounting is applied

Carrying amounts

Fair value¥  31,895
237,631
168,374(150,648)(67,080)(35,015)(12,988)(89,129)(22,260)¥  31,895
237,596
175,963(150,648)(67,080)(35,015)(12,988)(90,193)(22,428)

Variance

¥   —
(35)
7,589
—
—
—
—
1,064
168

4
(767)

4
(767)

—
—

Thousands of U.S. dollars (Note 3)

2016

Cash and cash equivalents
Trade receivables
Investment securities
Trade payables
Short-term debt
Current portion of long-term debt
Lease obligations (Current Liabilities)
Long-term debt
Lease obligations (Long-term Liabilities)
Derivatives
Derivative transactions to which hedge accounting is not applied
Derivative transactions to which hedge accounting is applied

Carrying amounts

Fair value$   275,346
2,306,952
973,220(1,432,294)(529,625)(330,155)(106,881)(789,727)(209,804)$   275,346
2,306,769
1,063,164(1,432,294)(529,625)(330,155)(106,881)(797,561)(212,218)$     —
(183)
89,944
—
—
—
—
7,834
2,414

121
(14,670)

121(14,670)——(*1) Figures shown in parentheses are liability items.
(*2) The value of assets and liabilities arising from derivatives is shown at net value, and a net liability position is shown in parentheses.

19 Fuji Electric Report Financials 2016

Variance

Notes: 1. Methods for computing the estimated fair value of financial instruments, and information on securities and derivatives		 (1) Cash and cash equivalents			
Since these items are settled in a short period of time, estimated fair values are virtually the same as the carrying amounts.
		 (2) Trade receivables
			Fair values of trade receivables, classified by each maturity, are based on the present value discounted by the interest rate determined taking into account the term until
maturity and the credit risk.
		 (3) Investment securities
			
Stocks are valued at the exchange trading price. For information on securities classified by the purpose of holding, please refer to “Note 7. Securities.”		 (4) Trade payables, (5) Short-term debt, (6) Current portion of long-term debt (except bonds) and (7) Lease obligations (Current Liabilities)			
Since these items are settled in a short period of time, estimated fair values are virtually the same as the carrying amounts.
		 (6) Current portion of long-term debt (bonds) and (8) Long-term debt (bonds)
			
Fair values of bonds issued by the Company are based on each market price.
		 (8) Long-term debt (except bonds) and (9) Lease obligations (Long-term Liabilities)
			Fair values of these items are based on the present value of the total of principal and interest discounted by the interest rate applied if similar new borrowings and new leasetransactions were entered into.
		 (10) Derivatives
			Please refer to “Note 8. Derivatives.”
2. Items for which obtaining an estimated fair value is deemed to be extremely difficult
Thousands of
U.S. dollars(Note 3)

Millions of yen

2016

2015

2016

Carrying amounts

Carrying amounts

Carrying amounts¥16,265¥27,019$145,223

Unlisted stocks (including stocks of unconsolidated subsidiaries and affiliates)	Because the items in the preceding table do not have market price and obtaining the estimated fair values of these items is deemed to be extremely difficult, fair value has notbeen disclosed in (3) Investment securities.
3. Redemption schedule for monetary assets and securities with maturity dates as of March 31, 2016 and 2015:
Millions of yen

2016
Within 1 year

Between 1 and5 years

Between 5 and10 years

Cash and cash equivalents¥ 30,838

¥   —

¥—

¥—

Trade receivables

253,704

4,636

38

—

Over 10 years

Investment securities
	Debt securities with maturity date classified as other securities(Public bonds)
		Total

0

—

—

—

¥284,542¥4,636¥38¥—

Millions of yen

2015
Within 1 year

Between 1 and5 years

Between 5 and10 years

Cash and cash equivalents¥ 31,895

¥   —

¥—

¥—

Trade receivables

232,510

5,090

31

—

Over 10 years

Investment securities
	Debt securities with maturity date classified as other securities(Public bonds)
		Total

1

—

—

—

¥264,406¥5,090¥31¥—

Thousands of U.S. dollars (Note 3)

2016
Within 1 year

Between 1 and5 years

Between 5 and10 years

Over 10 years

Cash and cash equivalents$  275,346$    —$  —$—

Trade receivables

2,265,207

41,398347—

Investment securities
	Debt securities with maturity date classified as other securities(Public bonds)
		Total

3

—

—

—

$2,540,555$41,398$347$—

4. Repayment schedule for long-term debt and lease obligations:
		 Please refer to “Note 9. Short-term Debt and Long-term Debt” and “Note 10. Lease Obligations.”

Fuji Electric Report Financials 201620

Note 7. Securities
1. Other securities as of March 31, 2016 and 2015 were as follows:
Millions of yen

2016

Marketable securities classified as other securities
Equity securities
Debt securities
Others
Total

Cost

Carrying amounts¥54,5360—¥54,536¥98,0140—¥98,014

Unrealized gains

Unrealized losses¥44,209——¥44,209¥(731)——¥(731)

Millions of yen

2015

Marketable securities classified as other securities
Equity securities
Debt securities
Others
Total

Cost

Carrying amounts

Unrealized gains

Unrealized losses¥55,548
1—¥55,549¥157,534
1—¥157,535¥102,614——¥102,614

¥628
—
—
¥628

Thousands of U.S. dollars (Note 3)

2016

Marketable securities classified as other securities
Equity securities
Debt securities
Others
Total

Cost

Carrying amounts

Unrealized gains

Unrealized losses$486,928
2—$486,930$875,126
2—$875,128$394,730——$394,730$(6,532)——$(6,532)

Note: The following is not included in the preceding tables because it does not have market price and obtaining an estimated fair value is deemed to be extremely difficult:
Unlisted stocks (Values in the consolidated balance sheets as of March 31, 2016 and 2015 were ¥4,003 million ($35,747 thousand) and ¥6,584 million, respectively.)

2. Sales of other securities for the years ended March 31, 2016 and 2015 were as follows:
Thousands of
U.S. dollars (Note 3)

Millions of yen

Proceed from sales
Gain on sales
Loss on sales

2016

2015

2016

¥5,7792,330
0¥5,7432,732
7$51,601
20,8090

3. Impairment of other securities for the years ended March 31, 2016 and 2015 were as follows:
Thousands of
U.S. dollars (Note 3)

Millions of yen

2016

Impairment losses

21 Fuji Electric Report Financials 2016

¥167

2015

¥447

2016

$1,491

Note 8. Derivatives
1. Derivative transactions to which hedge accounting is not applied
Millions of yen

2016
Contract amountForeign currency forward contracts:
Receivables:
U.S. dollars
Euro
Korean won
Canadian dollars
Yen
Payables:U.S. dollars
Korean won
Yen
Total

Contract amountover 1 year

Fair value

Unrealized
gain/loss¥1,087
1,346
112
162
66

¥—
—
—
—
—

¥ 43
10
(3)
(0)
(2)

¥ 43
10
(3)
(0)
(2)

702
366
10
¥3,851

—
—
—
¥—

(2)
(33)
0
¥ 13

(2)
(33)
0
¥ 13

Millions of yen

2015
Contract amountForeign currency forward contracts:
Receivables:
U.S. dollars
Euro
Korean won
Canadian dollars
Payables:Korean won
Yen
Total

Contract amountover 1 year

Fair value

Unrealized
gain/loss¥2,258
1,434
270
286

¥  —
—
—
—

¥(53)
103
(4)
(33)

¥(53)
103
(4)
(33)

544
29
¥4,821

260
—
¥260

(7)
(2)
¥   4

(7)
(2)
¥   4

Thousands of U.S. dollars (Note 3)

2016
Contract amountForeign currency forward contracts:
Receivables:
U.S. dollars
Euro
Korean won
Canadian dollars
Yen
Payables:U.S. dollars
Korean won
Yen
Total

Contract amountover 1 year

Fair value

Unrealized
gain/loss$ 9,675
12,026
1,008
1,453
591

$—
—
—
—
—

$ 407
94
(35)
(2)
(20)

$ 407
94
(35)
(2)
(20)

6,274
3,270
91
$34,388

—
—
—
$—

(21)
(302)
0
$ 121

(21)
(302)
0
$ 121

Note: The fair value is estimated based on forward exchange rates.

Fuji Electric Report Financials 201622

2. Derivative transactions to which hedge accounting is applied(1) Currency-related contracts
Millions of yen

2016
Hedge accounting
methodDeferral hedge
methodAllocation method

Type of derivative

Foreign currency forward contracts:
Receivables:
U.S. dollars
Euro
UAE Dirham
Payables:U.S. dollars
Euro
Swiss franc
UAE Dirham
Foreign currency forward contracts:
Receivables:
U.S. dollars
Payables:U.S. dollars
Euro
Total

Principal items hedged

Contract amountContract amountover 1 year

Fair value

Accounts receivable–trade¥ 4,550394
3¥ 3,336——¥   152
(1)
0

4,113
23,40479
2758
20,162——(138)(1,638)(3)(0)¥ 1,913¥   580647
92¥35,197—2¥24,838

Accounts payable–trade

Accounts receivable–trade
Accounts payable–trade(Note 2)¥(1,628)

Millions of yen

2015
Hedge accounting
methodDeferral hedge
methodAllocation method

Type of derivative

Foreign currency forward contracts:
Receivables:
U.S. dollars
Euro
Payables:U.S. dollars
Euro
Swiss franc
Foreign currency forward contracts:
Receivables:
U.S. dollars
Euro
Payables:U.S. dollars
Euro
Singapore dollars
Total

Principal items hedged

Contract amountContract amountover 1 year

Fair value

Accounts receivable–trade¥ 4,972553¥   603—¥   (404)
17

8,366
20,73278

1,014
16,89738

1,069(1,451)
2

924
12

—
—

(Note 2)12724
3¥35,791———¥18,552¥   (767)

Accounts payable–trade

Accounts receivable–trade
Accounts payable–trade

Thousands of U.S. dollars (Note 3)

2016
Hedge accounting
methodDeferral hedge
methodAllocation method

Type of derivative

Foreign currency forward contracts:
Receivables:
U.S. dollars
Euro
UAE Dirham
Payables:U.S. dollars
Euro
Swiss franc
UAE Dirham
Foreign currency forward contracts:
Receivables:
U.S. dollars
Payables:U.S. dollars
Euro
Total

Principal items hedged

Contract amountContract amountover 1 year

$ 40,632
3,518
33$ 29,787——$  1,363(14)2

36,725208,927
708
20

6,776
180,004——(1,241)(14,613)(35)(2)$ 17,088$  5,186

5,784
828$314,263—
19$221,772

Fair value

Accounts receivable–trade

Accounts payable–trade

Accounts receivable–trade
Accounts payable–trade(Note 2)$(14,540)

Notes: 1. The fair value is estimated based on forward exchange rates.
2. S
 ince amounts in foreign currency forward contracts treated by the allocation method are handled together with accounts receivable-trade and accounts payable-trade that are
subject to hedging, the estimated fair value of such contracts is included in the fair value of accounts receivable-trade or accounts payable-trade.

23 Fuji Electric Report Financials 2016

(2) Interest-rate-related contracts
Millions of yen

2016
Hedge accounting method

Specific treatment forinterest rate swaps

Type of derivative

Interest rate swaps
Receive floating pay fixed

Principal items hedged

Contract amountContract amountover 1 year

Fair value

Long-term loans payable¥11,500¥11,500(Note 2)Millions of yen

2015
Hedge accounting method

Specific treatment forinterest rate swaps

Type of derivative

Interest rate swaps
Receive floating pay fixed

Principal items hedged

Contract amountContract amountover 1 year

Fair value

Long-term loans payable¥20,132¥11,500(Note 2)Thousands of U.S. dollars (Note 3)

2016
Hedge accounting method

Specific treatment forinterest rate swaps

Type of derivative

Interest rate swaps
Receive floating pay fixed

Principal items hedged

Contract amountContract amountover 1 year

$102,679$102,679

Fair value

Long-term loans payable(Note 2)

Notes: 1. The fair value is principally based on the quotes obtained from the correspondent financial institutions.
2. S ince amounts in interest rate swaps which qualify for hedge accounting and meet specific matching criteria are handled together with long-term loans payable that are subject
to hedging, the estimated fair value of such interest rate swaps is included in the fair value of the long-term loans payable.

(3) Commodity-related contracts
Millions of yen

2016
Hedge accounting method

Deferral hedge method

Type of derivative

Commodity swap
Receive floating pay fixed

Principal items hedged

Contract amountContract amountover 1 year

Fair value

Raw materials
¥76

¥—

¥(14)

Millions of yen

2015
Hedge accounting method

Deferral hedge method

Type of derivative

Commodity swap
Receive floating pay fixed

Principal items hedged

Contract amountContract amountover 1 year

Fair value

Raw materials
¥245

¥—

¥(0)

Thousands of U.S. dollars (Note 3)

2016
Hedge accounting method

Deferral hedge method

Type of derivative

Commodity swap
Receive floating pay fixed

Principal items hedged

Contract amountContract amountover 1 year

Fair value

Raw materials
$684

$—

$(130)

Note: The fair value is principally based on the quotes obtained from the correspondent financial institutions.

Fuji Electric Report Financials 201624

Note 9. Short-term Debt and Long-term Debt
Short-term debt as of March 31, 2016 and 2015 consisted of the following:
Millions of yen

Loans, principally from banks
Commercial paper
Short-term debt

Thousands of
U.S. dollars (Note 3)

2016

2015

2016

¥37,31722,000¥59,317¥48,080
19,000¥67,080$333,196
196,429$529,625

Note: The weighted average interest rates on short-term debt as of March 31, 2016 and 2015 were 0.68% and 0.80%, respectively.

Long-term debt as of March 31, 2016 and 2015 consisted of the following:
Millions of yen

Loans, principally from banks and insurance companies
Bonds issued by the Company:
0.79% Yen unsecured straight bonds due 2015
0.86% Yen unsecured straight bonds due 2016
1.00% Yen unsecured straight bonds due 2017
0.90% Yen unsecured straight bonds due 2018
0.38% Yen unsecured straight bonds due 2020
Zero coupon convertible bonds with stock acquisition rights due 2016
Less: Portion due within one year
Long-term debt

Thousands of
U.S. dollars (Note 3)

2016

2015

2016

¥ 64,926¥ 63,644$   579,703—
20,0005,000
20,00015,000500
125,426
36,977¥ 88,449

15,00020,0005,000
20,000—500
124,144
35,015¥ 89,129—
178,571
44,643
178,571
133,929
4,465
1,119,882
330,155$   789,727

Note: The weighted average interest rates on loans, principally from banks and insurance companies, as of March 31, 2016 and 2015 were 0.67% and 0.71%, respectively.

As of March 31, 2016, the aggregate annual maturities of long-term debt were as follows:
Years ending March 31,

2018
2019
2020
2021
2022 thereafter
Total

Millions of yen

Thousands of
U.S. dollars (Note 3)¥30,462
21,70419,80916,45618¥88,449$271,986
193,794
176,869
146,937
141$789,727

Note 10. Lease Obligations
Lease obligations as of March 31, 2016 and 2015 consisted of the following:
Millions of yen

Short-termLong-term
Total

Thousands of
U.S. dollars (Note 3)

2016

2015

2016

¥11,970
23,498¥35,468¥12,988
22,260¥35,248$106,881
209,804$316,685

Millions of yen

Thousands of
U.S. dollars (Note 3)¥ 8,280
6,153
4,505
2,986
1,574
¥23,498$ 73,935
54,94040,23026,661
14,038$209,804

Note: The weighted average interest rates on lease obligations as of March 31, 2016 and 2015 were 2.08% and 2.17%, respectively.

As of March 31, 2016, the aggregate annual maturities of lease obligations were as follows:
Years ending March 31,

2018
2019
2020
2021
2022 thereafterTotal

25 Fuji Electric Report Financials 2016

Note 11. Retirement Benefits
1. Outline of retirement benefits for employees
The Company and most of its consolidated subsidiaries have either
funded or unfunded defined benefit plans and defined contribution
pension plans.
Defined benefit corporate pension plans are all funded and coversubstantially all employees who are entitled to lump-sum or annuity
payments determined by reference to their basic rates of pay andlength of service. In addition, retirement benefit trust has been
established in certain pension plans.
Lump-sum payment plans are either unfunded or funded as aresult of establishing retirement benefit trust. They cover substantiallyall employees who are entitled to lump-sum payments determinedby reference to either points obtained with interest credits or theirbasic rates of pay and length of service.
Certain domestic consolidated subsidiaries adopted a simplified
method in the calculation of net defined benefit liability and retirement benefit expense. Certain domestic consolidated subsidiaries
have multiemployer pension plans accounted for by the same
methods used for defined contribution pension plans because theycannot reasonably calculate their portion of pension assets corresponding to their contributions.

2. Information on defined benefit pension plans(1) The changes in the retirement benefit obligation except for plans accounted for by a simplified method during the years ended
March 31, 2016 and 2015 were as follows:
Thousands of
U.S. dollars (Note 3)

Millions of yen

Retirement benefit obligation at the beginning of the year
Cumulative effect of changes in accounting policies
Restated retirement benefit obligation at the beginning of the year
Service cost
Interest cost
Actuarial loss
Retirement benefits paid
OthersRetirement benefit obligation at the end of the year

2016

2015

2016

¥204,926—
204,926
3,271
2,816
3,057
(15,615)
9¥198,464¥187,555
24,427
211,982
3,211
2,903
769
(13,958)
19¥204,926$1,829,704—
1,829,704
29,21025,14527,301(139,421)
67$1,772,006(2) The changes in plan assets at fair value except for plans accounted for by a simplified method during the years ended
March 31, 2016 and 2015 were as follows:
Thousands of
U.S. dollars (Note 3)

Millions of yen

Plan assets at fair value at the beginning of the year
Expected return on plan assets
Actuarial gainContributions by the Companies
Retirement benefits paid
OthersPlan assets at fair value at the end of the year

2016

2015

2016

¥218,789
3,652(52,064)
7,429(9,985)
1¥167,822¥186,844
3,469
30,716
7,277(9,521)
4¥218,789$1,953,481
32,611(464,861)
66,333(89,160)
10$1,498,414(3) The changes in net defined benefit liability calculated by a simplified method during the years ended March 31, 2016 and2015 were as follows:
Thousands of
U.S. dollars (Note 3)

Millions of yen

Net defined benefit liability at the beginning of the year
Cumulative effect of changes in accounting policies
Restated net defined benefit liability at the beginning of the year
Retirement benefit expenses
Retirement benefits paid
Contributions
OthersNet defined benefit liability at the end of the year

2016

2015

2016

¥2,278
—
2,278
431
(61)
(245)
60
¥2,463¥2,262
224
2,486
151
(66)
(295)
2
¥2,278$20,340—
20,3403,854(549)(2,188)543$22,000

Fuji Electric Report Financials 201626

(4) The reconciliation of retirement benefit obligation and plan assets at fair value with net defined benefit liability and net defined
benefit asset recognized in the consolidated balance sheet were outlined as follows:

Thousands of
U.S. dollars (Note 3)

Millions of yen

2016

2015

2016

Unfunded retirement benefit obligation
Net amount of liabilities and assets recognized in the consolidated balance sheet¥ 198,581(171,553)
27,0286,078¥   33,106¥ 205,188(222,422)(17,234)
5,649¥  (11,585)$ 1,773,050(1,531,724)
241,326
54,266$   295,592

Net defined benefit liability
Net defined benefit asset
Net amount of liabilities and assets recognized in the consolidated balance sheet

50,729(17,623)¥  33,106

32,518(44,103)¥  (11,585)

452,942(157,350)$   295,592

Funded retirement benefit obligation
Plan assets at fair value

Note : Pension plans accounted for by a simplified method are included.

(5) The components of retirement benefit expenses for the years ended March 31, 2016 and 2015 were as follows:
Millions of yen

Service cost
Interest cost
Expected return on plan assets
Amortization of actuarial loss
Amortization of prior service cost
Retirement benefit expenses calculated by simplified method
OthersRetirement benefit expenses

Thousands of
U.S. dollars (Note 3)

2016

2015

2016

¥ 3,271
2,816(3,652)
4,846
(569)
431
141
¥ 7,284¥ 3,2112,903(3,469)
7,096
(607)
151
241
¥ 9,526$ 29,210
25,145(32,611)43,273(5,082)
3,854
1,254$ 65,043(6) The components of remeasurements of defined benefit plans included in other comprehensive income (before tax effect) for theyears ended March 31, 2016 and 2015 were as follows:
Thousands of
U.S. dollars (Note 3)

Millions of yen

Prior service cost
Actuarial gain and loss
Total

2016

2015

2016

¥   569
50,272¥50,841¥    607(37,032)¥(36,425)$  5,082
448,859$453,941(7) The components of remeasurements of defined benefit plans included in accumulated other comprehensive income(before tax effect) as of March 31, 2016 and 2015 were as follows:

Thousands of
U.S. dollars (Note 3)

Millions of yen

Unrecognized prior service cost
Unrecognized actuarial gain and loss
Total

2016

2015

2016

¥ (6,752)
36,363¥29,611¥ (7,321)(13,909)¥(21,230)$ (60,286)
324,671$264,385(8) The breakdown of plan assets by major category as of March 31, 2016 and 2015 were as follows:
Equity securities
Debt securities
General accounts at life insurance companies
Others
Total

2016

2015

46%
39
14
1
100%

60%
29
10
1
100%

Note: Retirement benefit trust established for the corporate pension plans is included and equivalent to 17% of total amount of plan assets as of March 31, 2016 and 27% as of March 31, 2015.

The long-term expected rates of return on plan assets has been determined as a result of consideration of both the portfolio allocation
at present and in the future, and long-term rates of return from multiple plan assets at present and in the future.
(9) The assumptions used in accounting for the defined benefit plans as of March 31, 2016 and 2015 were as follows:
Discount rates
Long-term expected rates of return on plan assets
Expected rates of salary increase

27 Fuji Electric Report Financials 2016

2016

2015

0.27% – 1.40%
Mainly 2.5%
2.2% – 8.6%

0.99% – 1.50%
Mainly 2.5%
2.1% – 8.5%

3. Information on defined contribution pension plans
Contributions to defined contribution pension plans for the years ended March 31, 2016 and 2015 were ¥4,635 million ($41,386 thousand)and ¥4,406 million, respectively.

4. Information on multiemployer pension plans
Contributions to multiemployer pension plans accounted for by the same methods used for defined contributions plans for the years ended
March 31, 2016 and 2015 were ¥50 million ($453 thousand) and ¥76 million, respectively.

Note 12. Shareholders’ Equity
1. Shares issued and outstanding / Treasury stock
The Companies Act of Japan provides that an amount equal to 10% of the amount to be disbursed as distributions of capital surplus(other than the capital reserve) and retained earnings (other than the legal reserve) be transferred to the capital reserve and the legal reserve,
respectively, until the sum of the capital reserve and the legal reserve equals 25% of the capital stock account. Such distributions can bemade at any time by resolution of the shareholders or by the Board of Directors if certain conditions are met.
Movements in shares outstanding and treasury stock during the years ended March 31, 2016 and 2015 were as follows:
Thousands of shares
March 31, 2015

Shares outstanding:Common stock
Total
Treasury stock:
Common stock
Total

Increasein the year

Decreasein the year

March 31, 2016

746,484
746,484————

746,484
746,484

32,05732,05755
55

3
3

32,10932,109Thousands of shares
March 31, 2014

Shares outstanding:Common stock
Total
Treasury stock:
Common stock
Total

Increasein the year

Decreasein the year

March 31, 2015

746,484
746,484————

746,484
746,484

31,98531,9857474

2
2

32,05732,057The increases of treasury stock were due to purchases of shares of less than one voting unit and the decreases of treasury stock were
due to sales of shares at the request of shareholders who own less than one voting unit for the years ended March 31, 2016 and 2015.

2. Dividends(1) Dividends paid
For the year ended March 31, 2016
Total dividends
Total dividends (thousands of U.S.
Type of shares (millions of yen) dollars (Note 3))

Resolution

Meeting of the Board of
Directors on May 26, 2015
Meeting of the Board of
Directors on October 29, 2015

Commonstock
Commonstock

Dividends
per share(yen)

Dividends per share(U.S. dollars (Note 3))

Cut-off date

Effective date

¥5.0

$0.04

March 31, 2015

June 8, 2015

0.04

September 30,
2015

December 3,
2015

Dividends per share (yen)Cut-off date

Effective date

¥2,857¥4.0

March 31, 2014

June 9, 2014

2,857

4.0

September 30,
2014

December 3,
2014¥3,572$31,894

3,572

31,894

5.0

For the year ended March 31, 2015
Total dividends
Type of shares (millions of yen)

Resolution

Meeting of the Board of
Directors on May 27, 2014
Meeting of the Board of
Directors on October 30, 2014

Commonstock
Commonstock(2) Dividends with the cut-off date in the year ended March 31, 2016 and effective date in the year ending March 31, 2017
Resolution

Meeting of the Board of
Directors on May 26, 2016

Total dividends
Type of shares (millions of yen)

Commonstock¥3,571

Total dividends(thousands of U.S.
dollars (Note 3))$31,892

Source ofdividends

Retainedearnings

Dividends
per share(yen)

Dividends
per share (U.S.
dollars (Note 3))

¥5.0

$0.04

Cut-off date

Effective date

March 31,2016

June 8,2016

Dividends with the cut-off date in the year ended March 31, 2015 and effective date in the year ended March 31, 2016
Resolution

Total dividends
Type of shares (millions of yen)

Meeting of the Board of
CommonDirectors on May 26, 2015stock

¥3,572

Source of dividends

Retained earnings

Dividends per share (yen)Cut-off date

Effective date

¥5.0

March 31,2015

June 8,2015

Fuji Electric Report Financials 201628

Note 13. Research and Development Costs
Research and development costs charged to income were ¥35,949 million ($320,973 thousand) and ¥35,023 million for the years ended
March 31, 2016 and 2015, respectively.
Millions of yen

Research and development costs

Thousands of
U.S. dollars (Note 3)

2016

2015

2016

¥35,949¥35,023$320,973

Note 14. Selling, General and Administrative Expenses
Major components of selling, general and administrative expenses for the years ended March 31, 2016 and 2015 were as follows:
Millions of yen

Salaries and wages
Retirement benefit expenses
Research and development costs

Thousands of
U.S. dollars (Note 3)

2016

2015

2016

¥73,621
4,729
30,766¥71,558
5,367
29,421$657,334
42,229274,702

Note 15. Extraordinary Income, Net
Extraordinary income, net, for the years ended March 31, 2016 and 2015 were as follows:
Millions of yen

Thousands of
U.S. dollars (Note 3)

2016

2015

2016

Extraordinary income
Gain on sales of noncurrent assets
Gain on sales of investment securities
Gain on change in equity¥   9892,351—¥     81
2,778
4,843

$ 8,834
20,993—Extraordinary loss
Loss on disposal of noncurrent assets
Loss on devaluation of investment securities
Impairment loss
Settlement package
Loss on liquidation of subsidiaries
OthersExtraordinary income, net

(775)
(167)
(282)
(640)
(470)
(54)
¥   952

(880)
(447)
(2,830)
(810)
—
(155)
¥ 2,580(6,924)(1,491)(2,522)(5,721)(4,203)(459)$ 8,507

29 Fuji Electric Report Financials 2016

Note 16. Income Taxes
1. The components of income taxes for the years ended March 31, 2016 and 2015 were as follows:
Thousands of
U.S. dollars (Note 3)

Millions of yen

Current
DeferredIncome taxes

2016

2015

2016

¥ 9,600
3,098¥12,698¥ 9,612
5,307¥14,919$ 85,722
27,651$113,373

The Company and its domestic consolidated subsidiaries are subject to corporate income tax, prefectural and municipal inhabitants’taxes and enterprise tax, based on income.

2. The significant components of deferred tax assets and liabilities as of March 31, 2016 and 2015 were as follows:
Thousands of
U.S. dollars (Note 3)

Millions of yen

Deferred tax assets
Net defined benefit liability
The investment deduction of the foreign consolidated subsidiaries
Investment securities
Inventories
Accrued employees’ bonuses
Tangible fixed assets
Tax loss carryforwards
Other
Gross deferred tax assets
Less: Valuation allowance
Total deferred tax assets
Deferred tax liabilities
Gain on securities contribution to employee retirement benefit trust
Unrealized gain on other securities
Investment securities
Other
Gross deferred tax liabilities
Net deferred tax assets (liabilities)

2016

2015

2016

¥ 33,414
16,481
6,880
6,528
6,306
2,059
1,950
6,275
79,893(25,132)
54,761¥ 20,934
19,741
7,727
5,596
6,496
2,641
3,747
5,788
72,670(28,894)
43,776$ 298,340
147,156
61,43258,28756,30818,384
17,42056,022
713,349(224,398)
488,951(16,096)(13,545)(4,912)(1,297)(35,850)¥ 18,911(17,030)(33,007)(5,188)(1,363)(56,588)¥(12,812)(143,717)(120,942)(43,858)(11,580)(320,097)$ 168,854

3. The reconciliation between the statutory income tax rate and the effective income tax rate for the years ended
March 31, 2016 and 2015 were as follows:
Statutory income tax rate
Tax rate difference of overseas consolidated subsidiaries
Permanent difference resulting from non-taxable income, including dividends received
Tax credits
Valuation allowance
Decrease in deferred tax assets due to the revision of statutory income tax rate
Permanent difference resulting from expenses not deductible for income tax purposes
Other
Effective income tax rate

2016

2015

33.1%
(3.9)
(3.2)
(2.6)
(1.9)
3.0
1.7
1.1
27.3%

35.6%
(1.7)
(1.3)
(5.9)
(4.1)
5.0
2.9
2.1
32.6%

4. Revision of the amount of deferred tax assets / liabilities by change in Corporate Tax Rate
The “Act for Partial Amendment of the Income Tax Act, etc.” (Act No. 15 of 2016) and the “Act for Partial Amendment of the Local Tax Act,etc.” (Act No. 13 of 2016) were promulgated on March 29, 2016. The corporate tax rates are to be lowered from the fiscal year beginning
April 1, 2016. Accordingly, the effective statutory tax rate for the calculation of deferred tax assets and liabilities will be lowered from 32.3%
to 30.9% for temporary differences expected to be utilized in the fiscal years beginning April 1, 2016 and 2017, and to 30.6% for fiscal years
beginning April 1, 2018 and onwards.
As a result of these changes, deferred tax assets (after deducting deferred tax liabilities) as of March 31, 2016 decreased by¥1,241 million ($11,087 thousand).
Deferred income taxes and valuation difference on available-for-sale securities increased by ¥1,419 million ($12,675 thousand) and¥706 million ($6,304 thousand), respectively. Remeasurements of defined benefit plans included in accumulated other comprehensive
income decreased by ¥505 million ($4,511 thousand).
Fuji Electric Report Financials 201630

Note 17. Consolidated Statements of Comprehensive Income
Amounts reclassified to profit (loss) in the current period that were recognized in other comprehensive income in the current or previous
periods and the tax effects for each component of other comprehensive income were as follows:
Thousands of
U.S. dollars (Note 3)

Millions of yen

Valuation difference on available-for-sale securities:
Amount arising during the year
Reclassification adjustments
Before tax effectTax effect
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges:
Amount arising during the year
Asset acquisition cost adjustments
Before tax effectTax effect
Deferred gains or losses on hedges
Foreign currency translation adjustments:
Amount arising during the year
Reclassification adjustments
Before tax effectTax effectForeign currency translation adjustments
Remeasurements of defined benefit plans:
Amount arising during the year
Reclassification adjustments
Before tax effectTax effectRemeasurements of defined benefit plans
Share of other comprehensive income of associates accounted for using equity method:Amount arising during the year
Reclassification adjustments
Share of other comprehensive income of associates accounted forusing equity method
Total other comprehensive income

31 Fuji Electric Report Financials 2016

2016

2015

2016

¥(56,295)(2,283)(58,578)
19,283(39,295)¥ 35,727(2,537)33,190(8,459)24,731$(502,640)(20,383)(523,023)
172,173(350,850)

(896)
21
(875)
253
(622)

(796)
1
(795)
264
(531)

(8,004)190(7,814)
2,258(5,556)(8,300)—(8,300)—(8,300)

8,785
—
8,785
—
8,785

(74,111)—(74,111)—(74,111)(55,118)
4,278(50,840)
15,926(34,914)29,937
6,488
36,425(12,284)
24,141(492,133)
38,192(453,941)
142,205(311,736)

(622)
102

392
127

(5,554)
905

(520)

519

(4,649)¥(83,651)¥ 57,645$(746,902)

Note 18. Contingent Liabilities
Contingent liabilities as of March 31, 2016 and 2015 were as follows:
Thousands of
U.S. dollars (Note 3)

Millions of yen

Guarantees

2016

2015

¥8,781¥13,718

2016$78,406

Note 19. Leases
1. Finance lease transactions(1) Leased assets
Leased assets primarily consist of machinery and equipment and software.
(2) Depreciation method for leased assets
Finance leases other than those that were deemed to transfer the ownership of the leased assets to the lessees and contracted before
April 1, 2008, are accounted for by the method that is applicable to ordinary operating leases.
Pro forma information of those leased property such as acquisition cost, accumulated depreciation, accumulated impairment loss,
obligations under finance leases, lease expense, depreciation expense, interest expense and impairment loss on an “as if capitalized” basis
for the years ended March 31, 2016 and 2015 were as follows:(a) Acquisition cost and accumulated depreciation under finance leases:
Thousands of
U.S. dollars (Note 3)

Millions of yen

Acquisition cost
Accumulated depreciation
Net leased property

2016

2015

2016

¥1,904
1,463¥   441¥2,324
1,693¥   631$17,005
13,063$ 3,942(b) Obligations under finance leases:
Thousands of
U.S. dollars (Note 3)

Millions of yen

2016

Due within one year
Due after one year
Total

2015

¥214
529
¥743

¥166
363
¥529

2016

$1,491
3,233$4,724(c) Lease expense, depreciation expense and interest expense under finance leases:
Thousands of
U.S. dollars (Note 3)

Millions of yen

2016

Lease expense
Depreciation expense
Interest expense

2015

¥599
408
31

¥228
184
20

2016

$2,0401,646183(d) Method of calculating estimated depreciation expense
Depreciation is computed by the straight-line method over the lease period assuming no residual value.
(e) Method of calculating estimated interest expense
Interest expense is computed and allocated to each period using the interest method assuming interest expense to be the excess of totallease payments over the acquisition cost.

2. Operating lease transactions
The minimum rental commitments under noncancellable operating leases as of March 31, 2016 and 2015 were as follows:
Thousands of
U.S. dollars (Note 3)

Millions of yen

Due within one year
Due after one year
Total

2016

2015

2016

¥1,791
2,055¥3,846¥1,4903,135¥4,625$15,992
18,352$34,344

Fuji Electric Report Financials 201632

Note 20. Segment Information
1. Segment information(1) Outline of reporting segments
The Companies’ reporting segments are components for which
separate financial information is available and whose operating
results are reviewed regularly by the Board of Directors of theCompany in order to make decisions about resource allocation andto assess performance. The Company has business headquarters
by products and services at its head office. The business headquarters prepare comprehensively global strategies related to theirproducts and services and control their business activities.

Accordingly, the Companies have five reporting segments,
principally based on the business headquarters, that take into
account the similarity of category and nature of products and services:Power and Social Infrastructure, Industrial Infrastructure, PowerElectronics, Electronic Devices and Food and Beverage Distribution.
These segments consist of 2 or more business segments.
As of April 1, 2015, reflecting change of organization structure,
the reporting segments were reclassified in Power and Social
Infrastructure, Industrial Infrastructure, and Power Electronics. The
reporting segment information for the year ended March 31, 2015
has been reclassified to reflect this change.

Main products and services of each reporting segment consisted of the following:
Reporting segments

Main products and services

Power and Social Infrastructure

Thermal/geothermal/hydraulic power generation, solar power generation systems, fuel cells,
energy management systems, smart meter, information systems

Industrial Infrastructure

Substation equipment, industrial power supply facility, industrial drive systems, plant control systems,
industrial energy management systems, data centers, measuring instruments and sensors, radiation
monitoring systems, electrical equipment and air conditioning construction

Power Electronics

Inverters/servos, motors, railcar systems, uninterruptible power systems (UPSs),
power conditioning sub-systems (PCSs), switchboards, power distribution and control equipment

Electronic Devices

Power semiconductors, photoconductors, magnetic disks

Food and Beverage Distribution

Beverage vending machines, vending machines for food and other goods, store equipment,
currency handling equipment(2) Calculation method of net sales, profit or loss, assets, liabilities and other items on each reporting segment
The accounting policies applied by each reporting segment are consistent with those described in “Note 2. Summary of Significant
Accounting Policies.” Segment profit or loss presented in segment information is calculated based on operating income in the consolidated
statements of income. Intersegment sales and transfer are determined by market value.

33 Fuji Electric Report Financials 2016

(3) Information on net sales, profit or loss, assets, liabilities and other items by each reporting segment
Reporting segment information as of March 31, 2016 and 2015 and for the years then ended were as follows:
Millions of yen
Power andSocialInfrastructure

Industrial
Infrastructure

PowerElectronics

Electronic
Devices

Food andBeverageDistribution

OthersSales to third parties
Inter-segment sales andtransfers¥174,007¥198,551¥175,847¥116,155¥114,400¥34,590

1,481

3,408

27,125

3,691

587

27,99764,289(64,289)—

Total sales

175,488

201,959

202,972

119,846

114,987

62,587

877,839(64,289)

813,550

Year ended March 31, 2016

Total

Adjustments

Consolidated¥813,550¥      —

¥813,550

Sales, profits or losses andassets by reporting
segments
Net sales

Segment profits (losses)¥  9,736¥ 12,966¥  7,755¥  9,863¥  7,825¥ 2,336¥ 50,481¥ (5,475)¥ 45,006

Segment assets¥125,265¥189,967¥183,742¥147,355¥ 73,908¥30,787¥751,024¥ 94,354¥845,378¥ 28,668¥  1,055¥ 29,723

Other items
Depreciation and amortization
Investments for companies
applied equity method¥  2,042¥  2,801¥  6,228¥ 13,938¥  2,833¥   826¥      —

¥ 13,274¥      —

¥      —

¥      —

¥     —

¥ 13,274¥      —

¥ 13,274

Capital expenditures¥  2,370¥  3,210¥  8,362¥ 11,863¥  2,589¥   559¥ 28,953¥  5,326¥ 34,279

Total

Adjustments

Consolidated¥810,678¥      —

¥810,678

Millions of yen
Power andSocialInfrastructure

Industrial
Infrastructure

PowerElectronics

Electronic
Devices

Food andBeverageDistribution

OthersSales to third parties
Inter-segment sales andtransfers¥167,477¥187,264¥174,123¥130,772¥118,824¥32,218

1,711

4,093

26,7896,417

289

28,99068,289(68,289)—

Total sales

169,188

191,357

200,912137,189

119,113

61,208878,967(68,289)

810,678

Year ended March 31, 2015

Sales, profits or losses andassets by reporting
segments
Net sales

Segment profits (losses)¥  7,786¥ 11,142¥  7,581¥  8,071¥  8,527¥ 1,884¥ 44,991¥  (5,675)¥ 39,316

Segment assets¥127,613¥167,776¥179,899¥166,063¥ 70,480¥34,413¥746,244¥158,278¥904,522

Depreciation and amortization
Investments for companies
applied equity method¥  1,971¥  2,371¥  5,787¥ 18,944¥  2,877¥   768¥ 32,718¥    897¥ 33,615¥      —

¥ 13,008¥      —

¥      —

¥      —

¥     —

¥ 13,008¥      —

¥ 13,008

Capital expenditures¥  2,829¥  3,071¥ 10,504¥ 10,849¥  3,069¥   685¥ 31,007¥  2,666¥ 33,673

Total

Adjustments

Consolidated

Other items

Thousands of U.S. dollars (Note 3)
Power andSocialInfrastructure

Industrial
Infrastructure

PowerElectronics

Electronic
Devices

Food andBeverageDistribution

Sales to third parties
Inter-segment sales andtransfers$1,553,639$1,772,782$1,570,068$1,037,106$1,021,432

13,21830,423242,188

32,951

5,240

249,996574,016(574,016)—

Total sales

1,566,857

1,803,205

1,812,256

1,070,057

1,026,672

558,812

7,837,859(574,016)

7,263,843

Segment profits (losses)$   86,934$  115,770$   69,243$   88,065$   69,869$ 20,851 $  450,732$ (48,890) $  401,842

Segment assets$1,118,446$1,696,140$1,640,557$1,315,673$  659,897$274,853 $6,705,566$ 842,455 $7,548,021

Depreciation and amortization
Investments for companies
applied equity method$   18,240$   25,015$   55,611$  124,450$   25,303$  7,349 $  255,968$   9,422 $  265,390$       —

$  118,524$        
—$        
—$        
—$      
— $  118,524$      — $  118,524

Capital expenditures$   21,163$   28,666$   74,669$  105,921$   23,121$  4,964 $  258,504$   47,562 $  306,066

Year ended March 31, 2016

OthersSales, profits or losses andassets by reporting
segments
Net sales$308,816 $7,263,843$      — $7,263,843

Other items

Fuji Electric Report Financials 201634

Notes: 1.	Others segment consisted of business segments not attributable to reporting segments and included financial services, real estate operations, insurance agency services, travel
agency services, printing and information services, etc.
2. The adjustments for segment information above were as follows:
Thousands of
U.S. dollars(Note 3)

Millions of yen

Corporate expense*

2016

2015

2016

¥(5,482)¥(5,739)$(48,955)

Elimination of intersegment sales
Total

7

64

66

¥(5,475)¥(5,675)$(48,890)

	* Corporate expense mainly consisted of administration cost of the Company.
Thousands of
U.S. dollars(Note 3)

Millions of yen

Corporate assets*
Elimination of intersegment transactions
Total

2016

2015

2016

¥ 264,764¥ 316,153$ 2,363,969(170,410)(157,875)(1,521,514)¥   94,354¥ 158,278$    842,455	* Corporate assets mainly consisted of invested cash surpluses (cash and cash equivalents), long-term invested assets(investment securities), assets relating to administration department and assets of a financing subsidiary company.
3. Segment profits (losses) were reconciled to operating income (loss) in the consolidated statements of income.

2. Related information
Related information as of March 31, 2016 and 2015 and for the years then ended were as follows:
Geographic information(a) Sales
Millions of yen

Japan
Asia (except for China), Others
China
EuropeAmerica
Consolidated

Thousands of
U.S. dollars (Note 3)

2016

2015

2016

¥597,757
103,873
82,63016,681
12,609¥813,550¥605,763
85,18187,733
16,51915,482¥810,678$5,337,123
927,416
737,773
148,942
112,589$7,263,843

Note: Net sales information above is based on customer location.

(b) Tangible fixed assets
Millions of yen

Japan
Asia (except for China), Others
China
EuropeAmerica
Consolidated

Thousands of
U.S. dollars (Note 3)

2016

2015

2016

¥136,614
26,375
12,518714
255¥176,476¥131,374
27,96814,815624
172¥174,953$1,219,772
235,482
111,769
6,379
2,282$1,575,684

3. Information on impairment loss of fixed assets by each reporting segment
Information on impairment loss of fixed assets by each reporting segment for the years ended March 31, 2016 and 2015 were as follows:
Millions of yen

2016Power and Social Infrastructure
Industrial Infrastructure
Power Electronics
Electronic Devices
OthersTotal

35 Fuji Electric Report Financials 2016

¥ 26
—
256
—
—
¥282

Thousands of
U.S. dollars (Note 3)

2015

2016

¥    7
373
1
2,265
184
¥2,830$  237—2,285——$2,522

4. Information on amortization of goodwill and unamortized balance by each reporting segment
Information on amortization of goodwill and unamortized balance by each reporting segment for the year ended March 31, 2016 was
as follows:
Millions of yen

Year ended March 31, 2016

Power andSocialInfrastructure

Industrial
Infrastructure

PowerElectronics

Electronic
Devices

Amortization
Balance as of March 31¥—¥—¥   196¥1,524¥   308¥1,349¥ 63¥165

Year ended March 31, 2016

Power andSocialInfrastructure

Industrial
Infrastructure

PowerElectronics

Electronic
Devices

Amortization
Balance as of March 31$—$—$ 1,756$13,610$ 2,759$12,047$  552$1,468

Food and Beverage
Distribution¥—¥—

OthersConsolidated¥—¥—¥   567¥3,038OthersConsolidated$—$—$ 5,067$27,125

Thousands of U.S. dollars (Note 3)
Food and Beverage
Distribution$—$—

Note: Information for the year ended March 31, 2015 was not disclosed because it did not have significant impact on the consolidated financial statements.

5. Information on gain on negative goodwill by each reporting segment
None

Fuji Electric Report Financials 201636

Note 21. Information on Transactions with Related Parties
For the year ended March 31, 2016
None

Note 22. Business Combinations
For the year ended March 31, 2016, business combinations have not been disclosed because they do not have significant impact on the
consolidated financial statements.

Note 23. Asset Retirement Obligations
Asset retirement obligations recorded on the consolidated balance sheets
1. Outline of asset retirement obligations
The Companies record asset retirement obligations related to the expenses for removing asbestos from company-owned buildings upon
their dismantlement and the obligations to restore head offices, sales offices and other premises to their original condition upon terminationof their lease contracts.
Regarding some of the obligations to restore head offices, sales offices and other premises to their original condition, the Companies
estimate nonrecoverable amounts of deposits for those premises and record the portion attributable to the current year as expenses,
instead of recording asset retirement obligations.

2. Calculation method of asset retirement obligations
In calculating the amounts of asset retirement obligations, the Companies estimate a period of use between 4 and 49 years and use a
discount rate equivalent to the interest rate of government bonds corresponding to the use period (0.2% to 2.3%).

3. Changes in the total amounts of asset retirement obligations
Changes in the total amounts of asset retirement obligations for the years ended March 31, 2016 and 2015 were as follows:
Millions of yen

Balance at the beginning of the year
Increase due to acquisition of property, plant and equipment
Adjustment due to passage of time
Decrease due to fulfillment of obligations
Balance at the end of the year

Thousands of
U.S. dollars (Note 3)

2016

2015

2016

¥2,1572
8(118)¥2,049¥2,204—8(55)¥2,157$19,259
22
75(1,059)$18,297

Note 24. Amounts Per ShareInformation of amounts per share as of March 31, 2016 and 2015 and for the years then ended were as follows:Yen

Net assets per share
Net income per share
Diluted net income per share

Note 25. Subsequent Events
For the year ended March 31, 2016
None

37 Fuji Electric Report Financials 2016

U.S. dollars (Note 3)

2016

2015

¥322.52
42.90
42.86

¥406.39
39.16
39.13

2016

$2.8800.383
0.383

Independent Auditor’s Report

Fuji Electric Report Financials 201638

Gate City Ohsaki, East Tower,
11-2, Osaki 1-chome, Shinagawa-ku, Tokyo 141-0032, Japan
Contacts: Public and Investor Relations Dept.
TEL: +81-3-5435-7111 http://www.fujielectric.com/

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