Consolidated Financial Statements 2020
As of and for the Year Ended February 29, 2020,and Independent Auditor’s ReportI n d e p e n d e n t A u d i t o r ’s R e p o r t

1Consolidated Balance Sheet
FURUNO ELECTRIC CO., LTD. and Consolidated Subsidiaries
February 29, 2020

ASSETS

Millions of Yen
2020
2019

Thousands of
U.S. Dollars(Note 1)
2020

CURRENT ASSETS:
Cash and cash equivalents (Note 12)¥11,675

Short-term investments (Notes 3 and 12)467¥11,232 $106,689
773

4,267

Notes receivable—trade (Note 12)

1,251

1,751

11,431

Accounts receivable—trade (Note 12)

14,741

15,302

134,707

Electronically recorded receivables—operating (Note 12)

1,598

891

14,602

Allowance for doubtful receivables (Note 12)

(395)

(497)

(3,609)25,06728,174

229,068

Inventories (Note 5)
Other current assets

2,070

3,052

18,91656,47760,679516,101

Land

3,582

3,440

32,733
123,275

Total current assets
PROPERTY, PLANT AND EQUIPMENT—NET (Notes 6 and 7):
Buildings and structures

13,49013,424

Machinery and equipment

4,342

4,228

39,678

Furniture and fixtures

11,058

10,716

101,050

Right-of-use assets

1,120

Construction in progress
Total
Accumulated depreciation
Property, plant and equipment—net

10,234

219

141

2,001

33,814

31,950309,001(23,661)(22,857) (216,220)

10,152

9,093

92,771

Investment securities (Notes 4 and 12)

1,587

1,809

14,502

Investments in unconsolidated subsidiaries andassociated companies (Note 12)

1,003

974

9,165

Goodwill

481

523

4,395

Asset for retirement benefits (Note 8)

922

565

8,425

Insurance funds

529

666

4,834

Software (Note 6)

3,664

3,843

33,482INVESTMENTS AND OTHER ASSETS:

Deferred tax assets (Note 10)
Other assets (Note 6)
Total investments and other assets
TOTAL

245

203

2,238

1,068

862

9,759

9,502

9,450

86,831¥76,133

See notes to consolidated financial statements.

2¥79,223 $695,723

LIABILITIES AND EQUITY

Thousands of
U.S. Dollars(Note 1)
2020

Millions of Yen
2020
2019

CURRENT LIABILITIES:
Short-term bank loans (Notes 7 and 12)¥   206

Current portion of long-term debt (Notes 7 and 12)

3,000

Notes payable—trade (Note 12)¥ 2,002 $  1,882
3,480

27,414

201

218

1,836

Accounts payable—trade (Note 12)

2,332

3,420

21,310Electronically recorded obligations—operating (Note 12)

6,493

7,886

59,334

428

364

3,911

1,657

1,762

15,142

Accrued product warranty costs

1,108

1,000

10,125

Other current liabilities (Note 7)

7,001

6,001

63,97622,42926,138204,962

Long-term debt (Notes 7 and 12)

6,700

7,500

61,226

Liability for retirement benefits (Note 8)—Employees

2,872

2,821

26,245

154

154

1,407

Deferred tax liabilities (Note 10)

484

456

4,422

Other long-term liabilities (Note 7)

1,246

614

11,386

11,45911,545

104,715

Income taxes payable
Accrued employees’ bonuses

Total current liabilities
LONG-TERM LIABILITIES:Long-term accounts payable

Total long-term liabilities
COMMITMENTS AND CONTINGENT LIABILITIES (Notes 13 and 14)
EQUITY (Note 9):
Common stock—authorized,
120,000 thousand shares; issued,

7,534

7,534

68,847

Capital surplus

31,894 thousand shares for both 2020 and 2019

10,074

10,074

92,058Retained earnings

27,59826,345

252,197

(203)

(202)

(1,855)

310

501

2,832

Treasury stock—at cost,
383 thousand shares in 2020 and 2019
Accumulated other comprehensive income:Unrealized gain on available-for-sale securities
Deferred loss on derivatives under hedge accounting
Foreign currency translation adjustments
Defined retirement benefit plans
Total
Noncontrolling interests
Total equity
TOTAL

3

(5)
(2,687)(2,102)(24,554)

(702)

(953)

(6,415)41,92541,191

383,121

319

347

2,915

42,244

41,539386,036¥76,133¥79,223 $695,723

Consolidated Statement of Income
FURUNO ELECTRIC CO., LTD. and Consolidated Subsidiaries
Year Ended February 29, 2020

Thousands of
U.S. Dollars(Note 1)
2020

Millions of Yen
2020
2019

NET SALES¥83,066¥82,108 $759,078

COST OF SALES

54,54150,495498,409

Gross profit

28,524

31,612

260,659

26,113

26,840238,627

2,411

4,771

22,032SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (Note 11)
Operating income
OTHER INCOME (EXPENSES):Interest and dividend income

194

96

1,772

Interest expense

(100)

(108)

(913)

50

84

456

Equity in earnings of an associate accounted for by the equity method

(128)

(62)

(1,169)Subsidy income

Foreign exchange loss

32

82

292

Gain on sales of property, plant and equipment

65

16

593

Gain on sales of investment securities

6

0

54

Loss on sales of property, plant and equipment

(5)

(0)

(45)

Loss on disposal of property, plant and equipment

(29)

(8)

(265)

Loss on impairment of long-lived assets (Note 6)

(65)

(336)

(593)

Surrender value of insurance

59

62

539

Compensation expense(40)

Consignment research income

68

Insurance claim income

(365)
10

621

139

Gain on liquidation of a subsidiary37

Loss on disaster(92)

Other—net
Other income—net
INCOME BEFORE INCOME TAXES

181

183

1,654

288

105

2,631

2,699

4,877

24,664

620

644

5,665

INCOME TAXES (Note 10):
Current
Deferred
Total income taxes
NET INCOME

22

172

201

642

816

5,866

2,057

4,060

18,797

15

34

137

NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTSNET INCOME ATTRIBUTABLE TO OWNERS OF THE PARENT¥ 2,041

PER SHARE OF COMMON STOCK (Note 16):

¥ 4,026 $ 18,651

Yen
2020

Basic net income¥ 64.78

Cash dividends applicable to the year

20.00

See notes to consolidated financial statements.

4

2019

U.S. Dollars
2020¥127.77 $   0.59
25.00

0.18

Consolidated Statement of Comprehensive Income
FURUNO ELECTRIC CO., LTD. and Consolidated Subsidiaries
Year Ended February 29, 2020

Thousands of
U.S. Dollars(Note 1)
2020

Millions of Yen
2020
2019

¥2,057¥4,060$18,797

(190)

(187)

(1,736)

5

(7)

45

Foreign currency translation adjustments

(554)

(879)

(5,062)

Defined retirement benefit plans

250

255

2,284

Share of other comprehensive loss of an associateaccounted for by the equity method

(31)

(4)

(283)

(519)

(823)

(4,742)¥1,537¥3,237$14,045¥1,521¥3,202$13,899

15

34

137

NET INCOME
OTHER COMPREHENSIVE LOSS (Note 15):
Unrealized loss on available-for-sale securities
Deferred gain (loss) on derivatives under hedge accounting

Total other comprehensive loss
COMPREHENSIVE INCOME
TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO:
Owners of the parent
Noncontrolling interests
See notes to consolidated financial statements.

5Consolidated Statement of Changes in Equity
FURUNO ELECTRIC CO., LTD. and Consolidated Subsidiaries
Year Ended February 29, 2020

Thousands

Millions of Yen
Accumulated Other Comprehensive Income

Number of
Shares ofCommonStockCommonOutstanding Stock

BALANCE, MARCH 1, 2018
Changes in scope of consolidation
Net income attributable to owners of the parent
Cash dividends, ¥16.0 per share
Purchase of treasury stock
Net change in the year
BALANCE, FEBRUARY 28, 2019
Net income attributable to owners of the parent
Cash dividends, ¥25.0 per share
Purchase of treasury stock
Net change in the year

31,511BALANCE, FEBRUARY 29, 2020

31,511¥7,534

CapitalSurplusRetained
Earnings¥10,074¥22,536
286
4,026
(504)

(0)
31,511

Unrealized Deferred Loss Foreign
Gain on on Derivatives Currency
DefinedTreasury Available-for- under Hedge Translation Retirement
Stock Sale Securities Accounting Adjustments Benefit Plans¥(202)¥689¥2¥(1,224)

(187)
501

(7)
(5)

(878)
(2,102)

10,074

26,345
2,041
(787)

(0)

(202)

(190)

5

¥10,074¥27,598¥(203)¥310

Total
Equity

¥358

(585)

(28)

¥38,559
286
4,026
(504)
(0)
(828)
41,539
2,041
(787)
(0)
(548)

¥(2,687)¥(702) ¥41,925¥319¥42,244

Noncontrolling
Interests

Total
Equity(0)¥7,534

Noncontrolling
Interests¥(1,209) ¥38,201
286
4,026
(504)
(0)
255
(817)
(953) 41,191
2,041
(787)
(0)
250
(519)

(0)
7,534

Total

(10)
347

Thousands of U.S. Dollars (Note 1)
Accumulated Other Comprehensive Income

CommonStockCapitalSurplusRetained
Earnings

BALANCE, FEBRUARY 28, 2019
Net income attributable to owners of the parent
Cash dividends, $0.22 per share
Purchase of treasury stock
Net change in the year

$68,847$92,058 $240,747
18,651(7,191)BALANCE, FEBRUARY 29, 2020

$68,847

Unrealized Deferred Loss Foreign
Gain on on Derivatives Currency
DefinedTreasury Available-for- under Hedge Translation Retirement
Stock Sale Securities Accounting Adjustments Benefit Plans$(1,845)$4,578$(45) $(19,208)(1,736)45(5,345)$(8,708) $376,414
18,651(7,191)(0)
2,284(4,742)$3,170 $379,594
18,651(7,191)(0)(255)(5,007)$(24,554)$(6,415) $383,121$2,915 $386,036(0)$92,058 $252,197

See notes to consolidated financial statements.

6$(1,855)$2,832

Total

Consolidated Statement of Cash Flows
FURUNO ELECTRIC CO., LTD. and Consolidated Subsidiaries
Year Ended February 29, 2020

Millions of Yen
2020
2019

OPERATING ACTIVITIES:
Income before income taxes
Adjustments for:
Income taxes—paidDepreciation and amortization
Gain on sales of investment securities
Loss on impairment of long-lived assets
Gain on liquidation of a subsidiary
Loss on disaster
Changes in assets and liabilities:
Decrease (increase) in trade receivables
Decrease (increase) in inventories(Increase) decrease in asset for retirement benefits(Decrease) increase in trade payables
Increase (decrease) in accrued product warranty costs
Increase in liability for retirement benefits
Increase (decrease) in consumption taxes receivable
Other—net
Total adjustments
Net cash provided by operating activities¥ 2,699

Thousands of
U.S. Dollars(Note 1)2020

¥ 4,877 $ 24,664

(552)
3,246
(6)
65

(699)
3,093
(0)
336
(37)
92

(5,044)29,662
(54)
593

180
2,841
(62)
(2,398)
111
10
1,115
790
5,341
8,041

(276)
(3,103)
119
200
(187)
29
(197)
653
25
4,903

1,644
25,961(566)(21,913)
1,014
91
10,1897,219
48,80773,480INVESTING ACTIVITIES:
Proceeds from sales of property, plant and equipment
Purchases of property, plant and equipment
Purchases of intangible assets
Purchase of shares of subsidiaries and associates
Decrease (increase) in other assets
Net cash used in investing activities

115(1,887)(1,396)(78)
71(3,175)54(1,271)(1,115)(230)(348)(2,912)

1,050(17,243)(12,757)(712)
648(29,013)

FINANCING ACTIVITIES:
Decrease in short-term bank loans—net
Proceeds from long-term debt
Repayments of long-term debt
Dividends paid
Other
Net cash used in financing activities(1,795)
3,200(4,480)(787)(331)(4,194)(563)(16,403)
29,242(40,939)(7,191)(3,024)(38,325)

FOREIGN CURRENCY TRANSLATION ADJUSTMENTS ON CASH AND CASH EQUIVALENTS
NET INCREASE IN CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR
CASH AND CASH EQUIVALENTS, END OF YEAR
See notes to consolidated financial statements.

7

(159)
(504)
(24)
(1,251)

(226)
(341)
(2,065)
443
397
4,048
11,232
10,834
102,640¥11,675 ¥11,232 $106,689

Notes to Consolidated Financial Statements
FURUNO ELECTRIC CO., LTD. and Consolidated Subsidiaries
Year Ended February 29, 2020

1. BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS
The accompanying consolidated financial statements have been prepared in accordance with theprovisions set forth in the Japanese Financial Instruments and Exchange Act and its related
accounting regulations and in accordance with accounting principles generally accepted in Japan(“Japanese GAAP”), which are different in certain respects as to the application and disclosure
requirements of International Financial Reporting Standards (“IFRS”).
In preparing these consolidated financial statements, certain reclassifications andrearrangements have been made to the consolidated financial statements issued domestically inorder to present them in a form which is more familiar to readers outside Japan. In addition,certain reclassifications have been made in the 2019 consolidated financial statements toconform to the classifications used in 2020.
The consolidated financial statements are stated in Japanese yen, the currency of the country
in which Furuno Electric Co., Ltd. (the “Company”) is incorporated and operates. The translationsof Japanese yen amounts into U.S. dollar amounts are included solely for the convenience ofreaders outside Japan and have been made at the rate of ¥109.43 to $1, the approximate rate ofexchange at February 29, 2020. Such translations should not be construed as representations
that the Japanese yen amounts could be converted into U.S. dollars at that or any other rate.
As permitted under the Financial Instruments and Exchange Act of Japan, figures less than
one million yen have been omitted. As a result, the totals shown in the accompanying
consolidated financial statements do not necessarily agree with the sum of the individual
amounts.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESa. Consolidation—The consolidated financial statements as of February 29, 2020 include theaccounts of the Company and its 32 significant (31 in 2019) subsidiaries (together, the“Group”).
Under the control and influence concepts, those companies in which the Company, directly
or indirectly, is able to exercise control over operations are fully consolidated, and thosecompanies over which the Group has the ability to exercise significant influence are accounted
for by the equity method.
Investments in an associated company are accounted for by the equity method.
Investments in 5 (5 in 2019) unconsolidated subsidiaries and 2 (2 in 2019) associatedcompanies are stated at cost. If the equity method of accounting had been applied to theinvestments in these companies, the effect on the accompanying consolidated financial
statements would not be material.
Goodwill represents the excess of the cost of an acquisition over the fair value of the net
assets of the acquired subsidiary company at the date of acquisition. Goodwill is reported in
the balance sheet and is amortized using the straight-line method over reasonably estimatedperiods (mainly 18 years) in which economic benefits are expected to be realized.
All significant intercompany balances and transactions have been eliminated inconsolidation. All material unrealized profit included in assets resulting from transactions within
the Group is also eliminated.
The fiscal year-end dates of 26 consolidated subsidiaries are different from the consolidatedbalance sheet date of February 28 or 29. The fiscal year-end dates of FURUNO U.S.A., Inc.
and FURUNO PANAMA, S.A. are November 30 and 24 other subsidiaries’ fiscal year-end
dates are December 31.
b. Unification of Accounting Policies Applied to Foreign Subsidiaries for the Consolidated
Financial Statements—Under Accounting Standards Board of Japan (“ASBJ”) Practical Issues
Task Force (“PITF”) No. 18, “Practical Solution on Unification of Accounting Policies Applied toForeign Subsidiaries for the Consolidated Financial Statements,” the accounting policies andprocedures applied to a parent company and its subsidiaries for similar transactions and events
under similar circumstances should in principle be unified for the preparation of the consolidated
financial statements. However, financial statements prepared by foreign subsidiaries inaccordance with either International Financial Reporting Standards or generally accepted
accounting principles in the United States of America (Financial Accounting Standards Board
Accounting Standards Codification) tentatively may be used for the consolidation process,except for the following items that should be adjusted in the consolidation process so that net

8

income is accounted for in accordance with Japanese GAAP, unless they are not material; (a)amortization of goodwill; (b) scheduled amortization of actuarial gain or loss of pensions that has
been recorded in equity through other comprehensive income; (c) expensing capitalized
development costs of research and development; (d) cancellation of the fair value model ofaccounting for property, plant and equipment and investment properties and incorporation of thecost model of accounting.
c. Unification of Accounting Policies Applied to Foreign Associated Companies for the
Equity Method—ASBJ Statement No. 16, “Accounting Standard for Equity Method of
Accounting for Investments,” requires adjustments to be made to conform the associate’s
accounting policies for similar transactions and events under similar circumstances to those of
the parent company when the associate’s financial statements are used in applying the equity
method, unless it is impracticable to determine such adjustments. In addition, financial
statements prepared by foreign associated companies in accordance with either International
Financial Reporting Standards or generally accepted accounting principles in the United Statesof America tentatively may be used in applying the equity method if the following items areadjusted so that net income is accounted for in accordance with Japanese GAAP, unless they
are not material: (a) amortization of goodwill; (b) scheduled amortization of actuarial gain or lossof pensions that has been recorded in equity through other comprehensive income; (c)expensing capitalized development costs of research and development; and (d) cancellation of
the fair value model of accounting for property, plant and equipment and investment properties
and incorporation of the cost model of accounting.
d. Business Combinations—Business combinations are accounted for using the purchasemethod. Acquisition-related costs, such as advisory fees or professional fees, are accounted foras expenses in the periods in which the costs are incurred. If the initial accounting for a businesscombination is incomplete by the end of the reporting period in which the business combination
occurs, an acquirer shall report in its financial statements provisional amounts for the items forwhich the accounting is incomplete. During the measurement period, which shall not exceed
one year from the acquisition, the acquirer shall retrospectively adjust the provisional amounts
recognized at the acquisition date to reflect new information obtained about facts andcircumstances that existed as of the acquisition date and that would have affected themeasurement of the amounts recognized as of that date. Such adjustments shall be recognized
as if the accounting for the business combination had been completed at the acquisition date.
The acquirer recognizes any bargain purchase gain in profit or loss immediately on theacquisition date after reassessing and confirming that all of the assets acquired and all of theliabilities assumed have been identified after a review of the procedures used in the purchaseprice allocation. A parent’s ownership interest in a subsidiary might change if the parent
purchases or sells ownership interests in its subsidiary. The carrying amount of noncontrollinginterest is adjusted to reflect the change in the parent’s ownership interest in its subsidiary while
the parent retains its controlling interest in its subsidiary. Any difference between the fair value ofthe consideration received or paid and the amount by which the noncontrolling interest is
adjusted is accounted for as capital surplus as long as the parent retains control over its
subsidiary.
e. Cash Equivalents—Cash equivalents are short-term investments that are readily convertible
into cash and exposed to insignificant risk of changes in value. Cash equivalents include time
deposits, certificates of deposit, commercial paper and bond funds, all of which mature or
become due within three months of the date of acquisition.
f. Allowance for Doubtful Accounts—The allowance for doubtful accounts is stated inamounts considered to be appropriate based on the companies’ past credit loss experienceand an evaluation of potential losses in the receivables outstanding.
g. Inventories—Inventories are stated at the lower of cost, principally determined by the averagemethod, or net selling value.
h. Investment Securities—The Company and its domestic consolidated subsidiaries categorize
their existing securities as available-for-sale securities. Those securities with market prices arecarried at fair values prevailing at the balance sheet date, with net unrealized gains and losses,
9net of related taxes, reported in a separate component of equity. The cost of securities sold ismainly calculated using the moving-average method.
Nonmarketable available-for-sale securities are stated at cost determined by the movingaverage method. For other-than-temporary declines in fair value, investment securities are
reduced to net realizable value by a charge to income.
i. Property, Plant and Equipment—Property, plant and equipment are carried at cost.
Depreciation of property, plant and equipment is computed principally by the decliningbalance method, while the straight-line method is applied to building improvements andstructures acquired on or after April 1, 2016.
j. Long-Lived Assets—The Group reviews its long-lived assets for impairment whenever eventsor changes in circumstance indicate the carrying amount of an asset or asset group may not
be recoverable. An impairment loss is recognized if the carrying amount of an asset or asset
group exceeds the sum of the undiscounted future cash flows expected to result from thecontinued use and eventual disposition of the asset or asset group. The impairment loss
would be measured as the amount by which the carrying amount of the asset exceeds its
recoverable amount, which is the higher of the discounted cash flows from the continued use
and eventual disposition of the asset or the net selling price at disposition.
k. Product Warranty Costs—The Group establishes a liability for estimated product warranty
costs at the time of sale. Estimates for accrued product warranty costs are primarily based on
historical experience.
l. Retirement and Pension Plans—The Company and certain consolidated subsidiaries havelump-sum severance indemnity plans, defined contribution pension plans and contributory
funded defined benefit pension plans, which are pursuant to the Japanese Welfare Pension
Insurance Law.
The Company accounts for liabilities for retirement benefits based on the projected benefit
obligations and plan assets at the balance sheet date. The projected benefit obligations are
attributed to periods on a benefit formula basis. Actuarial gains and losses are amortized on astraight-line basis over 10 years within the average remaining service period of employees
commencing from the following year after incurrence. Past service costs are amortized on astraight-line basis over 10 years within the average remaining service period of employees.
Certain consolidated subsidiaries adopt a simplified method under which the retirement
benefit amount required to be paid if all the employees retired on the balance sheet date isconsidered as the projected benefit obligations in computing liabilities for retirement benefits
and net periodic benefit costs.
m. Asset Retirement Obligations—In March 2008, the ASBJ published the new accounting
standard for asset retirement obligations, ASBJ Statement No. 18, “Accounting Standard for
Asset Retirement Obligations,” and ASBJ Guidance No. 21, “Guidance on AccountingStandard for Asset Retirement Obligations.” Under this accounting standard, an asset
retirement obligation is defined as a legal obligation imposed either by law or contract that
results from the acquisition, construction, development, and normal operation of a tangible
fixed asset and is associated with the retirement of such tangible fixed asset. The asset
retirement obligation is recognized as the sum of the discounted cash flows required for the
future asset retirement and is recorded in the period in which the obligation is incurred if areasonable estimate can be made. If a reasonable estimate of the asset retirement obligation
cannot be made in the period the asset retirement obligation is incurred, the liability should berecognized when a reasonable estimate of the asset retirement obligation can be made. Upon
initial recognition of a liability for an asset retirement obligation, an asset retirement cost is
capitalized by increasing the carrying amount of the related fixed asset by the amount of theliability. The asset retirement cost is subsequently allocated to expense through depreciation
over the remaining useful life of the asset. Over time, the liability is accreted to its present value
each period. Any subsequent revisions to the timing or the amount of the original estimate ofundiscounted cash flows are reflected as an adjustment to the carrying amount of the liability
and the capitalized amount of the related asset retirement cost.

10

n. Research and Development Costs—Research and development costs are charged to income
as incurred.
o. Income Taxes—The provision for income taxes is computed based on the pretax income
included in the consolidated statements of income. The asset and liability approach is used torecognize deferred tax assets and liabilities for the expected future tax consequences of
temporary differences between the carrying amounts and the tax bases of assets andliabilities. Deferred taxes are measured by applying currently enacted income tax rates to thetemporary differences.
The Group files a tax return under the consolidated corporate-tax system, which allows
companies to base tax payments on the combined profits or losses of the parent company
and its wholly owned domestic subsidiaries.
p. Foreign Currency Transactions—All short-term and long-term monetary receivables andpayables denominated in foreign currencies are translated into Japanese yen at the exchange
rates at the balance sheet date. The foreign exchange gains and losses from translation arerecognized in the consolidated statements of income to the extent that they are not hedged byforward exchange contracts.
q. Foreign Currency Financial Statements—The balance sheet accounts of the consolidated
foreign subsidiaries are translated into Japanese yen at the current exchange rate as of thebalance sheet date except for equity, which is translated at the historical rate. Differences
arising from such translation were shown as “Foreign currency translation adjustments” andalso allocated to “Noncontrolling interests” in a separate component of equity. Revenue andexpense accounts of foreign consolidated subsidiaries are translated into yen at the averageexchange rate.
r. Derivatives and Hedging Activities—The Group uses derivative financial instruments tomanage exposures to fluctuations in interest rates. Interest rate swaps are utilized to reducethe interest rate risks of long-term debt. The Group does not enter into derivatives for tradingor speculative purposes.
Derivative financial instruments are classified and accounted for as follows: a) all derivatives
are recognized as either assets or liabilities and measured at fair value, and gains or losses onderivative transactions are recognized in the consolidated statements of income; and b) for
derivatives used for hedging purposes, if such derivatives qualify for hedge accounting
because of high correlation and effectiveness between the hedging instruments and thehedged items, gains or losses on derivatives are deferred until maturity of the hedgedtransactions in principle.
The interest rate swaps which qualify for hedge accounting and meet specific matching
criteria are not remeasured at market value but the differential paid or received under the swap
agreements are recognized and included in interest expense or income.
s. Per Share Information—Basic net income per share is computed by dividing net income
attributable to common shareholders by the weighted-average number of common shares
outstanding for the period.
Cash dividends per share presented in the accompanying consolidated statements ofincome are dividends applicable to the respective fiscal years, including dividends to be paid
after the end of the year.
t. Accounting Change—Foreign consolidated subsidiaries which apply IFRS have adopted
IFRS 16 “Leases” from this fiscal year. In adopting IFRS 16, they have adopted the method ofrecognizing accumulated effects of applying this standard on the date of initial adoption, whichis permitted as a transition measure.
Accordingly, regarding leases as a lessee which were previously classified as operatingleases pursuant to International Accounting Standards (“IAS”) 17, right-of-use assets andlease obligations are recognized on the date of initial adoption.
As a result, “Right-of-use assets” and “Accumulated depreciation” under PROPERTY,
PLANT AND EQUIPMENT—NET increased by ¥1,120 million ($10,234 thousand) and ¥285
million ($2,604 thousand), respectively and “Other current liabilities” under CURRENT
LIABILITIES and “Other long-term liabilities” under LONG-TERM LIABILITIES increased by11¥211 million ($1,928 thousand) and ¥610 million ($5,574 thousand), respectively, in the
consolidated balance sheet as of February 29, 2020.
The effects of applying this accounting standard on the consolidated statement of income
and per share information for the year ended February 29, 2020 are immaterial.
Operating cash flows increased by ¥299 million ($2,732 thousand) and financing cash flows
decreased by the same amount in the consolidated statement of cash flows for the year
ended February 29, 2020.
u. New Accounting Pronouncements:
Accounting Standard for Revenue Recognition—On March 31, 2020, the ASBJ issued
ASBJ Statement No. 29, “Accounting Standard for Revenue Recognition,” and ASBJ
Guidance No. 30, “Implementation Guidance on Accounting Standard for Revenue
Recognition.” The core principle of the standard and guidance is that an entity should
recognize revenue to depict the transfer of promised goods or services to customers in an
amount that reflects the consideration to which the entity expects to be entitled in exchange
for those goods or services. An entity should recognize revenue in accordance with that core
principle by applying the following steps:
Step 1: Identify the contract(s) with a customer
Step 2: Identify the performance obligations in the contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to the performance obligations in the contract
Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation
The accounting standard and guidance are effective for annual periods beginning on or after
April 1, 2021. Earlier application is permitted for annual periods beginning on or after April 1,
2018.
The Company expects to apply the accounting standard and guidance for annual periods
beginning on or after March 1, 2022, and is in the process of measuring the effects of applying
the new accounting standard and guidance in future applicable periods.
Leases—The Financial Accounting Standards Board (“FASB”) issued ASU 2016-02“Leases,” requiring the lessee to recognize all lease assets and liabilities on the balance sheet
in principle. Certain overseas subsidiaries that apply accounting principles generally accepted
in United States of America (“U.S. GAAP”) expect to apply this accounting standard for annual
periods beginning on or after December 15, 2021. The Company is in the process ofmeasuring the effects of applying the accounting standard in future applicable periods.
v. Changes in Presentation
Partial Amendments to Accounting Standard for Tax Effect Accounting—On February
16, 2018, ASBJ issued the “Partial Amendments to Accounting Standard for Tax EffectAccounting” (ASBJ Statement No. 28, the “Partial Amendments”) and the Company has
applied it from the beginning of the year ended February 29, 2020. Accordingly, deferred tax
assets has been presented under investments and other assets and deferred tax liabilities has
been presented under long-term liabilities. In addition, the related changes were made to Note
10 “INCOME TAXES.”As a result of the amendments, “Deferred tax assets” of ¥609 million ($5,565 thousand)under CURRENT ASSETS and “Deferred tax liabilities” of ¥448 million ($4,093 thousand)under LONG-TERM LIABILITIES in the consolidated balance sheet as of February 28, 2019
have been included in “Deferred tax assets” of ¥203 million ($1,855 thousand) under
INVESTMENTS AND OTHER ASSETS and “Deferred tax liabilities” under LONG-TERM
LIABILITIES are stated at ¥456 million ($4,167 thousand).
In addition, additional information is disclosed in Note 10 “INCOME TAXES” regarding theinformation described in Note 8 (excluding total amount of valuation allowance), and Note 9 of
the interpretation of the “Accounting Standard for Tax Effect Accounting,” which is required inparagraphs 3 to 5 of the “Partial Amendments.” However, the additional information
corresponding to the year ended February 28, 2019 is not disclosed, following the transitional
treatment prescribed in paragraph 7 of the “Partial Amendments.”12

3. SHORT-TERM INVESTMENTS
Short-term investments as of February 29, 2020 and February 28, 2019, consisted of thefollowing:Thousands of
U.S. Dollars
2020

Millions of Yen
2020
2019

Time deposits other than cash equivalents

¥467

¥773

$4,267

4. INVESTMENT SECURITIESInvestment securities as of February 29, 2020 and February 28, 2019, consisted of the following:Thousands of
U.S. Dollars
2020

Millions of Yen
2020
2019

Non-current:
Marketable equity securities¥1,305¥1,553$11,925

Government and corporate bonds
Other
Total

101
180
¥1,587102
153¥1,809922
1,644$14,502

The costs and aggregate fair values of investment securities at February 29, 2020 and February
28, 2019, were as follows:
February 29, 2020
Securities classified as:Millions of Yen
Unrealized
Unrealized
Gains
Losses

Cost

Fair
Value

Available-for-sale:
Equity securities

¥919

¥425

Debt securities
Other

65
43

35
21

Equity securities

¥936

¥617

¥0

¥1,553

Debt securities
Other

65
43

37
23

0

102
66

¥38

¥1,305101
64

February 28, 2019

Securities classified as:
Available-for-sale:February 29, 2020
Securities classified as:

Cost

Thousands of U.S. Dollars
Unrealized
Unrealized
Gains
LossesFair
Value

Available-for-sale:
Equity securities$8,398$3,883

Debt securities
Other

593
392

319
191

$347

$11,925
922
584

Available-for-sale securities whose fair value is not readily determinable as of February 29, 2020and February 28, 2019, were as follows:
Carrying AmountThousands ofMillions of Yen
U.S. Dollars
2020
2019
2020

Available-for-sale:
Equity securities

¥115

13

¥86

$1,0505. INVENTORIESInventories at February 29, 2020 and February 28, 2019, consisted of the following:
Millions of Yen
2020
2019

Merchandise and finished products¥15,408

Thousands of
U.S. Dollars
2020¥17,214 $140,802

Work in process

3,576

4,301

32,678Raw materials and supplies

6,082

6,658

55,578

Total¥25,067¥28,174 $229,068

6. LONG-LIVED ASSETSThe Group reviewed its long-lived assets for impairment as of February 29, 2020 and February
28, 2019 and, as a result, recognized impairment losses of ¥65 million ($593 thousand) and ¥336
million, respectively, as other expenses. These impairment losses primarily related to the longlived assets of the Marine Business and the Industrial Business for the years ended February 29,2020 and February 28, 2019 due to continuing operating losses in the divisions. Recoverable
amounts of these assets were measured at net selling prices determined by the estimated sales
prices of the respective assets or the assessed value of long-lived assets for property tax
purposes.

7. SHORT-TERM BANK LOANS, LONG-TERM DEBT AND LEASE OBLIGATIONS
Short-term bank loans at February 29, 2020 and February 28, 2019, consisted of notes to banks
and bank overdrafts. The weighted-average interest rates applicable to the short-term bank loans
were 0.58% and 0.41% at February 29, 2020 and February 28, 2019, respectively.
Long-term debt at February 29, 2020 and February 28, 2019, consisted of the following:
Millions of Yen
2020
2019

Thousands of
U.S. Dollars
2020

Loans from banks and insurance companies, due serially to 2028 with weightedaverage interest rates from 0.49% to 0.77% (2020) and from 0.67% to 0.75% (2019)¥9,700¥10,980$88,641

Less current portion(3,000)(3,480)(27,414)Long-term debt, less current portion¥6,700¥ 7,500$61,226

Lease obligations due serially to November 2067 with an average interest rate of 1.95% are
included in “Other long-term liabilities,” excluding current portion which is included in “Other
current liabilities.”
Annual maturities of long-term debt and lease obligations at February 29, 2020, were as
follows:
Millions of Yen
Long-term
Lease
Debt
Obligations

Year Ending February 28 or 29
2021

Thousands of
U.S. Dollars
Long-term
Lease
Debt
Obligations¥3,000¥211$27,414$1,928

2022

500

123

4,569

1,124

2023

1,300

220

11,879

2,010

2024

200

71

1,827

648

2025

3,200

65

29,242593

2026 and thereafter
Total

14

1,500

130

13,707

1,187¥9,700¥821$88,641$7,502

The carrying amounts of assets pledged as collateral for short-term bank loans of nil at February
29, 2020 and February 28, 2019 were as follows:
Thousands of
U.S. Dollars
2020

Millions of Yen
2020
2019

Land and buildings, net of accumulated depreciation

¥106

¥106

$968

As is customary in Japan, the Company maintains substantial deposit balances with bankswith which it has borrowings. Such deposit balances are not legally or contractually restricted as
to withdrawal.
General agreements with respective banks provide, as is customary in Japan, that additional
collateral must be provided under certain circumstances if requested by such banks and thatcertain banks have the right to offset cash deposited with them against any long-term or shortterm debt or obligation that becomes due and, in case of default and certain other specified
events, against all other debt payable to the banks. The Company has never been requested toprovide any additional collateral.

8. RETIREMENT AND PENSION PLANS
The Company and certain consolidated subsidiaries have severance payment plans for
employees. Under most circumstances, employees terminating their employment are entitled toretirement benefits determined based on the rate of pay at the time of termination, years ofservice and certain other factors. Such retirement benefits are made in the form of a lump-sum
severance payment from the Company or from certain consolidated subsidiaries and annuity
payments from a trustee. Employees are entitled to receive additional payments if the termination
is by voluntary retirement at earlier ages prior to the mandatory retirement age.
The Company and certain consolidated subsidiaries have contributory funded defined benefit
pension plans and unfunded retirement benefit plans for employees. Certain overseas
consolidated subsidiaries have defined retirement benefit plans or defined retirement contributionplans.
Certain consolidated subsidiaries adopt the simplified method in determining retirement benefit
obligations.
1. Defined benefit plans (including plans to which the simplified method is applied)(1)	The changes in defined benefit obligations for the years ended February 29, 2020 and
February 28, 2019, were as follows:
Thousands of
U.S. Dollars
2020

Millions of Yen
2020
2019

Balance at beginning of year

¥15,930¥16,441 $145,572

Current service cost

534

529

4,879

Interest cost

157

162

1,434

Actuarial gains

(37)

(7)

(338)

Benefits paid

(1,125)(1,244)(10,280)

45

48

411

OthersBalance at end of year

¥15,505

15¥15,930 $141,688

(2)	The changes in plan assets for the years ended February 29, 2020 and February 28, 2019,were as follows:
Thousands of
U.S. Dollars
2020

Millions of Yen
2020
2019

Balance at beginning of year

¥13,674¥14,077 $124,956

Expected return on plan assets

284

292

2,595

Actuarial gains

166

5

1,516

Contributions from the employer

299

301

2,732

(1,002)(7,950)Benefits paid

(870)

Balance at end of year

¥13,554¥13,674 $123,860(3)	Reconciliations between the liability recorded in the consolidated balance sheet and thebalances of defined benefit obligations and plan assets were as follows:
Thousands of
U.S. Dollars
2020

Millions of Yen
2020
2019

Funded defined benefit obligation¥12,632¥13,109 $115,434

Plan assets(13,554)(13,674) (123,860)

Total

(922)

(565)

(8,425)

2,872

2,821

26,245

Unfunded defined benefit obligation
Net liability arising from defined benefit obligation¥ 1,950¥ 2,255 $ 17,819
Thousands of
U.S. Dollars
2020

Millions of Yen
2020
2019

Liability for retirement benefits¥2,872

Asset for retirement benefits
Net liability arising from defined benefit obligation¥2,821$26,245

(922)

(565)

(8,425)¥1,950¥2,255$17,819(4)	The components of net periodic benefit costs for the years ended February 29, 2020 and
February 28, 2019, were as follows:
Thousands of
U.S. Dollars
2020

Millions of Yen
2020
2019

Service cost

¥534

¥529

$4,879Interest cost

157

162

1,434

Expected return on plan assets

(284)

(292)

(2,595)

Amortization of actuarial differences

101

282

922

Amortization of prior service cost

(54)

(40)

(493)

Periodic benefit cost calculated by the simplified method

45

48

411

OthersNet periodic benefit costs

34

33

310

¥535

¥724

$4,888(5)	Amounts recognized in other comprehensive income (before income tax effect) in respect ofdefined retirement benefit plans for the years ended February 29, 2020 and February 28,
2019, were as follows:
Millions of Yen
2020
2019

Thousands of
U.S. Dollars
2020

Prior service cost

¥ (54)¥ (40)

Actuarial differences

305

295

2,787

Total

¥250

¥255

$2,28416$ (493)

(6)	Amounts recognized in accumulated other comprehensive income (before income tax
effect) in respect of defined retirement benefit plans as of February 29, 2020 and February
28, 2019, were as follows:
Millions of Yen
2020
2019

Thousands of
U.S. Dollars
2020

Unrecognized prior service cost¥(102)¥   (157)

Unrecognized actuarial differences

805

1,110

7,356

¥ 702

¥  953$6,415Total$ (932)(7) Plan assets
a. Components of plan assets
Plan assets as of February 29, 2020 and February 28, 2019, consisted of the following:
2020

2019

Debt investments

40%

39%

Equity investments

20

20

Cash and cash equivalents

01

General account assets of life insurance36

36

Others

4

4

Total

100%

100%

b. Method of determining the expected rate of return on plan assets
The expected rate of return on plan assets is determined by considering the long-term
rates of return which are expected currently and in the future from the various
components of the plan assets.
(8)	Assumptions used for the years ended February 29, 2020 and February 28, 2019, were set
forth as follows:
2020

Discount rate

1.0%

2019

1.0%

Expected rate of return on plan assets

2.1%

2.1%

Expected rate of salary increase

2.8%

2.8%

2. Defined contribution plans
The amount of required contribution to the defined contribution plans of the Company andconsolidated subsidiaries for the years ended February 29, 2020 and February 28, 2019 was¥279 million ($2,549 thousand) and ¥276 million, respectively.

17

9. EQUITY
Japanese companies are subject to the Companies Act of Japan (the “Companies Act”). The
significant provisions in the Companies Act that affect financial and accounting matters are
summarized below:(a) Dividends
Under the Companies Act, companies can pay dividends at any time during the fiscal year in
addition to the year-end dividend upon resolution at the shareholders’ meeting. Additionally,for companies that meet certain criteria including (1) having a Board of Directors, (2) having
independent auditors, (3) having an Audit & Supervisory Board, and (4) the term of service ofthe directors being prescribed as one year rather than the normal two-year term by its articles
of incorporation, the Board of Directors may declare dividends (except for dividends-in-kind)at any time during the fiscal year if the company has prescribed so in its articles ofincorporation. However, the Company does not meet all the above criteria.
Semiannual interim dividends may also be paid once a year upon resolution by the Boardof Directors if the articles of incorporation of the company so stipulate. The Companies Act
provides certain limitations on the amounts available for dividends or the purchase of treasury
stock. The limitation is defined as the amount available for distribution to the shareholders,
but the amount of net assets after dividends must be maintained at no less than ¥3 million.
(b) Increases/decreases and transfer of common stock, reserve and surplus
The Companies Act requires that an amount equal to 10% of dividends must be appropriatedas a legal reserve (a component of retained earnings) or as additional paid-in capital (acomponent of capital surplus), depending on the equity account charged upon the paymentof such dividends until the aggregate amount of legal reserve and additional paid-in capitalequals 25% of common stock. Under the Companies Act, the total amount of additional
paid-in capital and legal reserve may be reversed without limitation. The Companies Act also
provides that common stock, legal reserve, additional paid-in capital, other capital surplus
and retained earnings can be transferred among the accounts within equity under certain
conditions upon resolution of the shareholders.
(c) Treasury stock and treasury stock acquisition rights
The Companies Act also provides for companies to purchase treasury stock and dispose ofsuch treasury stock by resolution of the Board of Directors. The amount of treasury stock
purchased cannot exceed the amount available for distribution to the shareholders which isdetermined by a specific formula. Under the Companies Act also provides that companies
can purchase both treasury stock acquisition rights and treasury stock.

18

10. INCOME TAXESThe Company and its domestic subsidiaries are subject to Japanese national and local income
taxes which, in the aggregate, resulted in a normal effective statutory tax rate of approximately
30.6% and 30.8% for the years ended February 29, 2020 and February 28, 2019, respectively.
The tax effects of significant temporary differences and tax loss carryforwards which resulted indeferred tax assets and liabilities at February 29, 2020 and February 28, 2019, are as follows:
Thousands of
U.S. Dollars
2020

Millions of Yen
2020
2019

Deferred tax assets:
Unrealized profit
Liability for retirement benefits¥ 1,100¥ 1,207$ 10,052

1,042

1,121

9,522

Loss on impairment of long-lived assets

153

185

1,398

Inventories

754

793

6,890

Investment securities

217

223

1,983

Accrued bonuses

383

417

3,499

Accrued product warranty costs

323

284

2,951

Tax loss carryforwards (Note 2)

1,947

2,133

17,792

657

656

6,003

6,579

7,023

Other

60,120Less valuation allowance for tax loss carryforwards (Note 2)(1,937)(17,700)

Less valuation allowance for temporary differences(3,979)(36,361)

Total valuation allowance (Note 1)(5,916)(6,367)(54,061)

663

656

6,058

Deferred tax assets
Deferred tax liabilities:
Accelerated depreciation in overseas subsidiaries

62

71

566

Unrealized gain on available-for-sale securities

133

175

1,215

Undistributed earnings of overseas subsidiaries

221

211

2,019

Asset for retirement benefits

449

434

4,103

Other
Deferred tax liabilities
Net deferred tax liabilities

36

15

328

903

908

8,251

¥ (239)¥ (252) $ (2,184)

Notes:
1.	Valuation allowance decreased by ¥451 million ($4,121 thousand) mainly because valuation
allowance relating to tax loss carryforwards of the Company decreased by ¥256 million($2,339 thousand).

19

2.	The expiration of tax loss carryforwards, the related valuation allowances and the resulting net
deferred tax assets as of February 29, 2020 were as follows:

February 29, 2020
Deferred tax assets relating to
tax loss carryforwards *aLess valuation allowance fortax loss carryforwards
Net deferred tax assets
relating to tax loss
carryforwards

February 29, 2020
Deferred tax assets relating to
tax loss carryforwards *aLess valuation allowance fortax loss carryforwards
Net deferred tax assets
relating to tax loss
carryforwards

Millions of Yen
After
After
After
Two Years Three Years Four Years
throughthroughthroughThree Years Four Years Five Years

One Yearor LessAfter
One Yearthrough
Two Years

¥ 259

¥ 107

¥ 471

¥9

¥ 921

¥ 178

¥ 1,947

(249)

(107)

(471)

(9)

(921)

(178)

(1,937)

After
Five Years

Total

10

10 *b

Thousands of U.S. Dollars
After
After
After
Two Years Three Years Four Years
throughthroughthroughThree Years Four Years Five Years

One Yearor LessAfter
One Yearthrough
Two Years$ 2,366$ 977$ 4,304$ 82$ 8,416$ 1,626$ 17,792(2,275)(977)(4,304)(82)(8,416)(1,626)(17,700)

After Five
Years

91

Total

91 *b

*a	Deferred tax assets relating to tax loss carryforwards are computed by multiplying the normal
effective statutory tax rate.
*b	Net deferred tax assets recorded at ¥10 million ($91 thousand) are recognized for tax loss
carryforwards of ¥1,947 million ($17,792 thousand) (computed by multiplying the normal
effective statutory tax rate). This deferred tax assets are recognized for tax loss carryforwards
mainly recorded by FURUNO SYSTEMS CO., LTD., and valuation allowance is not recognizedsince they are considered to be recoverable as future taxable income is expected.
A reconciliation between the normal effective statutory tax rates and the actual effective tax rates
reflected in the accompanying consolidated statements of income for the years ended February
29, 2020 and February 28, 2019, is as follows:
2020

2019

Normal effective statutory tax rate

30.6%

30.8%

Expenses not deductible for income tax purposes

2.1

1.3

Per capita inhabitant tax

1.0

0.6

Lower income tax rates applicable to income in certain foreign countries

(5.4)

1.2

Nontaxable dividends and other income

(1.1)

(0.1)

Undistributed earnings of overseas subsidiaries

0.4

(0.2)

Adjustment to deferred tax assets due to a change in tax rate

0.3

1.8

Valuation allowance for deferred tax assets(7.4)(20.5)

Other—net

3.3

1.8

Actual effective tax rate

23.8%

16.7%

11. RESEARCH AND DEVELOPMENT COSTS
Research and development costs charged to income were ¥4,266 million ($38,983 thousand)and ¥4,707 million for the years ended February 29, 2020 and February 28, 2019, respectively.

2012. FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES(1) Group policy for financial instruments
The Group raises necessary funds to support its principal business plans to produce and sellmarine electronic equipment and industrial electronic equipment. Cash surpluses, if any, areinvested in low-risk financial assets. Short-term bank loans are used to fund ongoing
operations. Derivatives are not used for speculative purposes, but to manage exposure tofinancial risks as described below.
(2) Nature and extent of risks arising from financial instruments
Trade receivables, such as notes receivable and accounts receivable, are exposed tocustomer credit risk.
Foreign currency denominated trade receivables arising from global activities are exposed tothe market risk of fluctuations in foreign currency exchange rates.
Investment securities, mainly equity instruments of customers and suppliers of the Group
held for business or capital alliance purposes, are exposed to the risk of market pricefluctuation.
Payment terms of trade payables, such as notes payable and accounts payable, are lessthan one year. Certain trade payables arising from import of raw materials, which aredenominated in foreign currencies, are exposed to the market risk of fluctuations in foreign
currency exchange rates.
Maturities of bank loans, mainly for the purpose of financing necessary working funds, areless than seven years after the balance sheet date. Certain bank loans are exposed to themarket risk of fluctuations in variable interest rates. Those risks are mitigated by using
derivatives such as interest rate swaps.
Derivatives mainly consist of interest rate swaps which are used to avoid or mitigate themarket risks from changes in interest rates. For hedging instruments and hedged items
concerning hedge accounting and hedging policies and hedge effectiveness, please see Note
2.r “Derivatives and Hedging Activities” under “SUMMARY OF SIGNIFICANT ACCOUNTINGPOLICIES.”(3) Risk management for financial instruments
Credit Risk Management
Credit risk is the risk of economic loss arising from a counterparty’s failure to repay or service
debt according to the contractual terms.
The Company manages its credit risk from trade receivables by monitoring payment terms
and balances of major customers and identifying the default risk of counterparties at an earlystage in accordance with the credit control policy. The consolidated subsidiaries have similar
control policies pursuant to the Company’s credit control policy. Derivatives are entered intowith only high-credit rating financial institutions and, accordingly, credit risk arising fromdefault of the counterparties is kept at a minimum. The maximum credit risk exposure offinancial assets as of the consolidated balance sheet date is represented by their carrying
values exposed to credit risk.
Market Risk Management (foreign exchange risk and interest rate risk)
The Group hedges foreign currency trade receivables and payables against market risk fromfluctuations in foreign currency exchange rates identified by currency and by month using
principally forward foreign currency contracts. Such foreign exchange risk is hedged
principally by forward foreign currency contracts. In addition, the Group utilizes interest rate
swaps to mitigate the risk from changes in interest rates associated with bank loans.
Investment securities are managed by monitoring market values and financial position ofissuers on a regular basis and continuously reviewing the holding status by taking into
consideration the relationship with the counterparties.
Derivative transactions are executed and controlled based on internal guidelines, whichprescribe the transaction limits and procedures of the finance department of each company,
and the positions are identified on a regular basis. In addition, the responsible division of theCompany is informed of the status of transactions by each Group company on a regularbasis to control and confirm the positions.

21Liquidity Risk Management
Liquidity risk comprises the risk that the Group cannot meet its contractual obligations in fullon maturity dates.
The Group manages its liquidity risk by preparing and updating the financial plans of the
Accounting Department based on the reports from each division.
(4) Fair values of financial instruments
Fair values of financial instruments are based on quoted prices in active markets. If a quoted
price is not available, other rational valuation techniques are used instead. Please see Note 13
for fair value information for derivatives.
(a) Fair value of financial instruments
Millions of Yen

February 29, 2020
Cash and cash equivalents

Carrying Amount

Fair Value¥11,675¥11,675

Short-term investments

467

467

Notes receivable—trade

1,251

Accounts receivable—trade

14,741

Electronically recorded receivables—operating

1,598

Allowance for doubtful receivables(395)

Total receivables—trade17,196

Unrealized Gain

17,196

Investment securities:
Available-for-sale securities

1,472

1,472

Total assets¥30,811¥30,811

Short-term bank loans

¥206

¥206

Notes payable—trade

¥201

¥201

2,332

2,332

6,493

6,493

9,027

9,027

Accounts payable—trade
Electronically recorded obligations—operating
Total payables—tradeLong-term debt, including current portion
Total liabilities
Derivatives (*1)

22

9,700

9,778

¥78

¥18,934¥19,012¥78¥(12)¥(12)

Millions of Yen

February 28, 2019
Cash and cash equivalents

Carrying Amount

Fair Value¥11,232¥11,232

Short-term investments

773

773

Notes receivable—trade

1,751

Accounts receivable—trade

15,302

Electronically recorded receivables—operating

891

Allowance for doubtful receivables(497)

Total receivables—trade17,447

17,447

1,723

1,723

Total assets¥31,176¥31,176

Short-term bank loans¥2,002¥2,002

Notes payable—trade

¥218

¥218

3,420

3,420

Unrealized Gain

Investment securities:
Available-for-sale securities

Accounts payable—trade
Electronically recorded obligations—operating
Total payables—tradeLong-term debt, including current portion
Total liabilities
Derivatives (*1)

7,886

7,886

11,526

11,526

10,98011,043¥63¥24,508¥24,571

¥63

¥20

¥20

Thousands of U.S. Dollars

February 29, 2020
Cash and cash equivalents

Carrying Amount

Fair Value$106,689$106,689

Short-term investments

4,267

4,267

Notes receivable—trade

11,431

Accounts receivable—trade134,707

Electronically recorded receivables—operating

14,602

Allowance for doubtful receivables(3,609)Total receivables—trade157,141

157,141

13,451

13,451

Total assets$281,558$281,558

Short-term bank loans$1,882$1,882

Notes payable—trade$1,836$1,836

Accounts payable—trade21,31021,310Electronically recorded obligations—operating

59,33459,33482,491

82,491

Unrealized Gain

Investment securities:
Available-for-sale securities

Total payables—tradeLong-term debt, including current portion
Total liabilities
Derivatives (*1)

88,64189,353$712$173,023$173,736$712$(109)$(109)*1 Net receivables or payables arising from derivative transactions to which hedge accounting is not applied and deferral hedge
accounting is applied are presented in a net amount and net payables are presented in parentheses.

23Assets:
Cash and cash equivalents, short-term investments and notes receivable, accounts
receivable—trade and electronically recorded receivables—operating
The fair values of these items are determined using their carrying amounts, since the fair values
approximate their carrying amounts as these amounts are settled in a short period of time.
Investment securities
The fair values of investment securities are measured at the quoted market prices of the stock
exchange for equity securities, and at the quoted market prices of the exchanges or thequoted prices obtained from financial institutions for debt securities.
Liabilities:
Notes payable and accounts payable – trade, electronically recorded obligations – operating
and short-term bank loans
The fair values of these items are determined using their carrying amounts, since the fair values
approximate their carrying amounts as these amounts are settled in a short period of time.
Long-term debt, including current portion
The fair values of long-term debt are measured at the discounted present value of aggregatedamounts of principal and interest payables using the interest rate that would be applied tosimilar transactions newly arranged.
The fair values of long-term debt with floating interest rates hedged using interest rate swaps
qualifying for hedge accounting are measured at the discounted present value of aggregatedamounts of principal and interest payables which are accounted for together with the swaps
using the reasonably estimated interest rate that would be applied to similar transactions to be
newly arranged or at the values presented by the financial institutions.
Derivatives
Please see Note 13 “DERIVATIVES.”
The fair values of interest rate swaps which are accounted for together with the long-term
debt as the hedged item are included in the fair values of the relevant long-term debt, if they
qualify for hedge accounting.
(b) Financial instruments whose fair value cannot be reliably determined
Carrying AmountThousands ofMillions of Yen
U.S. Dollars
2020
2019
2020

February 28 or 29
Unlisted equity securities¥1,119

¥1,060$10,225(5) Maturity analysis for financial assets and securities with contractual maturities
Millions of Yen
Due in One Year Due after One Year Due after Five Yearsor Less
through Five Years through Ten Years

February 29, 2020
Cash and cash equivalents¥11,675

Short-term investments

467

Notes receivable—trade

1,251

Accounts receivable—trade

14,741

Electronically recorded receivables—operating

1,598

Investment securities:
Available-for-sale securities with contractual maturities: Debt securities—other
Total

¥100
¥29,73424¥100

Due after
Ten Years

Thousands of U.S. Dollars
Due in One Year Due after One Year Due after Five Yearsor Less
through Five Years through Ten Years

February 29, 2020
Cash and cash equivalents

Due after
Ten Years$106,689

Short-term investments

4,267

Notes receivable—trade

11,431

Accounts receivable—trade134,707

Electronically recorded receivables—operating

14,602

Investment securities:
Available-for-sale securities with contractual maturities: Debt securities—other
Total

$913
$271,717$913

Please see Note 7 for annual maturities of long-term debt.

13. DERIVATIVESThe Group enters into foreign currency forward contracts to hedge foreign exchange risk
associated with certain assets and liabilities denominated in foreign currencies. The Group also
enters into interest rate swap contracts to manage its interest rate exposures on certain liabilities.
All derivative transactions are entered into to hedge interest and foreign currency exposuresincorporated within the Group’s business. Accordingly, market risk in these derivatives is basicallyoffset by opposite movements in the value of hedged assets or liabilities.
Because the counterparties to these derivatives are limited to major international financial
institutions, the Group does not anticipate any losses arising from credit risk.
Derivative transactions entered into by the Group have been made in accordance with internal
policies which regulate the authorization and credit limit amount.
Derivative transactions to which hedge accounting is not applied at February 29, 2020 and
February 28, 2019(1) Currency-related derivatives
Contract
AmountFebruary 29, 2020
Foreign currency forward contracts:

Selling EUR¥353

Millions of Yen
Contract AmountDue after One Year Fair Value¥(13)

Unrealized
Gain (Loss)¥(13)

Buying USD

10

0

0

GBP

532

(0)

(0)

EUR

353

0

0

Selling EUR

¥408

¥ 15

¥ 15

Buying GBP

544

11

11

Thousands of U.S. Dollars
Contract AmountDue after One Year Fair Value

Unrealized
Gain (Loss)

February 28, 2019

Foreign currency forward contracts:

Contract
AmountFebruary 29, 2020
Foreign currency forward contracts:

Selling EUR$3,225$(118)$(118)

Buying USD

91

0

0

GBP

4,861

(0)

(0)

EUR

3,225

0

0

(Note) The fair values are determined using the forward exchange rates.

25

(2) Hybrid financial instruments
There were no hybrid financial instruments at February 29, 2020.
Contract
AmountFebruary 28, 2019
Debt including embedded derivatives:

Long-term debt, cancelable before maturity¥1,000Millions of Yen
Contract AmountDue after One Year Fair Value¥1,000

Unrealized
Loss

¥(1)

¥(1)

(Note 1) The fair values are determined using the prices obtained from financial institutions.
(Note 2) The fair value of debt, including embedded derivatives, is determined by accounting for embedded derivatives of hybrid
financial instruments separately.
(Note 3) The contract amount presents the principal of the debt, including embedded derivatives and does not present the market
risk volume exposed to derivative transactions.

Derivative transactions to which hedge accounting is applied at February 29, 2020 and
February 28, 2019(1) Interest-related derivatives
February 29, 2020
Interest rate swaps:
Receivable floating rate/Payable fixed rate

Hedged Item

Long-term
debt

February 28, 2019
Interest rate swaps:
Receivable floating rate/Payable fixed rate

Hedged Item

Long-term
debt
Current
portion of
long-term
debt

Receivable floating rate/Payable fixed rate

Millions of Yen
Contract
Contract AmountAmountDue after One Year

¥3,500Note 2Millions of Yen
Contract
Contract AmountAmountDue after One Year

Fair Value¥2,600¥2,200Long-term
debt

Note 2¥2,000¥(7)

Thousands of U.S. Dollars
Contract
Contract Amount
Hedged Item
AmountDue after One Year

February 29, 2020
Interest rate swaps:
Receivable floating rate/Payable fixed rate

Fair Value¥2,500$31,983$22,845

Fair Value

Note 2(Note 1) The fair values are determined using the prices obtained from the financial institutions.
(Note 2) The fair values of interest rate swaps, which are accounted for together with the long-term debt as the hedged item, areincluded in the fair values of the relevant long-term debt, if they qualify for hedge accounting.

14. CONTINGENT LIABILITIESAt February 29, 2020, the Group had the following contingent liabilities:
Guarantees of bank loans of its customers

26

Millions of Yen

Thousands of
U.S. Dollars

¥8

$73

15. OTHER COMPREHENSIVE LOSS
The components of other comprehensive loss for the years ended February 29, 2020 and
February 28, 2019, were as follows:
Thousands of
U.S. Dollars
2020

Millions of Yen
2020
2019

Unrealized loss on available-for-sale securities:
Losses arising during the year
Reclassification adjustments to profit or loss
Amount before income tax effect
Income tax effectTotal¥(229)¥(252)

(3)

(0)

(27)

(233)

(252)

(2,129)$(2,092)

42

64

383

¥(190)¥(187)$(1,736)¥1¥(18)$9

Deferred gain (loss) on derivatives under hedge accounting:
Gains (losses) arising during the year
Reclassification adjustments to profit or loss

5

8

45

Amount before income tax effect

7

(9)

63

Income tax effect

(2)

2

(18)

¥5

¥(7)

$45

¥(554)¥  (1,006)$(5,062)

Total
Foreign currency translation adjustments:
Adjustments arising during the year
Reclassification adjustments to profit or loss

127

Amount before income tax effect

(554)

(879)

(5,062)¥(554)¥(879)$(5,062)

¥204

¥13

$1,864

Reclassification adjustments to profit or loss

46

242

420

Amount before income tax effect

250

255

2,284

¥250

¥255

$2,284

Income tax effect
Total
Defined retirement benefit plans:
Adjustments arising during the year

Income tax effect
Total
Share of other comprehensive income in an associate accounted for by the equity method—
Losses arising during the year¥(31)¥(4)$(283)Total¥(31)¥(4)$(283)

Total other comprehensive loss¥(519)¥(823)$(4,742)27

16. NET INCOME PER SHARE
The financial data for the computation of basic net income per share for the years ended
February 29, 2020 and February 28, 2019, is as follows:
Thousands
Millions of Yenof Shares
Net Income Attributable
Weighted—
to Owners of the Parent Average Shares

Yen

U.S. Dollars
EPS

Year ended February 29, 2020:
Basic earnings per share (EPS)
Net income available to common shareholders¥2,041

31,511¥64.78¥4,026

31,511¥127.77$0.59

Year ended February 28, 2019:
Basic earnings per share (EPS)
Net income available to common shareholders

Diluted EPS is not disclosed because the Company did not issue dilutive securities for the years
ended February 29, 2020 and February 28, 2019.

17. SUBSEQUENT EVENTSAppropriations of Retained Earnings
The following appropriation of retained earnings at February 29, 2020, was approved at theCompany’s shareholders’ meeting held on May 28, 2020:
Year-end cash dividends, ¥10 ($0.09) per share

Millions ofYen

Thousands of
U.S. Dollars¥315$2,878

18. SEGMENT INFORMATION
Under ASBJ Statement No. 17, “Accounting Standard for Segment Information Disclosures,” andASBJ Guidance No. 20, “Guidance on Accounting Standard for Segment Information
Disclosures,” an entity is required to report financial and descriptive information about its
reportable segments. Reportable segments are operating segments or aggregations of operating
segments that meet specified criteria. Operating segments are components of an entity about
which separate financial information is available and such information is evaluated regularly by thechief operating decision maker in deciding how to allocate resources and in assessing
performance. Generally, segment information is required to be reported on the same basis as isused internally for evaluating operating segment performance and deciding how to allocate
resources to operating segments.
1. Description of reportable segments
The Group’s reportable segments are those for which separate financial information isavailable and regular evaluation by the Company’s management is being performed inorder to decide how resources are allocated among the Group.
The principal business of the Group is manufacturing and sales of marine equipment,
industrial electronics equipment, wireless LAN system and handy terminals. The Company
consists of divisions separated by product and service, and each division designs
comprehensive strategies for its products and services and develops relevant businessactivities. Each subsidiary develops business activities from a management perspective
within the Group. Accordingly, the Group consists of business segments by product andservice, which are the “Marine” business, the “Industrial” business, and the “Wireless LAN/
Handy Terminal” business, as the reportable segments.
The major products in the “Marine” business are navigation equipment, fishingequipment and radio communication equipment, etc. The major products in the “Industrial”
business are medical equipment, ITS equipment, GPS equipment, and avionics electronicequipment, etc. The major products in the “Wireless LAN/Handy Terminal” business arewireless LAN system and handy terminals, etc.

28

2.	Methods of measurement for the amounts of sales, profit, assets, liabilities and other items
for each reportable segment
The accounting policies of each reportable segment are consistent with those disclosed in
Note 2, “SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES.”
Segment profit corresponds to the figure based on “operating income” in the
consolidated statement of income.
Intersegment sales or transfers are based on the arm’s-length price.
3. Information about sales, profit, assets, liabilities and other items:
Millions of Yen
2020

MarineReportable Segment
Wireless LAN/
Industrial Handy Terminal

Other(Note 1)

Total

Reconciliations Consolidated(Note 2)
(Note 3)

Total

Sales:
Sales to external customers ¥67,250 ¥11,589
Intersegment sales
or transfers

23¥3,821 ¥82,661
122

146

¥  405 ¥83,066
531¥83,066677 ¥  (677)

Total¥67,250 ¥11,612¥3,944 ¥82,807¥  936 ¥83,743 ¥  (677) ¥83,066

Segment profit (loss)¥ 1,958 ¥  (284)¥  662 ¥ 2,336¥   75 ¥ 2,411

Segment assets

47,319

9,368

2,267

58,955

1,066

60,022

16,111

76,133

2,687

104

128

2,920

35

2,955

290

3,246

¥0 ¥ 2,411

Other:
Depreciation
Equity in earnings of an
associate accounted forby the equity method

50

50

50

50

Investment of an associateaccounted for by theequity method

219

219

219

219

Increase in property,
plant and equipment
and intangible assets

2,278

288

176

29

2,743

21

2,764

480

3,245

Millions of Yen
2019
Reportable Segment
Wireless LAN/
Industrial Handy Terminal

MarineOther(Note 1)

Total

Reconciliations Consolidated(Note 2)
(Note 3)

Total

Sales:
Sales to external customers ¥66,558 ¥11,843
Intersegment sales
or transfers

042¥3,336 ¥81,739
94

137¥  369 ¥82,108
484¥82,108622 ¥  (622)

Total¥66,558 ¥11,886¥3,431 ¥81,876¥  854 ¥82,730 ¥  (622) ¥82,108

Segment profit¥ 3,923 ¥   335¥  442 ¥ 4,702¥   64 ¥ 4,767

Segment assets

47,525

10,4591,671

59,656

1,132

60,78818,43579,223

2,534

174

107

2,816

39

2,856

236

3,093

¥4 ¥ 4,771

Other:
Depreciation
Equity in earnings of an
associate accounted forby the equity method

84

84

84

84

Investment of an associateaccounted for by theequity method

219

219

219

219

Increase in property, plantand equipment andintangible assets

2,063

219

183

2,466

5

2,472

123

2,595

Thousands of U.S. Dollars
2020

MarineReportable Segment
Wireless LAN/
Industrial Handy Terminal

Total

Other
(Note 1)

Total

Reconciliations Consolidated(Note 2)
(Note 3)

Sales:
Sales to external customers $614,548 $105,903 $34,917 $755,377$3,700 $759,078

Intersegment sales
or transfers

4,852

210

1,114

1,334

6,186

$759,078$(6,186)

Total$614,548 $106,113 $36,041 $756,712$8,553 $765,265$(6,186)$759,078

Segment profit (loss)$ 17,892 $  (2,595) $ 6,049 $ 21,346$  685 $ 22,032$    0 $ 22,032

Segment assets

432,41385,607

9,741 548,496 147,226 695,723

24,554

950

20,716 538,746

Other:
Depreciation

1,169

26,683319

27,0032,650

29,662Equity in earnings of an
associate accounted forby the equity method

456

456

456

456

Investment of an associateaccounted for by theequity method

2,001

2,001

2,001

2,001

Increase in property,
plant and equipment
and intangible assets

20,816

2,631

1,608

25,066

191

25,2584,386

29,653

Notes:
1.	“Other” is a business segment which is not included in reportable segments and includes the electromagnetic environmental
testing business and other businesses.
2.	The nature of “Reconciliations” is as follows:(1)	“Reconciliations” of “Segment profit (loss)” includes general and administrative expenses of the head office administration
departments which do not belong to any reportable segment.
(2)	“Reconciliations” of “Segment assets” includes assets of the head office administration departments, which do not belong to
any reportable segment, mainly consisting of common use assets, investments and other assets.

30

(3)	“Reconciliations” of “Increase in property, plant and equipment and intangible assets” includes capital investments, which do
not belong to any reportable segment.
3. Segment profit (loss) is reconciled with operating income in the consolidated statement of income.

Other Related Information:
1. Information by product and service
	Information by product and service is omitted since similar information is disclosed in thesegment information.
2. Information by geographic region(1) Sales
Millions of Yen
2020
Japan

¥33,584

Americas¥8,092EuropeAsia¥19,407¥19,296

Other Regions¥2,686

Total¥83,066

Millions of Yen
2019
Japan

¥32,408

Americas¥8,348EuropeAsia¥20,047¥18,354

Other Regions¥2,949Total¥82,108

Thousands of U.S. Dollars
2020
Japan

$306,899

Americas$73,946

Europe$177,346

Asia$176,331

Other Regions$24,545

Total$759,078

Note: Sales are classified by country or region based on the location of customers.

(2) Property, plant and equipment
Millions of Yen
2020
Japan

¥7,196

Americas¥530

EuropeAsia¥1,660

Other Regions

¥766

Total

¥10,152

Millions of Yen
2019
Japan

¥6,954

Americas¥520

EuropeAsia¥930

Other Regions

¥687

Total

¥9,093Thousands of U.S. Dollars
2020
Japan

$65,758

Americas$4,843

EuropeAsia$15,169$6,999Other Regions

Total$92,771

3. Information by major customer
	Information by customer is omitted, since there is no customer to whom net sales
accounts for more than 10% of total net sales recorded in the consolidated statement ofincome.

31

4. Information about loss on impairment of long-lived assets
Millions of Yen
2020

MarineLoss on impairment¥29

Reportable Segment
Wireless LAN/
Industrial Handy Terminal

¥35

Total

Other

Total

¥65

¥65

Reconciliations Consolidated¥65

Millions of Yen
2019

MarineLoss on impairment¥7

Reportable Segment
Wireless LAN/
Industrial Handy Terminal

¥328

Total

Other

¥336

Total

¥336

Reconciliations Consolidated¥336

Thousands of U.S. Dollars
2020

MarineLoss on impairment$265

Reportable Segment
Wireless LAN/
Industrial Handy Terminal

$319

Total

Other

$593

Total

$593

Reconciliations Consolidated$593

5. Information about amortization and unamortized balance of goodwill
Millions of Yen
2020

MarineReportable Segment
Wireless LAN/
Industrial Handy Terminal

Total

Other

Total

Reconciliations Consolidated

Amortization

¥ 36

¥31

¥ 68

¥ 68

¥ 68

Unamortized balance

424

57

481

481

481

Millions of Yen
2019

MarineReportable Segment
Wireless LAN/
Industrial Handy Terminal

Total

Other

Total

Reconciliations Consolidated

Amortization

¥ 34

¥31

¥ 65

¥ 65

¥ 65

Unamortized balance

435

88

523

523

523

Thousands of U.S. Dollars
2020

MarineReportable Segment
Wireless LAN/
Industrial Handy Terminal

Total

Other

Total

Reconciliations Consolidated

Amortization$  328$283$  621$  621$  621

Unamortized balance

3,874

520

4,395

4,395

4,395

32

Subsidiaries
As of February 29, 2020

Consolidated Subsidiaries

EquityOwnership (%)

Country

Company Name

Main BusinessJapan

KYORITSU RADIO SERVICE CO., LTD.
FURUNO KYUSHU HANBAI CO., LTD.
FURUNO KANSAI HANBAI CO., LTD.
FURUNO SYSTEMS CO., LTD.
FURUNO LIFEBEST CO., LTD.
LABOTECH INTERNATIONAL CO., LTD.

Clearing of communication charges
Sales and services of marine electronic equipment
Sales and services of marine electronic equipment
Sales of industrial electronic products
Insurance agent and leasing of marine electronic equipment
EMC and environmental test laboratory

100
100
100
100
100
100

U.S.A.

FURUNO U.S.A., INC.

Sales and services of marine electronic equipment

100

U.K.

FURUNO (UK) LTD.
FURUNO LEASING LTD.

Sales and services of marine electronic equipment
Leasing and sales of marine electronic equipment

100
100

Germany

FURUNO DEUTSCHLAND GmbH

Sales and services of marine electronic equipment

100

Holland

FURUNO EUROPE B. V.

Logistic services for Europe

100

Denmark

FURUNO DANMARK A/SSales and services of marine electronic equipment

100

SwedenFURUNO SVERIGE AB

Sales and services of marine electronic equipment

100

PolandFURUNO POLSKA Sp. zo. o.

Sales and services of marine electronic equipment

100

RussiaFURUNO EURUS LLCSales and services of marine electronic equipment

100

FranceFURUNO FRANCE S.A.S.

Sales and services of marine electronic equipment

100

Italy

FURUNO ITALIA S.R.L.

Sales and services of marine electronic equipment

100

Spain

FURUNO ELECTRIC HOLDING ESPAÑA, S.A. Holding of shares
FURUNO ESPAÑA, S.A.
Sales and services of marine electronic equipment

100
70

NorwayFURUNO NORGE A/SSales and services of marine electronic equipment

100

GreeceFURUNO HELLAS S.A.

Sales and services of marine electronic equipment

100

CyprusFURUNO (CYPRUS) LTD

Sales and services of marine electronic equipment

100

Finland

FURUNO FINLAND OYSales and services of marine electronic equipment

100

China

FURUNO HONG KONG CO., LTD.
FURUNO CHINA CO., LIMITEDFURUNO SHANGHAI CO., LTD.

Manufacturing of marine electronic equipment
Sales and services of marine electronic equipment
Sales and services of marine electronic equipment

100
100
100

Singapore

FURUNO SINGAPORE PTE LTD

Sales and services of marine electronic equipment

100

PanamaFURUNO PANAMA, S.A.

Sales and services of marine electronic equipment

100

Indonesia

PT.FURUNO ELECTRIC INDONESIA

Sales and services of marine electronic equipment

100

Korea

FURUNO KOREA CO., LTD.

Sales and services of marine electronic equipment

100

Malaysia

FURUNO ELECTRIC (MALAYSIA) SDN. BHD.

Sales and services of marine electronic equipment

100

Unconsolidated Subsidiaries

EquityOwnership (%)

Country

Company Name

Main BusinessJapan

FURUNO SOFTECH CO., LTD.
NOVELUCK CO., LTD.

Software development and service
Software development and service

China

Software development and service
FURUNO SOFTECH (DALIAN) CO., LTD.
Sales, services and manufacturing of medical equipment
FUNOTEC (DALIAN) CO., LTD.
COSCO SHIPPING FURUNO Navigation Technology (Shanghai) Co., Ltd. Sales and services of marine electronic equipment
FURUNO DONGGUAN CO., LTD.
Manufacturing of marine electronic equipment

80
100
40
100

New Zealand

ELECTRONIC NAVIGATION LTD.

60

Sales and services of marine electronic equipment

Equity method Subsidiaries
Country

Company Name

Main BusinessFranceSIGNET S.A.S

Sales and software development

33

100
60

EquityOwnership (%)

49.28

F i v e - Ye a r S u m m a r y
FURUNO ELECTRIC CO., LTD. and Consolidated Subsidiaries
Years ended the last day of February

2016

2017

Millions of Yen
2018

2019

2020

Thousands of
U.S. Dollars(Note 1)
2020

¥89,720¥78,674¥79,050¥82,108¥83,066$759,078

Operating income

2,911

1,534

1,992

4,771

2,411

22,032

Income before income taxes and minority interests

3,348

1,467

2,001

4,877

2,699

24,664

Net income (loss)

2,624

1,262

1,236

4,026

2,041

18,651

83.27

40.06

39.25

127.77

64.78

0.59

For the year:
Net sales:

Per share of common stock (Notes 2) (yen and U.S. dollars):
Basic net income (loss)

10.00

8.00

10.00

25.00

20.00

Weighted average number of shares outstanding (thousands)

Cash dividends applicable to the year

31,51331,51231,51231,511

31,511

Research and development cost

4,786

4,253

4,470

4,707

4,266

38,983

Capital expenditure

1,794

1,613

1,295

1,271

1,887

17,243

Depreciation and amortization

2,721

2,924

3,225

3,093

3,246

29,662

Net cash provided by operating activities

1,258

6,417

5,142

4,903

8,041

73,480Net cash used in investing activities(2,612)(4,152)(3,404)(2,912)(3,175)(29,013)

Net cash provided by (used in) financing activities(2,811)(2,201)(1,542)(1,251)(4,194)(38,325)

Total assets¥78,464¥75,724¥76,773¥79,672¥76,133$695,723

Interest-bearing debt

16,736

14,881

13,706

12,982

9,906

90,523

Shareholders’ equity

36,18235,981

38,201

41,191

41,925383,121

Number of employees

2,905

2,894

2,920

2,957

2,926

North America¥ 8,567¥ 7,547¥ 7,873¥ 8,348¥8,092$73,946

Europe19,62816,886

19,10520,047

19,407

177,346

Asia

24,647

17,43817,645

18,354

19,296

176,331

At year-end:

Overseas sales:

Other

3,933

3,247

3,167

2,949

2,686

24,545

Total

56,777

45,11847,791

49,69949,482452,179

Return on sales

2.92%

1.60%

1.56%

4.90%

2.46%

Return on assets

4.10

1.90

2.40

6.50

3.50

Return on equity

7.18

3.50

3.33

10.14

4.91

Debt equity ratio

46.26

41.36

35.88

31.52

23.63

Equity ratio

46.10

47.50

49.80

51.70

55.10

Key ratio (%):

Note: 1. U.S. dollar amounts have been converted from Japanese yen, for convenience only, at the rate of ¥109.43=U.S. $1, the approximate rate of exchange
prevailing at February 29, 2020.
2. See Note 2.s and Note 16 of the Notes to the Consolidated Financial Statements.

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