Consolidated Financial Statements
Yodogawa Steel Works, Ltd.
Years ended March 31, 2009 and 2010
with Report of Independent Auditors

Yodogawa Steel Works, Ltd.
Consolidated Financial Statements
Years ended March 31, 2009 and 2010

Contents
Report of Independent Auditors .......................................................................................... 1

Consolidated Financial Statements
Consolidated Balance Sheets............................................................................................... 2
Consolidated Statements of Operations .............................................................................. 4
Consolidated Statements of Changes in Net Assets............................................................ 5
Consolidated Statements of Cash Flows ............................................................................. 7
Notes to Consolidated Financial Statements ....................................................................... 9Report of Independent Auditors
The Board of Directors
Yodogawa Steel Works, Ltd.

We have audited the accompanying consolidated balance sheets of Yodogawa Steel Works,
Ltd. and consolidated subsidiaries as of March 31, 2009 and 2010, and the related
consolidated statements of operations, changes in net assets, and cash flows for the years
then ended, all expressed in yen. These financial statements are the responsibility of theCompany’s management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in Japan.
Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and disclosures in thefinancial statements. An audit also includes assessing the accounting principles used andsignificant estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in all material
respects, the consolidated financial position of Yodogawa Steel Works, Ltd. andconsolidated subsidiaries at March 31, 2009 and 2010, and the consolidated results of theiroperations and their cash flows for the years then ended in conformity with accounting
principles generally accepted in Japan.
Supplemental Information
As described in Note 2(c), effective the year ended March 31, 2009, the Company anddomestic consolidated subsidiaries have applied the “Accounting Standard for
Measurement of Inventories.”
The U.S. dollar amounts in the accompanying consolidated financial statements withrespect to the year ended March 31, 2010 are presented solely for convenience. Our audit
also included the translation of yen amounts into U.S. dollar amounts and, in our opinion,such translation has been made on the basis described in Note 3.

Osaka, Japan
June 25, 20101

Yodogawa Steel Works, Ltd.
Consolidated Balance Sheets
March 31, 2009 and 2010

Millions of yen
2010
2009
AssetsCurrent assets:
Cash and deposits (Notes 4,5 and 11)
Marketable securities (Notes 5 and 6)
Notes and accounts receivable (Note 5):
Unconsolidated subsidiaries and affiliates(Note 20)
Trade
Less allowance for doubtful receivables
Inventories (Note 7)
Deferred income taxes (Note 13)
Other current assets
Total current assets

Property, plant and equipment:
Land (Notes 8, 15 and 21)
Buildings and structures (Notes 8 and 21)
Machinery, equipment and vehicles(Note 8)
Leased assets
Construction in progress
Less accumulated depreciation
Property, plant and equipment, net

Investments and other assets:
Investments in securities (Notes 5, 6 and 11)
Investments in unconsolidated subsidiaries andaffiliates (Note 5)
Deferred income taxes (Note 13)
Other assets
Total investments and other assets

Total assets (Note 22)2¥

14,026
10,356¥

15,70912,003Thousands of
U.S. dollars(Note 3)
2010$

168,841
129,009

8,255
22,948(183)
31,2702,406
3,964
93,042

9,992
23,089(199)
26,3291,156
2,414
90,493

107,395
248,162(2,139)282,986
12,42525,946
972,625

18,88550,41719,00650,701

204,278
544,938

123,71215
1,850(141,840)
53,039126,76258
562(145,648)
51,441

1,362,446
623
6,040(1,565,434)
552,891

24,71829,333315,273

4,095
1,068
2,908
32,789

4,646
898
3,102
37,97949,936
9,652
33,340408,201¥ 178,870¥ 179,913$ 1,933,717

Thousands of
U.S. dollars(Note 3)2010

Millions of yen
2010
2009
Liabilities and net assets
Current liabilities:
Current portion of finance lease obligations
Notes and accounts payable (Note 5):
Unconsolidated subsidiaries and affiliates
Trade
Construction
Accrued expenses
Accrued income taxes (Note 13)
Other current liabilities (Note 11)
Total current liabilities
Long-term liabilities:
Accrued retirement benefits for employees(Note 12)
Accrued retirement benefits for directors andcorporate auditors
Guarantee deposits (Note 9)
Lease obligations, less current portion
Negative goodwill
Deferred income taxes (Note 13)
Deferred income taxes on land revaluation reserve(Note 13)
Other long-term liabilities
Total long-term liabilities
Net assets:
Shareholders’ equity (Note 14):
Common stock:
Authorized: 753,814,067 shares in 2009 and2010
Issued: 184,186,153 shares in 2009 and 2010
Capital surplus
Retained earnings (Note 23)
Treasury stock, at cost – 18,475,222 shares in2009 and 18,479,353 shares in 2010
Total shareholders’ equity
Valuation and translation adjustments:
Unrealized holding gain on securities (Note 6)
Land revaluation reserve (Note 15)
Translation adjustments
Total valuation and translation adjustments
Stock acquisition rights
Minority interests
Total net assets
Total liabilities and net assets

¥

3

¥

14

$

150

532
13,548
1,268
3,220
1,827
1,335
21,733320
16,021
891
3,095
106
1,619
22,066

3,439
172,195
9,577
33,265
1,139
17,402
237,167

7,190

7,323

78,708

74
3,782
9
106
320

83
3,670
43
112
2,117

892
39,445462
1,204
22,7541,025
22
12,5281,041
119
14,508

11,1891,279
155,933

23,221
23,764
93,061

23,221
23,75588,271

249,581
255,320
948,742(7,429)132,617(7,429)127,818(79,847)
1,373,796

2,567
1,334
(4,547)(646)
74
12,564
144,609¥ 178,870

6,019
1,321
(4,199)3,141
95
12,285
143,339¥ 179,913

64,693
14,198(45,131)
33,760
1,021
132,040
1,540,617$ 1,933,717

See accompanying notes to consolidated financial statements.
3

Yodogawa Steel Works, Ltd.
Consolidated Statements of Operations
Years ended March 31, 2009 and 2010

Millions of yen
2009
2010
Net sales (Notes 20, 21 and 22)
Cost of sales (Note 21)
Gross profit

Thousands of
U.S. dollars(Note 3)2010

¥ 194,601
173,468
21,133¥ 132,419
117,113
15,306$ 1,423,248
1,258,738
164,510

15,994
5,139

13,3052,001

143,00321,507

1,100
(94)
177
268

633
(52)
75
15

6,804
(559)
806
161

(2,459)(244)(2,623)

(123)

(182)

(1,956)

(214)
(41)

(27)
82

(290)
881

–
228

(3,765)(387)(40,466)(4,160)3,981(1,851)(19,895)

Income (loss) before minority interests

3,602(1,934)
1,668
2,313

34
1,325
1,359
(3,210)365
14,241
14,606(34,501)

Minority interests
Net income (loss)

(893)
1,420

(86)
¥ (3,296)(925)(35,426)

Selling, general and administrative expenses(Notes 16 and 21)
Operating income (Note 22)
Other income (expenses):
Interest and dividend income
Interest expense
Equity in earnings of an affiliate
Foreign exchange gains
Loss on impairment of investments insecurities (Note 6)
Loss on sales or disposal of property, plantand equipment, net
Loss on impairment of fixed assets(Notes 8 and 22)(Loss) gain on devaluation of derivatives
Surcharge levied in relation to violation of
the Antimonopoly Law
Other, net (Note 21)
Income (loss) before income taxes and minority
interests
Income taxes (Note 13):
Current
Deferred¥$

See accompanying notes to consolidated financial statements.
4

Yodogawa Steel Works, Ltd.
Consolidated Statements of Changes in Net Assets
Years ended March 31, 2009 and 2010
Millions of yen

Balance at March
31, 2008
Effect of changes
in accounting
policies applied
to an overseas
subsidiary
Cash dividends
Bonuses todirectors andcorporate
auditors of an
overseassubsidiary
Bonuses to
employees of an
overseassubsidiary
Net income
Acquisition oftreasury stock
Disposition oftreasury stockReversal of land
revaluation
reserve
Other changes
Balance at March
31, 2009
Cash dividends
Net loss
Acquisition oftreasury stock
Disposition oftreasury stockReversal of land
revaluation
reserve
Other changes
Balance at March
31, 2010

Translation
adjustments

Totalvaluationandtranslation
adjustments

StockacquisitionrightsMinority
interests

Total net
assetsNumber ofshares issued

Commonstock

CapitalsurplusRetainedearnings

Treasurystock, at
cost

Total
shareholders’equityUnrealized
holding
gain onsecurities

184,186,153¥ 23,221¥ 23,776¥ 94,437¥ (7,431)¥ 134,003¥ 8,680¥ 1,422¥ (1,570)¥ 8,532¥ 49¥ 15,505¥ 158,089

–
–

–
–

–
–

(36)
(2,817)––(36)(2,817)

–
–

–
–

–
–

–
–

–
–

–
–

(36)
(2,817)

–

–

–

(6)

–

(6)

–

–

–

–

–

–

(6)

–
–

–
–

–
–

(19)
1,420

–
–

(19)
1,420

–
–

–
–

–
–

–
–

–
–

–
–

(19)
1,420

–

–

–

–

(32)

(32)

–

–

–

–

–

–

(32)

–

–

(12)

–

34

22

–

–

–

–

–

–

22

–
–

–
–

–
–

82
–

–
–

82
–

–
(6,113)–(88)–(2,977)–(9,178)–25–(2,941)

82(12,094)

184,186,153––

23,221––

23,764––

93,061(1,492)(3,296)(7,429)––132,617(1,492)(3,296)

2,567
–
–

1,334
–
–

(4,547)
–
–

(646)
–
–

74
–
–

12,564––

144,609(1,492)(3,296)

–

–

–

–

(11)

(11)

–

–

–

–

–

–

(11)

–

–

(9)

–

11

2

–

–

–

–

–

–

2

–
–

–
–

–
–

(2)
–

–
–

(2)
–

–
3,452

–
(13)

–
348

–
3,787

–
21

–
(279)

(2)
3,529

184,186,153¥ 23,221¥ 23,755¥ 88,271¥ (7,429)¥ 127,818¥ 6,019¥ 1,321¥ (4,199)¥ 3,141¥ 95¥ 12,285¥ 143,339

Land
revaluation
reserve5

Yodogawa Steel Works, Ltd.
Consolidated Statements of Changes in Net Assets (continued)
Years ended March 31, 2009 and 2010
Thousands of U.S. dollars (Note 3)

Balance at March
31, 2009
Cash dividends
Net loss
Acquisition oftreasury stock
Disposition oftreasury stockReversal of land
revaluation
reserve
Other changes
Balance at March
31, 2010

Land
revaluation
reserve

Translation
adjustments

Totalvaluationandtranslation
adjustments

Commonstock

CapitalsurplusRetainedearnings

Treasurystock, at
cost

Total
shareholders’equityUnrealized
holding
gain onsecurities$ 249,581$ 255,417$ 1,000,225$ (79,847)$ 1,425,376$ 27,590$ 14,338$ (48,871)$ (6,943)

–
–

–
–

(16,036)(35,426)––(16,036)(35,426)

–
–

–
–

–
–

–

–

–

(118)

(118)

–

–

–

(97)

–

118

21

–

–
–

–
–

(21)
–

–
–

(21)
–

$ 249,581$ 255,320$ 948,742$ (79,847)$ 1,373,796

StockacquisitionrightsMinority
interests

Total net
assets$795$ 135,039$ 1,554,267

–
–

–
–

–
–

(16,036)(35,426)

–

–

–

–

(118)

–

–

–

–

–

21

–
37,103

–
(140)

–
3,740

–
40,703–226–(2,999)(21)
37,930$ 64,693$ 14,198$ (45,131)$ 33,760$ 1,021$ 132,040$ 1,540,617

See accompanying notes to consolidated financial statements.
6

Yodogawa Steel Works, Ltd.
Consolidated Statements of Cash Flows
Years ended March 31, 2009 and 2010

Cash flows from operating activities:
Income (loss) before income taxes and minority
interests
Adjustments for:
Depreciation and amortization
Amortization of negative goodwill
Equity in earnings of an affiliate
Increase in accrued retirement benefits
Decrease in accrued bonuses(Decrease) increase in allowance for doubtfulreceivables
Interest and dividend income
Interest expense(Gain) loss on sales of investments in securities
Loss on impairment of investments in securities
Loss on sales or disposal of property, plant andequipment, net
Loss on impairment of fixed assets
Decrease (increase) in notes and accounts
receivable
Decrease in inventories(Decrease) increase in notes and accounts
payableBonuses to directors, corporate auditors andemployees of an overseas subsidiary
Loss (gain) on devaluation of derivatives
Other
SubtotalInterest and dividends received
Interest paid
Surcharge levied in relation to violation of the
Antimonopoly Law
Income taxes paid
Net cash provided by operating activities

Millions of yen
2009
2010

Thousands of
U.S. dollars(Note 3)
2010

3,981

¥ (1,851)$ (19,895)

6,215
(28)
(177)
219
(268)

5,899
(31)
(75)
89
(27)

63,403
(333)
(806)
957
(290)

(147)
(1,100)
94
(2)
2,459

39
(633)
52
24
244

419
(6,804)
559
258
2,623

123
214

182
27

1,956
290

16,43848(1,861)
5,402(20,002)58,061(5,250)2,236

24,033(25)
41(2,710)20,125
1,151
(93)

–
(82)
4,171
13,805
689
(51)

–
(881)
44,829148,377
7,405
(548)

–
(3,663)¥ 17,520(3,765)(1,787)¥ 8,891(40,466)(19,207)$ 95,561¥

7

Yodogawa Steel Works, Ltd.
Consolidated Statements of Cash Flows (continued)
Years ended March 31, 2009 and 2010
Thousands of
U.S. dollars(Note 3)2010

Millions of yen
2010
2009
Cash flows from investing activities:
Investments in time deposits with a maturity ofmore than three months
Proceeds from time deposits with a maturity ofmore than three months
Purchases of marketable securities
Proceeds from sales of marketable securities
Purchases of property, plant and equipment
Proceeds from sales of property, plant andequipment
Purchases of intangible fixed assets
Purchases of investments in securities
Proceeds from sales of investments in securities
Execution of loans receivableCollection of loans receivable
Other
Net cash used in investing activities
Cash flows from financing activities:
Decrease in short-term bank loans
Proceeds from sales of treasury stock
Purchases of treasury stock
Cash dividends paid to the Company’s
shareholders
Cash dividends paid to shareholders of minority
interests of consolidated subsidiaries
Other
Net cash used in financing activities
Effect of exchange rate changes on cash and cash
equivalents
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of the year
Cash and cash equivalents at end of the year
(Note 4)

¥

(839)

¥

(520)

$

(5,589)

639
(202)
1,523
(5,201)904–
210(4,584)

9,716
–
2,257
(49,269)185(22)(1,324)
375
(588)
646
9
(4,799)

28
(47)
(883)
146
(586)
634
7
(4,691)

301(505)(9,491)
1,569(6,298)6,814
76(50,419)

(654)
22
(29)

–
2
(8)

–
21
(86)

(2,836)(1,502)(16,144)(993)(3)(4,493)(680)(12)(2,200)(7,309)(128)(23,646)

(523)
7,705
16,851134
2,134
24,556

1,440
22,936
263,930¥ 24,556¥ 26,690$ 286,866

See accompanying notes to consolidated financial statements.
8

Yodogawa Steel Works, Ltd.
Notes to Consolidated Financial Statements
March 31, 2010

1.

Summary of Significant Accounting Policies(a) Basis of preparation
Yodogawa Steel Works, Ltd. (the “Company”) and its domestic subsidiaries maintaintheir books of account and records in accordance with accounting principles generally
accepted in Japan, and its overseas subsidiaries maintain their books of account inconformity with those of their respective countries of domicile.
The accompanying consolidated financial statements of the Company and consolidated
subsidiaries are prepared on the basis of accounting principles generally accepted inJapan, which are different in certain respects as to the application and disclosure
requirements of International Financial Reporting Standards, and have been compiled
from the consolidated financial statements prepared by the Company as required by the
Financial Instruments and Exchange Act of Japan.
In preparing the accompanying consolidated financial statements, certain
reclassifications and rearrangements have been made to the consolidated financial
statements issued domestically in order to present them in a format which is morefamiliar to readers outside Japan.
Certain reclassifications of previously reported amounts have been made to conformthe consolidated financial statements for the year ended March 31, 2009 to the 2010
presentation. Such reclassifications had no effect on consolidated net assets and net
income.
(b) Basis of consolidation
The accompanying consolidated financial statements include the accounts of theCompany and all subsidiaries over which substantial control is exerted through either
majority ownership of voting stock and/or by other means. All significant
intercompany balances and transactions have been eliminated in consolidation.
An investment in one affiliate (a company over which the Company has the ability to
exercise significant influence) is stated at cost plus equity in its undistributed earnings
or undisposed loss. Consolidated net income or loss includes the Company’s equity
in the current net income or loss of this company after the elimination of unrealizedintercompany profits.

9

Yodogawa Steel Works, Ltd.
Notes to Consolidated Financial Statements (continued)
1.

Summary of Significant Accounting Policies (continued)(b) Basis of consolidation (continued)
All assets and liabilities of the consolidated subsidiaries are revalued on acquisition, if
applicable. The difference, not significant in amount, between the cost of investments
in subsidiaries and the equity in their net assets at their respective dates of acquisition
is charged to income as incurred or amortized over a period of 5 years on a straight-line
basis.
The financial statements of one consolidated subsidiary whose fiscal year end is
December 31 have been included in consolidation on the basis of a full fiscal year after
making the appropriate adjustments for significant transactions during the period fromits fiscal year end to the Company’s balance sheet date.
(c) Foreign currency translation
Monetary assets and liabilities denominated in foreign currencies are translated into
yen at the rates of exchange in effect at the balance sheet date. Other assets andliabilities denominated in foreign currencies are translated at their historical rates. Allrevenues and expenses associated with foreign currencies are translated at the rates of
exchange prevailing when such transactions were made. The resulting exchange gainor loss is credited or charged to income.
The balance sheet accounts of the overseas consolidated subsidiary (except for net
assets excluding minority interests) are translated into yen at the rate of exchange in
effect at the balance sheet date. The components of net assets excluding minority
interests are translated at their respective historical rates of exchange. Revenue andexpense accounts are translated into yen at the average rate of exchange in effectduring the year.
Translation adjustments have been presented as a component of net assets in theaccompanying consolidated financial statements.
(d) Cash and cash equivalents
Cash and cash equivalents consist of cash on hand, deposits with banks withdrawable
on demand, and short-term investments which are readily convertible into cash subject
to an insignificant risk of any changes in their value and which were purchased with an
original maturity of three months or less.

10

Yodogawa Steel Works, Ltd.
Notes to Consolidated Financial Statements (continued)
1.

Summary of Significant Accounting Policies (continued)(e) Securities
The accounting standard for financial instruments requires that securities other thanthose of subsidiaries and affiliates be classified into three categories: trading securities,
held-to-maturity debt securities or other securities. Under this standard, trading
securities are carried at fair value and gain or loss, both realized and unrealized, iscredited or charged to income. Held-to-maturity debt securities are carried atamortized cost. Marketable securities classified as other securities are carried at fairvalue with any changes in unrealized holding gain or loss, net of the applicable income
taxes, reported as a separate component of net assets. Non-marketable securities
classified as other securities are carried at cost. Cost of securities sold is determinedprincipally by the moving average method.
(f) Derivatives
Derivatives are measured at fair value.
(g) Inventories
Inventories of the Company and its domestic consolidated subsidiaries are principallystated at the lower of cost or net selling value, cost being determined by the averagemethod. Inventories of the overseas consolidated subsidiary are stated at the lower ofcost or net selling value, cost being determined by the moving average method.
(h) Property, plant and equipment and depreciation (except for leased assets)
Depreciation of property, plant and equipment is calculated by the declining-balancemethod over the estimated useful lives of the respective assets, except that thestraight-line method is applied to buildings (other than structures attached to thebuildings) acquired on or after April 1, 1998.
Depreciation of property, plant and equipment at the overseas consolidated subsidiaryis calculated by the straight-line method.
The useful lives adopted for calculating depreciation are principally as follows:
Buildings and structures
Machinery, equipment and vehicles

3 to 60 years
3 to 36 years

Significant renewals and additions are capitalized at cost. Maintenance and repairs
are charged to income as incurred.

11

Yodogawa Steel Works, Ltd.
Notes to Consolidated Financial Statements (continued)
1.

Summary of Significant Accounting Policies (continued)(h) Property, plant and equipment and depreciation (except for leased assets)(continued)
Supplementary Information
After the revision of the Corporation Tax Law, effective the year ended March 31,
2009, the Company and its domestic subsidiaries reviewed the estimated useful lives ofcertain machinery and changed them. As a result, operating income decreased by¥304 million and income before income taxes and minority interests decreased by ¥312
million for the year ended March 31, 2009 from the corresponding amounts which
would have been recorded under the method applied in the previous year.
(i) Intangible assets and amortization (except for leased assets)
Intangible assets are stated on the basis of cost. Amortization is calculated by thestraight-line method over the estimated useful lives of the respective assets.
(j) Research and development costs and computer software
Research and development costs are charged to income as incurred.
Expenditures relating to the development of computer software intended for internal
use are charged to income when incurred, unless these are deemed to contribute to thegeneration of future income or cost savings. Such expenditures are capitalized asassets and amortized by the straight-line method over their estimated useful life of 5
years.
(k) Leases
Leased assets under finance lease transactions which do not transfer ownership of theleased assets to the lessee are depreciated to a residual value of zero by the straight-line
method using the contract term as the useful life. Among the finance leasetransactions which do not transfer ownership of the leased assets to the lessees, thosethat started on or before March 31, 2008 are accounted for in the same manner as
operating leases.
(l) Allowance for doubtful receivables
The Company and its consolidated subsidiaries provide an allowance for doubtfulreceivables at an amount calculated based on their historical experience of bad debts on
ordinary receivables plus an additional estimate of probable specific bad debts from
customers experiencing financial difficulties.

12

Yodogawa Steel Works, Ltd.
Notes to Consolidated Financial Statements (continued)
1.

Summary of Significant Accounting Policies (continued)(m) Income taxes
Deferred income taxes are provided for temporary differences between the balances ofassets and liabilities for financial reporting purposes and the corresponding balances
for tax reporting purposes.
(n) Retirement benefits
Employees of the Company and its consolidated subsidiaries are covered by
employees’ retirement benefit and employees’ pension plans. The employees’
retirement benefit plans provide for a lump-sum payment determined by reference totheir basic salary, length of service and conditions under which termination occurs.
Accrued retirement benefits for employees are provided principally at an amountcalculated based on the retirement benefit obligation less the fair value of the pension
plan assets as adjusted for unrecognized actuarial gain or loss and unrecognized priorservice cost. The retirement benefit obligation is attributed to each period by thestraight-line method over the estimated remaining years of service of the eligible
employees.
Actuarial gain or loss is amortized in the year following the year in which the gain orloss is recognized principally by the straight-line method over a period of 10 years,
which is within the estimated average remaining years of service of the eligible
employees.
Prior service cost is being amortized as incurred by the straight-line method over a
period of 15 years, which is within the estimated average remaining years of service ofthe eligible employees.
The directors and corporate auditors of the Company’s domestic consolidated
subsidiaries have customarily been entitled to lump-sum payments under the unfunded
retirement benefit plans. The provision for retirement benefits for directors andcorporate auditors has been made at an estimated amount based on the Company’s oreach consolidated subsidiary’s internal rules.
(o) Recognition of revenues and costs of construction contracts
Revenues and costs of construction contracts that commenced on or after April 1, 2009,of which the percentage of completion can be reliably estimated, are recognized by thepercentage-of-completion method. The percentage of completion is calculated at thecost incurred as a percentage of the estimated total cost. The completed-contract
method continues to be adopted for contracts for which the percentage of completioncannot be reliably estimated.

13

Yodogawa Steel Works, Ltd.
Notes to Consolidated Financial Statements (continued)
1.

Summary of Significant Accounting Policies (continued)(p) Hedge accounting
Gain or loss on derivatives designated as hedging instruments is deferred until the loss
or gain on the underlying hedged items is recognized. Receivables hedged byforward foreign exchange contracts which meet certain conditions are translated at thecorresponding foreign exchange contract rates.

2.

Changes in Accounting Policies(a) Recognition of revenues and costs of construction contracts
Until the year ended March 31, 2009, revenues and costs of construction contracts wererecognized by the completed-contract method. Effective the year ended March 31,
2010, the Company and its consolidated subsidiaries have applied “AccountingStandard for Construction Contracts” (Accounting Standards Board of Japan (“ASBJ”)
Statement No.15 issued on December 27, 2007) and “Guidance on AccountingStandard for Construction Contracts” (ASBJ Guidance No.18 issued on December 27,2007). Under the new accounting standard and guidance, revenues and costs ofconstruction contracts that commenced on or after April 1, 2009, of which thepercentage of completion can be reliably estimated, are recognized by thepercentage-of-completion method. The percentage of completion is calculated at thecost incurred as a percentage of the estimated total cost. The completed-contract
method continues to be applied for contracts for which the percentage of completioncannot be reliably estimated. As a result, net sales increased by ¥99 million ($1,064
thousand), operating income increased by ¥15 million ($161 thousand) and loss before
income taxes and minority interests decreased by ¥15 million ($161 thousand) for theyear ended March 31, 2010 from the corresponding amounts which would have beenrecorded under the method applied in the previous year.
(b) Retirement benefits
Effective the year ended March 31, 2010, “Partial Amendments to AccountingStandard for Retirement Benefits (Part 3)” (ASBJ Statement No.19 issued on July 31,2008) has been applied. There was no effect of this change on operating income andloss before income taxes and minority interests.

14

Yodogawa Steel Works, Ltd.
Notes to Consolidated Financial Statements (continued)
2.

Changes in Accounting Policies (continued)(c) Measurement of inventories
Previously, the cost method based on the average method was principally adopted formeasuring inventories held for sale in the ordinary course of business. Effective theyear ended March 31, 2009, the “Accounting Standard for Measurement of
Inventories” (ASBJ Statement No.9 issued on July 5, 2006) has been applied, and now
these inventories are principally measured by the lower of cost or net selling value, cost
being determined by the average method. As a result, operating income decreased by¥4,292 million and income before income taxes and minority interests decreased by¥4,325 million for the year ended March 31, 2009 from the corresponding amounts
which would have been recorded under the method applied in the previous year.
(d) Leases
Previously, finance lease transactions which do not transfer ownership of leased assets
were accounted for as the accounting treatment for operating lease transactions.
However, effective the year ended March 31, 2009, the Company applied “AccountingStandard for Lease Transactions” (ASBJ Statement No.13 originally issued by the First
Committee of the Business Accounting Council on June 17, 1993 and revised on
March 30, 2007) and “Guidance on Accounting Standard for Lease Transactions”(ASBJ Guidance No.16 originally issued by the Accounting System Committee of theJapanese Institute of Certified Public Accountants on January 18, 1994 and revised on
March 30, 2007). Under these accounting standards, transactions are accounted for in
the same manner as ordinary sale and purchase transactions. There was no effect of
this change on operating income and income before income taxes and minority
interests.
(e) Accounting policies applied to an overseas subsidiary
Effective the year ended March 31, 2009, “Practical Solution on Unification of
Accounting Policies Applied to Foreign Subsidiaries for Consolidated Financial
Statements” (ASBJ Practical Issues Task Force No.18 (“PITF No.18”) issued on May
17, 2006) has been applied. As a result, operating income decreased by ¥7 million
and income before income taxes and minority interests decreased by ¥0 million for theyear ended March 31, 2009 from the corresponding amounts which would have beenrecorded under the method applied in the previous year.

15

Yodogawa Steel Works, Ltd.
Notes to Consolidated Financial Statements (continued)
3.

U.S. Dollar Amounts

The translation of yen amounts into U.S. dollar amounts is included solely for theconvenience of readers outside Japan and has been made at the rate of ¥93.04 = U.S.$1.00,
the approximate exchange rate prevailing on March 31, 2010. The translation should not
be construed as a representation that yen have been, could have been, or could in the future
be, converted into U.S. dollars at the above or any other rate.

4.

Cash and Cash Equivalents

A reconciliation of cash and deposits shown in the accompanying consolidated balance
sheets to cash and cash equivalents shown in the accompanying consolidated statements ofcash flows at March 31, 2009 and 2010 is presented as follows:
Millions of yen
2009
2010
Cash and deposits
Investment trust funds
Beneficiary interests in trusts and other
Time deposits with a maturity of morethan three months
Cash and cash equivalents

5.

Thousands of
U.S. dollars
2010¥ 14,026
10,1361,000¥ 15,709
11,203500$ 168,841
120,411
5,374

(606)
¥ 24,556(722)¥ 26,690(7,760)$ 286,866

Financial Instruments

Effective the year ended March 31, 2010, “Accounting Standard for Financial Instruments”(ASBJ Statement No.10 issued on March 10, 2008) and “Guidance on Disclosures about
Fair Value of Financial Instruments” (ASBJ Guidance No. 19 issued on March 10, 2008)
have been applied.
Overview(a) Policy for financial instruments
In consideration of plans for capital investment, the Company and its consolidated
subsidiaries (collectively, the “Group”) primarily utilize cash in hand. In case of alack of cash in hand, the Group raises funds by bank borrowings and bond issuances.
The Group manages temporary cash surpluses through low-risk financial assets. The
Group uses derivatives for the purpose of reducing risk and does not enter into
derivatives for speculative purposes. In addition, compound financial instrumentsthat contain embedded derivatives are utilized by the Group in order to manage surplus
funds.

16

Yodogawa Steel Works, Ltd.
Notes to Consolidated Financial Statements (continued)
5.

Financial Instruments (continued)

Overview (continued)(b) Types of financial instruments and related risk
Trade receivables, notes and accounts receivables, are exposed to credit risk in relation
to customers. In addition, the Group is exposed to foreign currency exchange risk
arising from trade receivables denominated in foreign currencies.
Marketable securities and investments in securities are exposed to market risk. The
former is composed of mainly held-to-maturity debt securities and the shares ofcommon stock of other companies with which the Group has business relationships.
The latter is composed of mainly negotiable certificates of deposits and commercial
paper.
Trade payables, notes and accounts payable, have payment due dates within six months.
The Group is exposed to foreign currency exchange risk arising from trade payables
denominated in foreign currencies. In case of financing, the interest rate for short-termborrowings is fixed.
Regarding derivatives, the Group enters into forward foreign exchange contracts to
reduce the foreign currency exchange risk arising from trade receivables denominatedin foreign currencies.
Information regarding the method of hedge accounting is found in Note 1(p).
(c) Risk management for financial instruments
Regarding trade receivables, each related division monitors the credit worthiness of
their main customers periodically, and monitors due dates and outstanding balances bycustomer. In addition, the Company and its domestic consolidated subsidiaries aremaking efforts to identify and mitigate risks of bad debts from customers who havefinancial difficulties.
The overseas consolidated subsidiary requests customers to issue non-cancelable lettersof credit to hedge credit risk.
The Group only acquires held-to-maturity debt securities and commercial paper issuedby companies with high credit ratings or sound credit profiles. Accordingly, theGroup believes that the credit risk deriving from such securities is insignificant. The
Group also believes that the credit risk of derivatives is insignificant as the Group
enters into derivative transactions only with financial institutions with high credit
ratings.

17

Yodogawa Steel Works, Ltd.
Notes to Consolidated Financial Statements (continued)
5.

Financial Instruments (continued)

Overview (continued)(c) Risk management for financial instruments (continued)
For trade receivables denominated in foreign currencies, the Group enters into forward
foreign exchange contracts to hedge the risks arising from fluctuations in foreignexchanges rates.
For marketable securities and investments in securities, the Group periodically reviews
the fair value of such financial instruments and the financial position of the issuers.
In addition, the Group continuously evaluates whether or not securities other than thoseclassified as held-to-maturity debt securities should be maintained taking into accounttheir fair value and relationships with the issuers.
The Group has established policies for approving and reporting the purpose, nature,counterparty, inherent risk, limit on loss and the level of risk of each transaction.
Under these policies governing derivatives, trading is not entered into for speculative
purposes.
Based on a report from each division, the Group prepares and updates its cash flowplans on a timely basis and maintains adequate solvency to manage liquidity risk. In
order to provide for unexpected cash requirements, the Company enters into theline-of-credit agreements with certain financial institutions and its overseas
consolidated subsidiary is able to obtain short-term borrowings by certain financial
institutions.
(d) Supplementary explanation of the estimated fair value of financial instruments
The fair value of financial instruments is based on their quoted market price, if
available. When there is no quoted market price available, fair value is reasonably
estimated. Since various assumptions and factors are reflected in estimating the fairvalue, different assumptions and factors could result in different fair value.

18

Yodogawa Steel Works, Ltd.
Notes to Consolidated Financial Statements (continued)
5.

Financial Instruments (continued)

Estimated Fair Value of Financial Instruments
Carrying value of financial instruments on the consolidated balance sheet as of March 31,
2010 and unrealized loss are shown in the following table. The following table does notinclude financial instruments for which it is extremely difficult to determine the fair value.

Assets:Cash and deposits
Notes and accounts receivable
Unconsolidated subsidiaries andaffiliates
Trade
Marketable securities and investments insecurities
Total assets
Liabilities:
Notes and accounts payable
Unconsolidated subsidiaries andaffiliates
Trade
Total liabilities

Carrying
value

Millions of yen
2010
Estimated
fair value¥ 15,709¥ 15,709

9,992
23,0899,992
23,089––30,917¥ 79,707

30,527¥ 79,317(390)¥ (390)

¥

¥

¥

320
16,021¥ 16,341

320
16,021¥ 16,341

Unrealized
loss
¥

¥

–

–
–
–

Thousands of U.S. dollars
2010
Carrying
Estimated
Unrealizedvalue
fair value
loss
Assets:Cash and deposits
Notes and accounts receivable
Unconsolidated subsidiaries andaffiliates
Trade
Marketable securities and investments insecurities
Total assets
Liabilities:
Notes and accounts payable
Unconsolidated subsidiaries andaffiliates
Trade
Total liabilities$ 168,841$ 168,841

107,395
248,162

107,395
248,162––

332,298$ 856,696

328,106$ 852,504(4,192)$ (4,192)

$

$

$

3,439
172,195$ 175,634

3,439
172,195$ 175,634

$

$

–

–
–
–
19

Yodogawa Steel Works, Ltd.
Notes to Consolidated Financial Statements (continued)
5.

Financial Instruments (continued)

Estimated Fair Value of Financial Instruments (continued)
Calculation method of estimated fair value of financial instruments is as follows:
Cash and deposits and notes and accounts receivable
Since these items are settled in a short period of time, their carrying value approximates fairvalue.
Marketable securities and investments in securities
The fair value of equity securities is based on quoted market prices. The fair value of debt
securities is based on either quoted market prices or the prices provided by the financial
institutions making markets in these securities. For information on securities classified byholding purpose, please refer to Note 6.
Notes and accounts payable
Since these items are settled in a short period of time, their carrying value approximates thefair value.
The carrying value of financial instruments without determinable market value at March 31,
2010 is presented as follows:
Thousands of
U.S. dollars

Millions of yen
2010
Investments in unconsolidated
subsidiaries and affiliates
Unlisted stocks
Money trusts
Negotiable certificates of deposit
Investment in a limited liability
partnership
Preferred subscription certificatesTotal¥ 4,646
728
3,704
4,500

$ 49,936
7,824
39,811
48,366387
1,100¥ 15,065

4,160
11,823$ 161,920

Because no quoted market price is available, it is extremely difficult to determine the fairvalue. Therefore, the above financial instruments are not included as part of the amounts
presented in the preceding fair value of financial instruments table.

20

Yodogawa Steel Works, Ltd.
Notes to Consolidated Financial Statements (continued)
5.

Financial Instruments (continued)

Estimated Fair Value of Financial Instruments (continued)
The redemption schedule for monetary assets and investments by maturity dates at March
31, 2010 are as follows:
Millions of yen
2010
Due in one
year or less
Deposits
Notes and accounts receivable
Marketable securities andinvestments in securities
Held-to-maturity debt
securities
National and local
government bonds
Corporate bonds
Other marketable securities
with maturities
Other
Total

¥ 15,647
33,081

Due after one Due after five
year through years through Due after ten
five years
ten years
years
¥

–
–

¥

–
–

¥

–
–

0
3,800

480
200

–
500

–
3,500

8,000
¥ 60,528

–
¥ 680

–
¥ 500

–
¥ 3,500

Thousands of U.S. dollars
2010
Due in one
year or less
Deposits
Notes and accounts receivable
Marketable securities andinvestments in securities
Held-to-maturity debt
securities
National and local
government bonds
Corporate bonds
Other marketable securities
with maturities
Other
Total

$ 168,175
355,557

Due after one Due after five
year through years through Due after ten
years
five years
ten years
$

–
–

$

–
–

$

–
–

0
40,843

5,159
2,150

–
5,374

–
37,61885,984$ 650,559–$ 7,309–$ 5,374–$ 37,618

21

Yodogawa Steel Works, Ltd.
Notes to Consolidated Financial Statements (continued)
6.

Securities

Marketable securities classified as held-to-maturity debt securities at March 31, 2009 and2010 are summarized as follows:

Carrying
value
Securities whose estimated fair value
exceeds their carrying value:
Government bonds
Corporate bonds
Securities whose estimated fair value
does not exceed their carrying value:
Government bonds
Corporate bonds
Other
Total

Securities whose estimated fair value
exceeds their carrying value:
Government bonds
Corporate bonds
Securities whose estimated fair value
does not exceed their carrying value:
Government bonds
Corporate bonds
Other
Total

¥

270
1,499
1,769

Millions of yen
2009
Estimated
fair value

¥

272
1,499
1,771

Unrealized
gain (loss)

¥

2
0
2

20
6,401
10
6,431
¥ 8,200

10
5,254
10
5,274
¥ 7,045(10)(1,147)(0)(1,157)¥ (1,155)

Carrying
value

Millions of yen
2010
Estimated
fair value

Unrealized
gain (loss)

¥

481
2,000
2,481

–
5,192
–
5,192
¥ 7,673

¥

485
2,008
2,493

–
4,790
–
4,790
¥ 7,283

¥

¥

4
8
12

–
(402)
–
(402)
(390)

22

Yodogawa Steel Works, Ltd.
Notes to Consolidated Financial Statements (continued)
6.

Securities (continued)
Thousands of U.S. dollars

Securities whose estimated fair value
exceeds their carrying value:
Government bonds
Corporate bonds
Securities whose estimated fair value
does not exceed their carrying value:
Government bonds
Corporate bonds
Other
Total

Carrying
value

2010
Estimated
fair value$ 5,170
21,496
26,666$ 5,213
21,582
26,795$–55,804–55,804$ 82,470–
51,483–51,483$ 78,278–(4,321)–(4,321)$ (4,192)

Unrealized
gain (loss)

43
86
129

Other securities with determinable market value at March 31, 2009 and 2010 are
summarized as follows:

Securities whose carrying value exceeds
their acquisition costs:
Equity securities
Corporate bonds
Securities whose carrying value does
not exceed their acquisition costs:
Equity securities
Other
Total

Acquisition
costs

Millions of yen
2009
Carrying
value

Unrealized
gain (loss)¥ 6,551490
7,041¥ 11,764
493
12,257¥ 5,213
3
5,216

7,348
98
7,446
¥ 14,487

6,433
87
6,520
¥ 18,777

(915)
(11)
(926)
¥ 4,29023

Yodogawa Steel Works, Ltd.
Notes to Consolidated Financial Statements (continued)
6.

Securities (continued)

Securities whose carrying value exceeds
their acquisition costs:
Equity securities
Corporate bonds
Securities whose carrying value does notexceed their acquisition costs:
Equity securities
Other
Total

Acquisition
costs

Millions of yen
2010
Carrying
value

Unrealized
gain (loss)¥ 12,232
490
12,722¥ 21,474
493
21,967¥ 9,242
3
9,245

1,264
98
1,362
¥ 14,084

1,181
96
1,277
¥ 23,244

(83)
(2)
(85)
¥ 9,160

Thousands of U.S. dollars
2010
Carrying
Unrealized
Acquisition
costs
value
gain (loss)
Securities whose carrying value exceeds
their acquisition costs:
Equity securities
Corporate bonds
Securities whose carrying value does notexceed their acquisition costs:
Equity securities
Other
Total

$ 131,470
5,267
136,737$ 230,804
5,299
236,103$ 99,334
32
99,366

13,586
1,053
14,639$ 151,376

12,693
1,032
13,725$ 249,828

(893)
(21)
(914)
$ 98,452

Sales of securities classified as other securities for the years ended March 31, 2009 and2010 are summarized as follows:

Millions of yen
2009
2010
Sales
Aggregate gain
Aggregate loss

¥ 1,018
4
(0)

¥–
–
–

Thousands of
U.S. dollars
2010
$–
–
–
24

Yodogawa Steel Works, Ltd.
Notes to Consolidated Financial Statements (continued)
6.

Securities (continued)

The Company recorded losses on impairment of investments in securities withdeterminable market value of ¥2,195 million and ¥235 million ($2,526 thousand) for theyears ended March 31, 2009 and 2010, respectively.

7.

Inventories

The following is a summary of inventories at March 31, 2009 and 2010:

Finished goods
Work in process
Raw materials and supplies

8.

Millions of yen
2010
2009
¥ 13,183¥ 11,464
4,608
3,873
13,47910,992¥ 31,270¥ 26,329

Thousands of
U.S. dollars
2010$ 123,216
41,627
118,143$ 282,986

Loss on Impairment of Fixed Assets

The Company and its consolidated subsidiaries recognized loss on impairment of fixed
assets for the years ended March 31, 2009 and 2010 as follows:

Location
Use
Classification
Kure City,
Idle assets Land
Hiroshima Prefecture
Kamakura City,
Idle assets Land
Kanagawa Prefecture
Nishiwaki City,
Golf course Buildings andHyogo Prefecture
structures, andotherVillage of Hakuba,
Idle assets Land
Nagano Prefecture
Yaizu City,
Idle assets Land, buildings
Shizuoka Prefectureand structures,and other
Kawaguchi City,
Idle assets Land, buildings
Saitama Prefectureand structures
Suzaka City,
Idle assets Land
Nagano Prefecture
Total

Millions of yen
2009
2010

Thousands of
U.S. dollars
2010

¥ 76

¥ 1

$ 11

1

–

–

76

–

–

2

0

0

59

–

–

–

16

172

–
¥ 214

10
¥ 27

107
$ 290

25

Yodogawa Steel Works, Ltd.
Notes to Consolidated Financial Statements (continued)
8.

Loss on Impairment of Fixed Assets (continued)

The Company and its consolidated subsidiaries group fixed assets by management segment,each of which continuously records cash receipts and payments. They group idle assets
which are not utilized in their operations on an individual asset basis.
Consequently, the Company and its consolidated subsidiaries have written down the
carrying value of the golf courses group fixed assets for the year ended March 31, 2009 totheir net recoverable value due to a significant decline in their fair value, and have recorded
related losses on impairment of fixed assets of ¥76 million for the year ended March 31,
2009. The loss on impairment of fixed assets consisted of buildings and structures of ¥73
million, machinery, equipment and vehicles of ¥3 million for the year ended March 31,
2009. The recoverable amounts of these assets are measured at estimated selling value
which is measured at net realizable value based on appraisals conducted by real estateappraisers.
In addition, the Company and its consolidated subsidiaries have written down the carrying
value of the idle assets owned by the Company and its consolidated subsidiaries for theyears ended March 31, 2009 and 2010, which are not expected to be utilized in the future,to their respective net recoverable value, and have recorded a related loss on impairment of
fixed assets of ¥138 million and ¥27 million ($290 thousand) for the years ended March 31,
2009 and 2010, respectively. This loss on impairment of fixed assets consisted of land of¥137 million and other of ¥1 million for the year ended March 31, 2009, and land of ¥22
million ($236 thousand) and buildings and structures of ¥5 million ($54 thousand) for theyear ended March 31, 2010. The recoverable amounts of these assets are measured at
estimated selling value, at a valuation assessed for property tax purposes or at thecomparable published land prices.

9.

Guarantee Deposits

Guarantee deposits consisted of interest-free deposits, most of which were golf-clubmembership deposits, and interest-bearing deposits, which were principally deposits from
customers at average annual interest rates of 0.86% and 1.00% at March 31, 2009 and 2010,
respectively.
Interest-free deposits and interest-bearing deposits at March 31, 2009 and 2010 were as
follows:

Interest-free deposits
Interest-bearing deposits

Millions of yen
2009
2010
¥ 3,081¥ 2,988
701682¥ 3,670¥ 3,782

Thousands of
U.S. dollars
2010$ 32,115
7,330$ 39,445

26

Yodogawa Steel Works, Ltd.
Notes to Consolidated Financial Statements (continued)
10.

Line-of-credit Agreements

In order to achieve more efficient and flexible financing, the Company has concluded
line-of-credit agreements with certain financial institutions. The status of these lines ofcredit at March 31, 2009 and 2010 was as follows:

Millions of yen
2009
2010
Lines of credit
Credit utilized
Available credit¥ 21,400–¥ 21,400¥ 20,700–¥ 20,700

Thousands of
U.S. dollars
2010$ 222,485–$ 222,485

11. Pledged Assets
Assets pledged as collateral for indebtedness at March 31, 2009 and 2010 are summarized
as follows:

Cash and deposits
Investments in securities

Millions of yen
2009
2010
¥ –
¥ 60
86
16
¥ 86
¥ 76

Thousands of
U.S. dollars
2010
$ 645
172
$ 817

Indebtedness secured by these assets as collateral was ¥53 million and ¥49 million ($527
thousand), a component of other current liabilities at March 31, 2009 and 2010,
respectively.

27

Yodogawa Steel Works, Ltd.
Notes to Consolidated Financial Statements (continued)
12. Retirement Benefits
The funded and accrued status of the employees’ defined benefit pension plans of theCompany and its consolidated subsidiaries, and the amounts recognized in theaccompanying consolidated balance sheets at March 31, 2009 and 2010 are summarized asfollows:

Retirement benefit obligation
Plan assets at fair value
Unfunded retirement benefit obligation
Unrecognized actuarial loss
Net retirement benefit obligation
Prepaid pension costAccrued retirement benefits

Millions of yen
2010
2009
¥ (13,647)¥ (13,200)
4,249
4,496
(9,398)(8,704)
3,171
2,184(6,227)(6,520)963803¥ (7,190)¥ (7,323)

Thousands of
U.S. dollars
2010$ (141,874)
48,323(93,551)
23,474(70,077)
8,631$ (78,708)

As permitted under the accounting standards for retirement benefits, certain domestic
consolidated subsidiaries calculate accrued retirement benefits for their employees bysimplified methods.
The components of retirement benefit expenses for the years ended March 31, 2009 and2010 are outlined as follows:

Service cost
Interest cost
Expected return on plan assets
Amortization of actuarial loss
Total

Millions of yen
2009
2010
¥ 746
¥ 566
335
255
(127)
(74)
370
194
¥ 1,148¥ 1,117

Thousands of
U.S. dollars
2010$ 6,083
2,741
(795)
3,977
$ 12,006

The retirement benefit expenses of certain domestic consolidated subsidiaries which were
calculated by simplified methods have been included in service cost in the above table.
The assumptions used in accounting for the above benefit plans for the years ended March
31, 2009 and 2010 were as follows:

Discount rate
Expected rates of return on plan assets

2009

2010

Principally 2.0%
Principally 2.4%

Principally 2.0%
Principally 1.8%

28

Yodogawa Steel Works, Ltd.
Notes to Consolidated Financial Statements (continued)
13. Income Taxes
Income taxes applicable to the Company and its domestic consolidated subsidiaries
comprise corporation, enterprise and inhabitants’ taxes which, in the aggregate, resulted ina statutory tax rate of approximately 40.5% for the years ended March 31, 2009 and 2010.
A reconciliation of the statutory tax rate and the effective tax rate for the year ended March
31, 2009 was omitted because the difference between these rates was less than 5% of thestatutory tax rate. It has not been provided for the year ended March 31, 2010 due to therecording of a loss before income taxes and minority interests.
The significant components of the deferred tax assets and liabilities of the Company and its
consolidated subsidiaries at March 31, 2009 and 2010 are summarized as follows:

Deferred tax assets:
Accrued retirement benefits
Allowance for doubtful receivables
Accrued bonuses
Valuation loss on inventories
Foreign tax credits
Loss on guarantee resulting fromliquidation of an overseas affiliate
Tax loss carryforwards
Loss on impairment of investments insecurities and golf-club memberships
Loss on impairment of fixed assets
Other
Gross deferred tax assets
Less valuation allowance
Total deferred tax assets
Deferred tax liabilities:
Dividends from an overseas subsidiary
Unrealized holding gain on securities
Land revaluation reserve
Reserve for deferred taxation oncontributions for acquisition of property
Other
Total deferred tax liabilities
Net deferred tax assets (liabilities)

Millions of yen
2009
2010

Thousands of
U.S. dollars
2010¥ 2,448
70
335
2,148
–

¥ 2,423
78
325
135
402

$ 26,043
838
3,493
1,451
4,321

385
955

–
1,580

–
16,982

963
150
835
8,289
(2,585)
5,704

984
146
953
7,026
(2,783)
4,243

10,576
1,569
10,24375,516(29,912)45,604(160)(1,369)(1,025)(25)(3,287)(1,041)(269)(35,329)(11,189)

(887)
(134)
(3,575)¥ 2,129

(856)
(138)
(5,347)¥ (1,104)(9,200)(1,483)(57,470)$ (11,866)29

Yodogawa Steel Works, Ltd.
Notes to Consolidated Financial Statements (continued)
14. Shareholders’ Equity
The Corporation Law of Japan (the “Law”) provides that an amount equal to 10% of theamount 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 andthe legal reserve, respectively, until the sum of the capital reserve and the legal reserve
equals 25% of the capital stock account. Such distributions can be made at any time byresolution of the shareholders, or by the Board of Directors if certain conditions are met.
The Company’s legal reserve was nil at March 31, 2009 and 2010.
Stock options
Stock option expenses charged to income for the years ended March 31, 2009 and 2010
amounted to ¥24 million and ¥25 million ($269 thousand), respectively.
In accordance with the former Commercial Code of Japan (“the Code”), a stock option planfor certain directors and executive officers of the Company was approved at the annual
general meeting of the shareholders held on June 29, 2004. Under the terms of this plan,
up to 81,000 shares of common stock were granted at ¥1 ($0.01) per share. The options
became exercisable on July 13, 2004 and are scheduled to expire on June 29, 2024.
In accordance with the Code, a stock option plan for certain directors and executive officersof the Company was approved at the annual general meeting of the shareholders held on
June 29, 2005. Under the terms of this plan, up to 62,000 shares of common stock were
granted at ¥1 ($0.01) per share. The options became exercisable on July 15, 2005 and arescheduled to expire on June 29, 2025.
In accordance with the Code, a stock option plan for certain directors and executive officersof the Company was approved at the annual general meeting of the shareholders held on
June 29, 2006. Under the terms of this plan, up to 53,000 shares of common stock were
granted at ¥1 ($0.01) per share. The options became exercisable on August 1, 2006 andare scheduled to expire on June 29, 2026.
In accordance with the Law, a stock option plan for certain directors and executive officersof the Company was approved at a meeting of the Board of Directors held on July 17, 2007.
Under the terms of this plan, up to 43,000 shares of common stock were granted at ¥1($0.01) per share. The options became exercisable on August 2, 2007 and are scheduled
to expire on June 29, 2027.
In accordance with the Law, a stock option plan for certain directors and executive officersof the Company was approved at a meeting of the Board of Directors held on July 15, 2008.
Under the terms of this plan, up to 60,000 shares of common stock were granted at ¥1($0.01) per share. The options became exercisable on July 31, 2008 and are scheduled to
expire on June 29, 2028.

30

Yodogawa Steel Works, Ltd.
Notes to Consolidated Financial Statements (continued)
14. Shareholders’ Equity (continued)
In accordance with the Law, a stock option plan for certain directors and executive officersof the Company was approved at a meeting of the Board of Directors held on July 15, 2009.
Under the terms of this plan, up to 69,000 shares of common stock were granted at ¥1($0.01) per share. The options became exercisable on July 31, 2009 and are scheduled to
expire on June 29, 2029.
Treasury stock
Movements in treasury stock during the years ended March 31, 2009 and 2010 are
summarized as follows:

Treasury stock

March 31, 2008
18,473

Treasury stock

March 31, 2009
18,475

Thousands of Shares
2009
Increase
Decrease
70
68
Thousands of Shares
2010
Increase
Decrease
26
22

March 31, 2009
18,475

March 31, 2010
18,47915. Land Revaluation
At March 31, 2000 and 2002, certain consolidated subsidiaries and an affiliate revalued
their land held for business use in accordance with the “Law on Land Revaluation.”
Differences on land revaluation have been accounted for as land revaluation reserve under
net assets and are stated at the Company’s share of the net amount of the relevant tax effect.
The method followed for land revaluation was determined in accordance with the“Enforcement Act Concerning Land Revaluation.”
The fair value of the land revalued at March 31, 2000 and 2002 was less than thecorresponding carrying value by the following amounts at March 31, 2009 and 2010:Land revalued at March 31, 2000
Land revalued at March 31, 2002

Millions of yen
2009
2010
¥ (179)¥ (223)(435)(747)¥ (926)¥ (658)

Thousands of
U.S. dollars
2010$ (2,397)(4,675)$ (7,072)

A certain portion of land revalued at March 31, 2000 and 2002 is related to real estate forinvestment, rental and idle properties at March 31, 2010 in the amount of ¥7 million ($75
thousand) and ¥46 million ($494 thousand), respectively.
31

Yodogawa Steel Works, Ltd.
Notes to Consolidated Financial Statements (continued)
16. Research and Development Costs
Research and development costs included in selling, general and administrative expenses
totaled ¥562 million and ¥488 million ($5,245 thousand) for the years ended March 31,
2009 and 2010, respectively.

17. Leases
The following pro forma amounts represent the acquisition costs, accumulated depreciationand net book value of the leased assets at March 31, 2009 and 2010, which would havebeen reflected in the accompanying consolidated balance sheets if finance leases other thanthose which transfer the ownership of the leased assets to the Company and its consolidated
subsidiaries (currently accounted for as operating leases) were capitalized:
Millions of yen
2009
2010
Acquisition Accumulated Net book Acquisition Accumulated Net bookcosts
depreciation
value
costs
depreciation
value
Machinery,equipment
and vehicles

¥ 278

¥ 205

¥ 73

¥ 90

¥ 62

¥ 28

Thousands of U.S dollars
2010
Acquisition Accumulated Net bookcosts
depreciation
value
Machinery,equipment andvehicles

$ 967

$ 666

$ 301

The related lease payments and depreciation for the years ended March 31, 2009 and 2010
were as follows:
Millions of yen
2009
2010

Thousands of
U.S. dollars
2010

Lease payments

¥ 75

¥ 45

$ 484

Depreciation

75

45

484

Depreciation is calculated by the straight-line method over the respective lease terms
assuming a nil residual value.
No loss on impairment has been recorded on leased assets for the years ended March 31,
2009 and 2010.

32

Yodogawa Steel Works, Ltd.
Notes to Consolidated Financial Statements (continued)
17. Leases (continued)
The related future minimum lease payments (including the interest portion thereon)
subsequent to March 31, 2010 under finance leases other than those which transfer theownership of the leased assets to the Company and its consolidated subsidiaries are
summarized as follows:Year ending March 31,

Millions of yen
¥ 16
12
¥ 28

2011
2012 and thereafterThousands of
U.S. dollars
$ 172
129
$ 301

18. Derivatives
The open currency-related derivatives positions designated as hedging instruments at
March 31, 2010 are as follows:
Millions of yen
2010

Method ofhedge accounting
Allocation method forforward foreignexchange contracts

Hedge transactions and major
hedged items
Forward foreign exchange contracts:
Selling:
USD Accounts receivable
Total

Contract
value(notional
principal
amount)contract
value over
one year

Estimated
fair value

¥ 488
¥ 488

¥ –
¥ –

¥ –
¥ –

Thousands of U.S. dollars
2010
Contract
value
contract(notional
principal
value over
Estimatedamount)one yearfair value$ 5,245$ 5,245

$–
$–

$ –
$ –

The fair value of forward foreign exchange contracts that qualify for deferral hedge
accounting is included in the carrying value of hedged accounts receivable. Fair value isbased on the prices obtained from financial institutions.

33

Yodogawa Steel Works, Ltd.
Notes to Consolidated Financial Statements (continued)
19. Amounts per Share
Amounts per share at March 31, 2009 and 2010 and for the years then ended were as
follows:
2009¥ 796.39

2010¥ 790.30

U.S. dollars
2010$ 8.49

8.57
8.56
10.00

(19.89)–10.00(0.21)–
0.11

Yen
Net assets
Net income (loss):
Basic
DilutedCash dividends

Amounts per share of net assets are computed based on the number of shares of common
stock outstanding at the year end.
Basic net income (loss) per share is computed based on the net income (loss) attributable toshareholders of common stock and the weighted-average number of shares of common
stock outstanding during the year. Diluted net income per share is computed based on the
net income available for distribution to the shareholders and the weighted-average numberof shares of common stock outstanding during each year after giving effect to the dilutive
potential of shares of common stock to be issued upon the exercise of stock acquisitionrights.
Diluted net income per share for the year ended March 31, 2010 has not been presented
since the Company and consolidated subsidiaries recorded a net loss for the year, although
there were potentially dilutive shares outstanding as of March 31, 2010.
Cash dividends per share represent the cash dividends proposed by the Board of Directors
as applicable to the respective years together with the interim cash dividends paid.

34

Yodogawa Steel Works, Ltd.
Notes to Consolidated Financial Statements (continued)
20. Transactions with Related Parties
Transactions and balances with related parties as of and for the years ended March 31, 2009
and 2010 are summarized as follows:
Transactions
Name ofaffiliatedcompany

Sadoshima
Corporation

Type of transaction
Sales

Account nameNotes and accounts
receivable

Millions of yen
2009
2010
¥ 32,704¥ 25,348
BalancesThousands of
U.S. dollars
2010$ 272,442

Millions of yen
2009
2010

Thousands of
U.S. dollars
2010¥ 7,706$ 100,279¥ 9,330

The Company owns 50.0% of the voting rights of Sadoshima Corporation, a steel productwholesaler for the Company. Certain of its board members serve concurrently as board
members of the Company. Selling prices of products are determined based on pricenegotiations each fiscal year, after considering market prices, overall costs and theCompany’s proposals regarding desired prices.

35

Yodogawa Steel Works, Ltd.
Notes to Consolidated Financial Statements (continued)
21. Investment, Rental and Idle Properties
Effective the year ended March 31, 2010, “Accounting Standard for Disclosures about Fair
Value of Investment and Rental Property” (ASBJ Statement No. 20 issued on November 28,2008) and “Guidance on Accounting Standard for Disclosures about Fair Value ofInvestment and Rental Property” (ASBJ Guidance No. 23 issued on November 28, 2010)
have been applied.
The Company and certain consolidated subsidiaries own office buildings, land, and parking
lots as rental properties and idle properties mainly in Osaka Prefecture, other domestic
areas and Taiwan.
The carrying value in the consolidated balance sheets at March 31, 2009 and 2010 and its
corresponding fair value of rental properties and idle properties are as follows:2009
Rental properties and idle
properties
Properties of which a partare used as rental
properties
Total

Fair value
2010¥ 4,871¥3¥ 4,874¥ 9,082

5,089¥ 9,960(87)¥ (84)

5,002¥ 9,876

14,472¥ 23,554

Thousands of U.S. dollars
Carrying value
Net change
2010

Fair value
2010

2009
Rental properties and idle
properties
Properties of which a partare used as rental
properties
Total

Millions of yen
Carrying value
Net change2010$ 52,354$

32$ 52,386$ 97,614

54,697$ 107,051(935)$ (903)53,762$ 106,148

155,546$ 253,160

36

Yodogawa Steel Works, Ltd.
Notes to Consolidated Financial Statements (continued)
21. Investment, Rental and Idle Properties (continued)
The carrying value represents the acquisition cost less accumulated depreciation andcumulative impairment loss.
The components of net change in carrying value included increases mainly due toacquisitions of land in the amount of ¥91 million ($978 thousand) and translation
adjustments in the amount of ¥43 million ($462 thousand) and decreases mainly due toimpairment loss recognized in the amount of ¥27 million ($290 thousand) and sales in theamount of ¥14 million ($150 thousand) and depreciation of buildings in the amount of ¥173
million ($1,859 thousand).
Fair value of domestic rental properties at March 31, 2010 is principally measured based on
the real-estate appraisal assessed by the external real-estate appraiser. However, unlessthe appraisal or indicators that are regarded to reflect the fair value of the properties
appropriately change significantly since the date of acquisition or the date of the latest
appraisal, the Company and certain domestic consolidated subsidiaries measure the fairvalue of the properties based on such appraisal or indicators.
Fair value of rental properties in Taiwan at March 31, 2010 is measured based on theproperty price announced by the government.
Revenues, costs and expenses relevant to investment, rental and idle properties for the year
ended March 31, 2010 are as follows:
Millions of yen
2010
Rental revenues

Rental costs

Difference

Other expenses¥ 1,144

¥ 626

¥ 518

¥ (25)

Thousands of U.S. dollars
2010
Rental revenues

Rental costs

Difference

Other expenses$ 12,296$ 6,728$ 5,568$ (269)The rental revenues and rental costs for certain properties of which only a part are used asrental properties are not included in the above table because the Company and certain
consolidated subsidiaries use a portion of these properties for the purposes of rendering
services and conducting management activities. The rental revenues are recorded under
net sales or other income and the rental costs are recorded under cost of sales, selling,
general and administrative expenses or other, net, as part of other expenses, in the
consolidated statements of operations.

37

Yodogawa Steel Works, Ltd.
Notes to Consolidated Financial Statements (continued)
22. Segment Information
The Company and its consolidated subsidiaries are primarily engaged in the manufactureand sale of a variety of steel products such as steel sheets, construction materials,
prefabricated structures, home furnishings, and steel rolls and gratings. The Company
also engages in other activities such as real estate rental and engineering projects.
The business and geographical segments of the Company and consolidated subsidiaries forthe years ended March 31, 2009 and 2010 are outlined as follows:Business Segments
Millions of yen
Year ended March 31, 2009

I. Sales and operating income:Sales to third parties
Intersegment sales andtransfers
Net sales
Operating expenses
Operating income
II. Total assets, depreciation
and amortization, loss on
impairment of fixed assets
and capital expenditures:
Total assets
Depreciation andamortization
Loss on impairment of fixed
assetsCapital expenditures

Eliminations andgeneralcorporate
assetsConsolidated

Steel sheet
products

Electric
furnaceproducts

Other

Total

¥ 175,563¥ 12,469¥ 6,569¥ 194,601¥–¥ 194,601

1
175,564
170,977¥ 4,587–
12,46911,849¥ 620

4,378
10,947
10,165¥ 782

4,379
198,980
192,991¥ 5,989(4,379)(4,379)(3,529)¥ (850)–
194,601
189,462¥ 5,139¥ 100,802¥ 9,874¥17,019¥ 127,695¥ 51,175¥ 178,870

5,145

624

359

6,128

107

6,235

135
2,957

–
766

76
148

211
3,871

3
35

214
3,906

38

Yodogawa Steel Works, Ltd.
Notes to Consolidated Financial Statements (continued)
22. Segment Information (continued)
Business Segments (continued)
Millions of yen
Year ended March 31, 2010

I. Sales and operating income:Sales to third parties
Intersegment sales andtransfers
Net sales
Operating expenses
Operating income
II. Total assets, depreciation
and amortization, loss on
impairment of fixed assets
and capital expenditures:
Total assets
Depreciation andamortization
Loss on impairment of fixed
assetsCapital expenditures

Eliminations andgeneralcorporate
assetsConsolidated

Steel sheet
products

Electric
furnaceproducts

Other

Total

¥ 119,314¥ 8,126¥ 4,979¥ 132,419¥–¥ 132,419

0
119,314118,190¥ 1,124

–
8,126
7,693
¥ 433

2,986
7,965
6,946
¥ 1,019

2,986
135,405
132,829¥ 2,576(2,986)(2,986)(2,411)¥ (575)–
132,419
130,418¥ 2,001¥ 97,078¥ 7,897¥17,158¥ 122,133¥ 57,780¥ 179,913

4,938

540

320

5,798

101

5,899

17
5,075

–
340

10
52

27
5,467

0
18

27
5,485

Eliminations andgeneralcorporate
assetsConsolidated$$ 1,423,248

Thousands of U.S. dollars
Year ended March 31, 2010

I. Sales and operating income:Sales to third parties
Intersegment sales andtransfers
Net sales
Operating expenses
Operating income
II. Total assets, depreciation
and amortization, loss on
impairment of fixed assets
and capital expenditures:
Total assets
Depreciation andamortization
Loss on impairment of fixed
assetsCapital expenditures

Steel sheet
products

Electric
furnaceproducts

Other

Total

$1,282,395$ 87,339$ 53,514$1,423,248

0
1,282,395
1,270,314$ 12,081–
87,33982,685$ 4,654

32,09485,60874,656$ 10,952

32,094(32,094)–
1,455,342(32,094) 1,423,248
1,427,655(25,914) 1,401,741$ 27,687 $ (6,180) $ 21,507$1,043,401$ 84,877$ 184,415$1,312,693$ 621,024$1,933,717

53,074

5,804

3,439

62,317

1,086

63,403183
54,547

–
3,654

107
559

290
58,7600
193

290
58,953–39

Yodogawa Steel Works, Ltd.
Notes to Consolidated Financial Statements (continued)
22. Segment Information (continued)
Business Segments (continued)
As described in Note 2(a), effective the year ended March 31, 2010, the Company and its
consolidated subsidiaries have applied “Accounting Standard for Construction Contracts”(ASBJ Statement No.15 issued on December 27, 2007) and “Guidance on AccountingStandard for Construction Contracts” (ASBJ Guidance No.18 issued on December 27,2007). As a result, sales to third parties and operating income in the steel sheet products
segment for the year ended March 31, 2010 increased by ¥99 million ($1,064 thousand),and ¥15 million ($161 thousand), respectively, from the corresponding amounts which
would have been recorded under the method applied in the previous year.
As described in Note 2(c), previously, the cost method based on the average method wasprincipally applied for measuring inventories held for sale in the ordinary course ofbusiness.
Effective the year ended March 31, 2009, “Accounting Standard for
Measurement of Inventories” (ASBJ Statement No.9 issued on July 5, 2006) has been
applied, and now these inventories are principally measured by the lower of cost or net
selling value, cost being determined by the average method. As a result, operating
expenses in the steel sheet products segment and the electric furnace products segment for
the year ended March 31, 2009 increased by ¥4,195 million and ¥97 million, respectively,
and operating income decreased by the same amounts from the corresponding amounts
which would have been recorded under the method applied in the previous year.
As described in Note 2(e), effective the year ended March 31, 2009, “Practical Solution on
Unification of Accounting Policies Applied to Foreign Subsidiaries for Consolidated
Financial Statements” (ASBJ PITF No.18 issued on May 17, 2006) has been applied. As
a result, operating expenses in the steel sheet products segment for the year ended March 31,
2009 increased by ¥7 million and operating income decreased by the same amounts fromthe corresponding amounts which would have been recorded under the method applied in
the previous year.
As described in Note 1(h), the Company and its domestic subsidiaries had reviewed theestimated useful lives of certain machinery and changed them after a revision of the
Corporation Tax Law, which was effective the year ended March 31, 2009. As a result,operating expenses in the steel sheet products segment, the electric furnace products
segment and the other segment for the year ended March 31, 2009 increased by ¥284
million, ¥19 million and ¥1 million, respectively, and operating income decreased by thesame amounts from the corresponding amounts which would have been recorded under the
method applied in the previous year.

40

Yodogawa Steel Works, Ltd.
Notes to Consolidated Financial Statements (continued)
22. Segment Information (continued)
Geographical Segments (continued)

Japan
I. Sales and operating
income:Sales to third parties
Intersegment sales
and transfers
Net sales
Operating expenses
Operating income
II. Total assets¥ 125,501¥ 69,100¥ 194,601

15
125,516
122,164
¥
3,352

512
69,612
66,976¥ 2,636¥ 112,100¥ 25,745

Japan
I. Sales and operating
income:Sales to third parties
Intersegment sales
and transfers
Net sales
Operating expenses
Operating income
II. Total assets¥–¥ 194,601

527
195,128
189,140
¥
5,988

¥

(527)
(527)
322
(849)

–
194,601
189,462¥
5,139¥ 137,845¥ 41,025¥ 178,870

Millions of yen
Year ended March 31, 2010
Eliminations
and general
corporate
assetsAsia
Total
Consolidated¥

93,147¥ 39,272¥ 132,419¥

13
93,16090,7162,444–
39,272
39,140¥132¥ 107,375¥ 25,331

Japan
I. Sales and operating
income:Sales to third parties
Intersegment sales
and transfers
Net sales
Operating expenses
Operating income
II. Total assets

Millions of yen
Year ended March 31, 2009
Eliminations
and general
corporate
assets
Total
Consolidated
Asia

¥

–

¥ 132,419

13
132,432
129,856
¥
2,576

¥

(13)
(13)
562
(575)

–
132,419
130,418¥
2,001¥ 132,706¥ 47,207¥ 179,913

Thousands of U.S. dollars
Year ended March 31, 2010
Eliminations
and general
corporate
assetsAsia
Total
Consolidated$ 1,001,150$ 422,098$ 1,423,248$–$ 1,423,248

140
1,001,290
975,022$ 26,268–
422,098
420,679$ 1,419140
1,423,388
1,395,701$
27,687

(140)
(140)
6,040
$ (6,180)–
1,423,248
1,401,741$
21,507$ 1,154,074$ 272,259$ 1,426,333$ 507,384$ 1,933,717

41

Yodogawa Steel Works, Ltd.
Notes to Consolidated Financial Statements (continued)
22. Segment Information (continued)
Geographical Segments (continued)
The principal country in the Asia segment is Taiwan.
As described in Note 2(a), effective the year ended March 31, 2010, the Company and its
consolidated subsidiaries have applied “Accounting Standard for Construction Contracts”(ASBJ Statement No.15 issued on December 27, 2007) and “Guidance on AccountingStandard for Construction Contracts” (ASBJ Guidance No.18 issued on December 27,2007). As a result, sales to third parties and operating income in the Japan segment for theyear ended March 31, 2010 increased by ¥99 million ($1,064 thousand) and ¥15 million($161 thousand), respectively, from the corresponding amounts which would have beenrecorded under the method applied in the previous year.
As described in Note 2(c), previously, the cost method based on the average method wasprincipally applied for measuring inventories held for sale in the ordinary course ofbusiness.
Effective the year ended March 31, 2009, “Accounting Standard for
Measurement of Inventories” (ASBJ Statement No.9 issued on July 5, 2006) has been
applied, and now these inventories are principally measured by the lower of cost or net
selling value, cost being determined by the average method. As a result, operating
expenses in the Japan segment for the year ended March 31, 2009 increased by ¥4,292
million and operating income decreased by the same amount from the corresponding
amounts which would have been recorded under the method applied in the previous year.
As described in Note 2(e), effective the year ended March 31, 2009, “Practical Solution on
Unification of Accounting Policies Applied to Foreign Subsidiaries for Consolidated
Financial Statements” (ASBJ PITF No.18 issued on May 17, 2006) has been applied. As
a result, operating expenses in the Asia segment for the year ended March 31, 2009
increased by ¥7 million and operating income decreased by the same amount from thecorresponding amounts which would have been recorded under the method applied in theprevious year.
As described in Note 1(h), the Company and its domestic subsidiaries had reviewed theestimated useful lives of certain machinery and changed them after the revision of the
Corporation Tax Law, which was effective the year ended March 31, 2009. As a result,operating expenses in the Japan segment for the year ended March 31, 2009 increased by¥304 million and operating income decreased by the same amount from the corresponding
amounts which would have been recorded under the method applied in the previous year.

42

Yodogawa Steel Works, Ltd.
Notes to Consolidated Financial Statements (continued)
22. Segment Information (continued)
Overseas Sales
Overseas sales, which include export sales of the Company and its domestic consolidated
subsidiaries and sales (other than exports to Japan) of the overseas consolidated subsidiary,
for the years ended March 31, 2009 and 2010 are summarized as follows:

Overseas sales
Consolidated net sales
Overseas sales as a percentage ofconsolidated net sales

Overseas sales
Consolidated net sales
Overseas sales as a percentage ofconsolidated net sales

Overseas sales
Consolidated net sales

Millions of yen
Year ended March 31, 2009
Asia
Other
Total
¥ 52,043¥ 32,852¥ 84,895
194,601
26.7%

16.9%
43.6%
Millions of yen
Year ended March 31, 2010
Asia
Other
Total
¥ 32,886¥ 15,752¥ 48,638
132,419
24.8%

11.9%
36.7%
Thousands of U.S. dollars
Year ended March 31, 2010
Other
Total
Asia
$353,461$169,303$ 522,764
1,423,248

23. Subsequent Event
The following distribution of retained earnings of the Company, which has not beenreflected in the accompanying consolidated financial statements for the year ended March
31, 2010, was approved at a meeting of the Board of Directors held on May 14, 2010:

Cash dividends of ¥5 ($0.05) per share

Millions of yen¥ 834

Thousands of
U.S. dollars$ 8,96443